This, given the airline bankruptcy cases, certainly seems like good news:
General Motors Corp. and the United Auto Workers have reached an agreement that will help the automaker lower its health care costs, GM’s chairman and CEO said Monday.
The announcement came as the world’s biggest automaker said it lost $1.6 billion in the third quarter and said it was considering selling a stake in its financial arm in a bid to restore its investment grade credit rating.
The tentative agreement on health care is projected to reduce GM’s retiree health-care liabilities by about 25 percent, or $15 billion, and cut GM’s annual employee health-care expense by about $3 billion, CEO and Chairman Rick Wagoner said. Cash savings are estimated to be about $1 billion a year.
“These negotiations were done in a positive, cooperative, problem-solving spirit,” Wagoner told employees at GM headquarters in Detroit. “While it may have taken some time to reach this cooperative solution, I think it was time well-spent.”
Although, if the Union is anything like the UMW in WV, they will vote against it and then wonder why they have no jobs teny reas from now.
Paddy O'Shea
In a nation where the ultimate act of patriotism seems to be slapping a flag sticker of Taiwanese origin on the family Lexus, the concern shown by some over the pauperization of American manufacturing employees is cloying at best.
ScottC
So the workers are asked to sacrifice due to management’s blunders. That’s just perfect.
Jim
“The tentative agreement on health care is projected to reduce GM’s retiree health-care liabilities by about 25 percent, or $15 billion, …”
When I read this in John’s post I thought it was just an attempt to screw the retirees out of what they were promised during their years working for the company. When I clicked through it was written differently. It now reads: “G.M., which is one of the biggest providers of health insurance outside of the federal government, said it would reduce its health care liabilities by about $15 billion, or 25 percent, under the deal with the U.A.W. The company’s annual expense for providing medical care for 750,000 employees, retirees and their family members would decrease by $3 billion before taxes.”
I hope this is current workers trying to be more competitive and not just them screwing the generation that has already retired.
Lines
Retired workers. They are some of the very last in America that are still capable of drawing a pension and a health insurance plan from their previous employer. Its a lost way of doing business.
Of course, the auto-manufacturers were being optimistic when they believed that the majority of their retiree’s would die before turning 68. With advances in health care, even our poor environment can’t kill the elderly off fast enough. Must be time to cut their health insurance so they arn’t going in there for every ache and pain.
Steve
This is an excellent example of a competitive burden we could lift off our job creators by instituting a national health care system.
Mr Furious
Steve’s onto it. the auto industry especially is the best argument for ending the employer-based healthcare model.
Asking assembly-line workers to eat the mistakes of decades of corporate short-sightedness will only work so many times. It’s time to actually solve the problem of companies like GM having to compete with other carmakers who don’t have the healthcare costs, not by screwing the employees, but by solving the healthcare problem nationally.
Especially in what seems to be the current climate of changing jobs repeatedly over a career, having your healthcare always tied to your employer makes no sense.
I know, I know, I’m just a crazy liberal… but think about it, it doesn’t make sense anymore.
Mr Furious
Oh, take a look at the upcoming new models from GM for next year—all fucking big SUVs—and tell me again how the woes of that company are all because of greedy unions.
JonBuck
Steve: All you’d do is shifting the burden from companies to taxpayers. Consider the massive cost of the prescription drug benefit. In order to pay for all health care in this country, you’d have to massively raise taxes.
I don’t think the political environment in the United States would stomach that.
JonBuck
Mr. Furious:
GM has a corporate culture problem. I have a friend who is an assembly line worker, and he says that these problems go back 50 years. Just look at the design of GM vehicles. Bland, bland, bland. They think everybody wants the same vehicle. Ford is much better off in this department (just look at the Fusion).
Regarding national health care… remember, all you’re doing is shifting the cost burden from companies to the taxpayer. My money, your money. You worry about line workers having to pay for the mistakes of GM management. Do you want to pay for those mistakes out of your own pocket?
Lines
Shorter JonBuck:
“I have mine, screw you”
The health of our country is based largely on the health of ALL of its citizens. Highest percentage of non-insured children since health insurance became the norm, but thats ok, Jon wants more money.
Shygetz
JonBuck–the difference is that our exports would be able to evenly compete with other nations, where the health-care is nationalized. The higher taxes should be recouped partially from lower prices for domestic goods and/or higher wages. Jeez, it’s supply-side economics, you guys should eat this shit up.
JonBuck
Wow. That’s the first time I’ve been accused of that kind of selfishness. But I’ll choose to ignore the ad hominem anyway.
