By Robert Fitch
The New York Times
December 28, 2005

AS most Americans are aware, our auto industry is in a crisis.

Workers’ wages are falling, and hundreds of thousands of jobs are being sent offshore. America’s largest parts supplier, Delphi, filed for bankruptcy protection, and General Motors, Delphi’s main customer, may too, if a threatened United Auto Workers strike occurs next month. Meanwhile, Ford and its main parts supplier, Visteon, seem to be skidding down the same road.

How did we get here? There are many causes: poor car designs, high pension costs, increased foreign competition. But much of it comes down to the overwhelming health insurance costs borne by the auto makers. This is why the union’s president, Ron Gettelfinger, has urged Congress to enact sweeping health insurance reforms.

If the government paid everyone’s health insurance bills, as those in Canada and most of Europe do, Detroit’s Big Three could save at least $1,300 per vehicle. Profitability would return. With deeper pockets, the auto makers could afford to pay their suppliers. Communities would be spared layoffs.

Of course, there are a lot of other compelling reasons to support a single-payer plan besides helping the auto industry. Although it is by far the most costly in the world, our health care system still leaves 43 million people uncovered. The latest World Health Organization rankings listed America’s system 33rd, below Costa Rica and only two notches above Cuba.

Most advocates of universal health care focus on the opposition of Republicans and insurance companies. But perhaps the most important factor keeping an overhaul off the national agenda is one that few Democrats acknowledge: most of Mr. Gettelfinger’s fellow labor leaders don’t support a single-payer system either.

The reason comes down to simple self-interest. The United Auto Workers is one of the few private-sector unions that doesn’t run its own health plan. Rather, most have created huge companies to administer their workers’ plans, giving them a large and often corrupt stake in the current system.

Opposition to a national health care plan is as much a part of the American trade union tradition as the picket line. It goes back to Samuel Gompers, the founder of the American Federation of Labor, who railed at early Congressional efforts to pass a law mandating employer coverage as Britain had done, which he said had “taken much of the virility out of the British unions.”

This line of thinking led to the notorious decision in 1991 by the A.F.L.-C.I.O.’s health care committee to reject a proposal that the federation support a single-payer plan. The majority said a national system simply had no chance in Congress, but others saw a conflict of interest: government-supplied health care would put union-run plans out of business.

The deciding vote was cast by Robert Georgine, chief executive of Ullico, a huge insurance provider created by the unions. A decade later, Mr. Georgine, who was paid $3 million a year by Ullico, and several other company directors – all heads of major A.F.L.-C.I.O. unions – were investigated by a federal panel for insider trading involving Ullico stock. Mr. Georgine and several directors resigned, and this year he agreed to pay back $13 million to the company.

Let’s face it: union-administered health insurance funds provide irresistible opportunities for labor leaders. First there’s patronage: hiring friends and relatives. Then there are the conventions, junkets and retreats provided by the plans and the providers. And for those willing to cross the line of legality, there’s the chance to take kickbacks from health care vendors.

Many officials are charged, but few go to prison, even when money allegedly winds up in Mafia hands. Last month federal prosecutors lost a criminal case in Brooklyn in which they charged that the Genovese crime family leaned on two International Longshoremen’s Association local presidents to, among other things, choose a favored health vendor.

Evidently, the jury was convinced by the defense’s argument that the union leaders were under duress. Even Lawrence Ricci, the principal accused Genovese figure, was acquitted, although he disappeared during the trial and never testified. (His body was found last month in the trunk of a car in Union, N.J.)

Despite shrinking membership, organized labor still has enough money and muscle to get behind a campaign for national health insurance. Last month, public-sector unions in California came up with tens of millions of dollars in a successful campaign to defeat a ballot measure that challenged their right to use union dues for political purposes.

The problem is getting American unions to fight for common concerns as opposed to narrow institutional interests. It may just be that a broad-scale union overhaul will have to precede one in American health care.

Robert Fitch is the author of the forthcoming “Solidarity for Sale: How Corruption Destroyed the Labor Movement and Undermined America’s Promise.”

By Tom O’Brien
San Francisco Chronicle
Thursday, December 29, 2005

After a long time away, you see with new eyes.

I moved back to the United States with my Canadian wife and two small boys after living 15 years in Toronto and Ottawa. U.S. health care now looks both expensive and scary, leading me to conclude that we’d do better with an entirely different system.

Nowhere has this been put in sharper relief than in the story of two colleagues. Struck in March with cancer, an American colleague worried about death, insurance loss and bankruptcy. In contrast, a Canadian colleague and cancer victim had only her disease to fight.

Susan was on sick leave when I came to work at my new job in August. She was middle-aged and single with a grown family and well liked in my office. She was undergoing chemotherapy to treat breast cancer and not able to work. Our employer supported her beyond the normal period of sick days and vacation.

But the scary question for anyone but the rich hit with a catastrophic illness in the U.S. health-care system is: How long will an employer’s support go on if the battle goes far beyond the time allotted for sickness and vacation? Susan worried about the loss of health-care coverage and what ensues — second-rate care, bankruptcy, choosing between timely drug therapies and even modest necessities. She died this month before those fears were realized. But had she lived, she and her family would have confronted the excruciating battle survivors have to fight with insurance companies, employers and health-care providers over cost, length and quality of treatment.

