Did anyone else notice last week that General Motors posted a 1.6 billion dollar loss?
Did you know that they spent 1.4 billion last quarter on health care?
That incredibly high number forced GM to renegotiate with the UAW last week to cut medical benefits to current and past employees – saving the company over one billion dollars a year.
G.M. pays health insurance for 750,000 current and former workers at a cost of about 5.6 billion a year (4 billion dollars of that goes to retirees). That’s up over a billion dollars from a few years ago. GM has been hit with double digit premium increases for several years running. What’s worse, these huge costs are hurting the U.S. division of GM, while other divisions, such as G.M.Canada (that bastion of low wage, exploitative off shoring I guess) are highly profitable and getting more of G.M.’s work.
No wonder GM has renewed its call that the government needs to step in and do something about the health care crisis.
For some reason in this country we view health care costs as the responsibility of corporations. Why? In every other way in this country we bend over backwards to give corporations almost unfettered freedom to compete in the global economy (oh ok we do ask them not to poison the ground and water, but this administration isn’t even tough on that), yet in what is probably the most unfair competitive disadvantage you could think of – a certain segment of our population goes up in arms at the thought of Universal Coverage because it’s “socialism.”
That’s just stupid…
And dangerously short sighted.
Did you know that in 2003, only 69% of companies in America offered health coverage to it’s workers?
In 2005 that number is down to 60%.
Who is covering those people?
Probably no one. Maybe, if they are lucky and we aren’t – they are being covered by Medicaid. Medicaid used to be a safety net for the poorest among us, now it has turned into a way for smaller companies (and even some very large ones) to offload the medical costs onto the state. There is a huge incentive to NOT pay adecent wage so you can keep your eligibility for your employees.
However, it would be the wrong lesson to drawn from this if we simply said “We need to fix those loopholes.” The sad fact is many of those companies can’t afford to pay insurance. When faced with competition from all corners of the globe, every penny counts. And when those pennies flow out faster and faster each year to insurance companies, that’s less money to stay in business – let alone expand, grow, higher more people and help grow the economy. No, the lesson we need to learn is that companies need the burden of health coverage taken off of their back.
I can hear the yelling now. “I don’t want the government running my health system” or “whose going to pay for that???” and my favorite “We have the best system in the world, you’ll destroy that.”
First, the government already runs a huge chunk of the health care system in the form of Medicare and Medicaid. Medicare in particular is a well run organization with incredibly low overhead. No one is asking the government to decide who goes to what doctor, whether you can get treated for certain ailments, etc. Frankly, we already have that system now – the insurance racket.
Tell me which makes more sense to you – Universal Coverage, or a system with a huge amount of overhead built in to deny claims, deny coverage – and oh yeah, make a profit to boot. How do insurance companies make a profit? By spending less than they take in. How do they do that? By keeping sick people from spending their money.
On the question of “Who is going to pay for it?” I see a certain dishonesty in asking it. That makes it sound like we AREN’T paying for it now! We spend about 1.3 trillion a year on health care in this country (about 1 trillion of that is from the private sector), and more per capita than any other country – only to get less bang for our buck than the rest of the developed world. That doesn’t even speak to the fact we don’t insure 40 million folks.
Paying the immense overhead to screen people out of the system contributes heavily to that extra cost. Countless training hours by doctors offices to comply with individual insurance company requirements forces more overhead on the doctors (and more cost on you). Companies having to employee fleets of “benefit coordinators” to manage the coverage and the cost of their health care is another huge waste.
That’s efficient? There are enough layers of bureaucracy associated with insurance in this country to make the Politburo proud.
Finally the notion that we have the best medical system in the world is highly debatable. On nearly any measure of health care, we are not first. Just look at the stats. Wow does that make sense to spend more and get less? That doesn’t sound very smart to me. Pharmaceutical innovation? Arguable the best in the world, but they spend as much money marketing to doctors as they do developing drugs. Maybe instead of bringing lasagna to receptionists at the Doctors office on the way to play a round of golf with the MD crowd, or advertising Viagra to a bunch of horny geriatrics, they could plow that money back into R&D.
Further, it doesn’t really matter HOW good the drugs are if you can’t afford them. So great, there is a wonder drug at $500 a pill that will save my life – if I don’t have the cash, I’m just as dead as I ever was.
We’ve brought all this up before. We’ve also talked about the need to reform the system as a whole, not just coverage. We need to limit liability for all but the most egregious cases of gross negligence by doctors. No offense, but 30 million dollar settlements to an individual jeopradize the safety of everyone in the community. We need to do more to encourage preventative medicine instead of curative. That old “ounce of prevention is worth a pound of cure” saw is eerily accurate. There are lots of things we can work on – but the first step is to recognize that the system is broken. The first step is to realize that we can do better for the money we are spending. The first step is to realize we need Universal Coverage or it won’t just be our physical health that is in danger, but our economic health.
Just ask G.M.