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California nurses at a 2007 rally for single-payer. They were cheering Michael Moore, who appeared at a legislative hearing. (AP photo)

Shifting the health insurance burden

ASK THIS | May 17, 2008

In Canada, GM and Ford executives and other business leaders laud single-payer health insurance; in the U.S. support on the CEO level is hard to find. Why?

By Morton Mintz

At annual meetings of companies staggering under out-of-control health-care costs, reporters may want to ask chief executive officers questions like these:

Publicly-financed universal health coverage would shift the burden of health-care costs to the taxpayers. That would help your bottom line, so why aren't you fighting for it? Are you cozy with drug and health-insurance industry executives who want you to be silent about it? Are there political or ideological reasons (charges of socialized medicine) that lead you to stick with employer-based health care?

Now some background for the questions:

After a five-month strike in Southern California against Safeway and two other supermarket chains was settled in February 2004, I interviewed Greg Denier, assistant to the international president of the United Food and Commercial Workers, and Harry F. Burton, then as now the lead negotiator for Safeway and Giant Food in the Washington, D.C., region. What they said about health care—the central issue in the strike—is worth recalling. It is a major issue not only in that region, where a strike against Safeway and Giant was recently averted, but across the country.

The West Coast strike "would not have occurred if we had a system of universal healthcare coverage," Denier told me. "All of our strikes in the past decade have occurred because of the absence of universal healthcare." Burton—speaking "as an individual"—essentially agreed.

Universal health insurance would have "a profound effect" not just on the supermarket industry but "on nearly all collective bargaining," Burton told me. Nonunion companies "virtually never" provide health care of the same quality as that provided by unionized competitors, thus creating "a vast disparity in costs." That's why a tax-supported national system would result in "a leveling of the playing field."

Denier and Burton—labor and management—shared the belief that, as I wrote, "universal health coverage would have narrowed the wide gap in operating costs between the unionized chains and nonunion competitors, particularly 800-pound gorilla Wal-Mart."  They spoke to me for an article published by The Nation in November 2004.

What explains employers' resistance or indifference to universal health insurance? I asked Burton. "Very frequently it's ideology," he replied." That was also the view of Raymond Werntz, who for nearly 30 years ran health care programs for Whitman Corp., a Chicago-based multinational holding company. In 1999, he became the first president of the Consumer Health Education Council, a program of the nonprofit, nonpartisan Employee Benefit Research Institute in Washington. Business leaders worship marketplace ideology "almost like religion," he told me. "It's emotional."

Single-payer is "one and the same thing" as Medicare for everybody, Werntz said. Does the corporate America that's happy with Medicare understand this? I asked. "It's a dialogue that hasn't happened yet," he replied. "My life for four years was trying to get business people in a room with single-payer people. I couldn't do it." CEOs of large corporations see it as something "that smacks of socialism" and therefore as "heresy."

At the Council, Werntz saw his mission as trying to persuade employers to confront the "huge, huge" issue of the uninsured. But he was stonewalled by their "unwillingness to even think about a solution." In 2003, funding ran out. Werntz became the Council's first and only president.

The Business Roundtable is an association of chief executive officers of leading U.S. companies with $4.5 trillion in annual revenues. "It's definitely fair to say that CEOs are very reluctant to take unpopular positions against their colleagues in the BRT," Walter Maher, former vice president for public policy of DaimlerChrysler, told me. "If a huge majority of them are staunch conservatives who have no interest in health reform, or in using the government to control costs, or to expand coverage, or even to moderate health costs using regulatory tools, it'll be a rare CEO who will want to take on his CEO buddies. That's absolutely true." General Motors has complained bitterly and publicly about high drug costs. Thirteen directors sit on its board. Two came from the pharmaceutical industry—the retired chairman of AstraZenca and a retired vice chairman of Pfizer Inc.

In contrast, highly placed business executives in Canada say single-payer nurtures free enterprise. In 1999, A. Charles Baillie, then chairman and CEO of Toronto Dominion Bank, one of Canada's six largest banks, hailed it as "an economic asset, not a burden."

"In an era of globalization, we need every competitive and comparative advantage we have," Baillie told the Vancouver Board of Trade. "And the fundamentals of our health care system are one of those advantages." He added: "The fact is, the free market...cannot work in the context of universal health care. While health care could be purchased like any other form of insurance...the risk and resource equation will always be such that, in some cases, demand will not be matched by supply. In other words, some people will always be left out."

"Bureaucracy consumes 31 percent of U.S. health spending, versus 17 percent in Canada,"  according to David U. Himmelstein and Steffie Woolhandler,  associate professors at Harvard Medical School and founders of Physicians for a National Health Program. "The difference translates into $350 billion frittered away annually here, where a million healthcare workers, as well as hundreds of thousands in the insurance industry, spend their days on useless paperwork," they wrote in the April 14 issue of The Nation.

Is it a wonder, then, that thanks to single-payer, the Big Three auto manufacturers produce a car in Canada for many hundreds of dollars less than they produce the identical car at home? DaimlerChrysler has supported single-payer. "A lot of people think a single-payer system is better," vice president Thomas Hadrych told The Washington Post in 2004. His counterparts at GM and Ford may agree but are mighty quiet about it. In the United States, that is. In Canada, however, GM and Ford executives love it, openly. In 2002, Michael Grimaldi, GM Canada's president and general manager, hailed it as "a strategic advantage for Canada."

Grimaldi spoke to reporters after he, top Canadian executives of Ford and DaimlerChysler, and the president of the Canadian Auto Workers union signed a "Joint Letter on Publicly Funded Health Care." While providing "essential and affordable healthcare services for all," the letter said, single-payer "significantly reduces total labour costs...compared to the cost of equivalent private insurance services purchased by US-based automakers" and "has been an important ingredient" in the success of Canada's "most important export industry."

For GM's and Ford's CEOs, here's a particularly compelling question for reporters—and shareholders—to raise: If single-payer is great for the auto industry in Canada, why isn't it great for the auto industry in the United States?

Posted by Louis Fuchs
12/26/2008, 12:10 AM

There is absolutely no reason why Single Payer Universal Healthcare - Medicare for All won't work. It is the most efficient way to reduce those run away costs and provide healthcare for every American. The only obstacle is the protection of the profits that the insurance companies and drug companies make with the current broken system. They make billions and are able to dictate their will to Congress. This article makes perfect sense. Universal Healthcare will level the playing field and make the nonexistent "Free Market" much more competitive, it will provide a stable labor force by providing healthcare to everyone, it will provide healthcare to the 47 million Americans who don't have it and it will prevent the needless deaths of the 18,000 people who die every year because they can't be treated for chronic health problems. Universal Single Payer Healthcare is a no brainer. If we can only get Congress to represent the constituents who elected them we can CHANGE the system.

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