In contrast, my former colleague Kathleen back in Canada was gripped by uterine cancer, which had spread to her intestines. While she was locked in a life-and-death battle for 18 months, she didn’t have to worry about losing her health care and choosing which bills to pay. Canadian Medicare covers everyone for everything in hospitals and doctors’ offices, including some elective procedures. This means no health care-caused bankruptcies. No fights with insurers. No insurance-driven financial worries. Kathleen could save her energy for battling her cancer instead. She did recover, and while her recovery was not necessarily the direct result of differences in care systems, there is no question that she would have suffered more with the burden of financial worries related to her health-care needs.

I hear stories here about Canadians lining up for basic medical care. But despite plenty of doctor appointments, occasionally bringing my children to the ER, and having had a heart procedure myself, I didn’t witness any delays for necessary (let alone emergency) care. In survey after survey, Canadians support public, nonprofit health care by a wide margin.

And why not? Compared to the United States, Canada has much lower infant-mortality rates and a longer life expectancy, according to data from the World Health Organization. Canadian women get just as many mammograms, for example, as do American women. This is achieved despite spending far less per person on health care — 10 percent of per capita GDP in Canada goes to health care versus 15-plus percent in the United States, according to WHO research.

After 40 years of private health care in America and 15 years of Canada’s Medicare, I’ll take the latter. But of course, I can’t; it’s not available here. I love my country but not the private health-care system that abandons many people and worries even more.

Few Americans know that every other industrial country in the world has a health-care system more or less like Canada’s. I think even fewer realize that we do, too — it’s called (U.S.) Medicare. The system that boosted the health of Americans 65 and older is similar to Canada’s system for everyone. They’re both “public, not-for-profit, single-payer” systems with low overhead costs. So why not extend Medicare to every American?

Our seniors like it. Sure, it will raise the cost of this government program by billions of dollars, according to even the most conservative estimates. But it will save money for both individuals and employers who now purchase private health insurance. After all, it’s not how much of your income you pay, it’s how much you keep. You’ll keep more under Medicare-for-all, and every child, woman and man would get the timely health care they need.

Give people the opportunity to face and fight their illnesses, not their insurance companies.

By Paul Krugman
The New York Times
December 26, 2005

Health care seems to be heading back to the top of the political agenda, and not a moment too soon. Employer-based health insurance is unraveling, Medicaid is under severe pressure, and vast Medicare costs loom on the horizon. Something must be done.

But to get health reform right, we’ll have to overcome wrongheaded ideas as well as powerful special interests. For decades we’ve been lectured on the evils of big government and the glories of the private sector. Yet health reform is a job for the public sector, which already pays most of the bills directly or indirectly and sooner or later will have to make key decisions about medical treatment.

That’s the conclusion of an important new study from the Brookings Institution, “Can We Say No?” I’ll write more about that study another time, but for now let me give my own take on the issue.

Consider what happens when a new drug or other therapy becomes available. Let’s assume that the new therapy is more effective in some cases than existing therapies – that is, it isn’t just a me-too drug that duplicates what we already have – but that the advantage isn’t overwhelming. On the other hand, it’s a lot more expensive than current treatments. Who decides whether patients receive the new therapy?

We’ve traditionally relied on doctors to make such decisions. But the rise of medical technology means that there are far more ways to spend money on health care than there were in the past. This makes so-called “flat of the curve” medicine, in which doctors call for every procedure that might be of medical benefit, increasingly expensive.

Moreover, the high-technology nature of modern medical spending has given rise to a powerful medical-industrial complex that seeks to influence doctors’ decisions. Let’s hope that extreme cases like the one reported in The Times a few months ago, in which surgeons systematically used the devices of companies that paid them consulting fees, are exceptions. Still, the drug companies in particular spend more marketing their products to doctors than they do developing those products in the first place. They wouldn’t do that if doctors were immune to persuasion.

So if costs are to be controlled, someone has to act as a referee on doctors’ medical decisions. During the 1990’s it seemed, briefly, as if private H.M.O.’s could play that role. But then there was a public backlash. It turns out that even in America, with its faith in the free market, people don’t trust for-profit corporations to make decisions about their health.

Despite the failure of the attempt to control costs with H.M.O.’s, conservatives continue to believe that the magic of the private sector will provide the answer. (There must be a pony in there somewhere.) Their latest big idea is health savings accounts, which are supposed to induce “cost sharing” – that is, individuals will rely less on insurance, pay a larger share of their medical costs out of pocket and make their own decisions about care.

In practice, the health savings accounts created by the 2003 Medicare law will serve primarily as tax shelters for the wealthy. But let’s put justified cynicism about Bush administration policies aside: is giving individuals responsibility for their own health spending really the answer to rising costs? No.

For one thing, insurance will always cover the really big expenses. We’re not going to have a system in which people pay for heart surgery out of their health savings accounts and save money by choosing cheaper procedures. And that’s not an unfair example. The Brookings study puts it this way: “Most health costs are incurred by a small proportion of the population whose expenses greatly exceed plausible limits on out-of-pocket spending.”

Moreover, it’s neither fair nor realistic to expect ordinary citizens to have enough medical expertise to make life-or-death decisions about their own treatment. A well-known experiment with alternative health insurance schemes, carried out by the RAND Corporation, found that when individuals pay a higher share of medical costs out of pocket, they cut back on necessary as well as unnecessary health spending.

So cost-sharing, like H.M.O.’s, is a detour from real health care reform. Eventually, we’ll have to accept the fact that there’s no magic in the private sector, and that health care – including the decision about what treatment is provided – is a public responsibility.