I’ll put it like this. I want more money so I can afford a private health care plan that would take better care of my family than a government plan would. Because it’s my responsibility, not yours, to take care of my children. I would not ask you or anybody else to pay for it.
If you want to argue for health care assistance for the poor, I can accept that. But that’s a rather different animal than a national health care plan for everybody.
Ancient Purple
I guess I would feel better about this deal if I heard GM management say, “In an effort to help ease the burden, GM management will be passing on any bonuses this year.”
Mr Furious
JonBuck, you will always have the option to supplement with whatever luxurious plan you desire for your family.
We’re all paying for it anyway. Let’s say you work for GM, I am paying an extra two grand for your healthcare when I buy my car. Obviously, you don’t work for GM, but wherever you do work, your employer is paying for your healthcare and passing the cost onto the consumer.
Um, no. GM will pay for those mistakes (ie: deciding SAAB needs an SUV) themselves. Much of the corporate mismanagment has nothing to do with healthcare. I am not asking for GM to become a wholly-owned government corporation. With healthcare off the books, however, GM (and others) might actually be able to weather the rigors of the marketplace a bit better.
srv
Universal Health Care/Payer will be passed by 2014, regardless of which political party is in power. Any party that doesn’t support it by then will not have the boomer vote. End of story.
Mr Furious
Retired GM workers and their pensions didn’t make GM buy Fiat and then sell it at a $2 billion loss four years later.
Yet somehow the assclowns that made that decision probably walked away with a nice bonus at the end of the year.
Steve
Consider the massive cost of the prescription drug benefit. In order to pay for all health care in this country, you’d have to massively raise taxes.
Remind me how much we have raised taxes in order to pay for the prescription drug benefit?
Of course everything in life must be paid for. I just don’t see any reason why we should make General Motors disproportionately pay for it.
A portion of my paycheck already goes for health insurance. If that portion went to fund a national health care system, I don’t see how it would make a lot of difference to me – except that if I lost this job, I’d still be able to get health care. Some people might come out a little ahead from a new system, some people might come out a little behind, but it would be more fair and wouldn’t disproportionately penalize companies like General Motors who keep our entire economy afloat.
John S.
Jon Buck-
Meet David Rossie. You guys will get along swell with your dream of a libertarian healthcare system that works.
Do you also think – as David does – that not everyone should have healthcare? That seems to be what you are intimating wen you say:
And if you are a member of the FYIGM club (Fuck You I Got Mine) that is so popular in America these days and someone correctly identifies you as thus, don’t consider it an ad-hominem attack. If the shoe fits, wear it.
Shygetz
Regarding ad hominem:
You keep using that word. I do not think it means what you think it means.
An ad hominem fallacy means that you are stating that, since your opponent is an asshole, his argument must be incorrect. On the other hand, just saying that your opponent is an asshole, without ascribing any implications of that to his argument, is not ad hominem. It’s just calling a guy an asshole.
space
John Buck:
The massive cost of the prescription drug plan is due to the fact that the Republicans made it illegal for the government to bargain for lower drug prices. You can argue against any government program if you systematically remove the benefits that are provided by the government being involved.
Under the current private sector-based system, high-risk patients either remain uninsured or pay stratospheric premiums. One of the primary benefits of a single-payer program would be that those with chronic ailments would not get dropped. Of course you could MAKE a federal single-payer system lousy by permitting the government to drop high risk individuals. I never used to think that the GOP actually dreamed up ways to make programs suck. Until recently.
As for the personal responsibility nonsense, get real. You think your family is healthy because you take personal responsibility? Please. Get fucking real.
Babies aren’t born with developmental disorders because their parents are bad. Children don’t develop Lukemia because they are lazy. Grandparents aren’t afflicted with Alzheimers because they lead immoral lives. For the most part, health is a gift, not a reward for a life well lived.
Sure, there are life choices that affect health, such as smoking or eating at McDonalds. But you don’t deprive a person of a proper cancer treatment because you disapprove of your neighbor eating at Wendy’s.
All the evidence shows that national health care programs provide equivilent treatment for less. The only reason for choosing the private health care route is to feel superior to those who cant afford it or have not had the misfortune of being afflicted with a “pre-existing condition.”
JonBuck
Why can’t I choose the overall health care plan for myself? Would I be able to afford that supplementary plan after thousands of dollars are taken out of my paycheck in order to pay for the national plan?
But those consumers are people who choose to buy goods and services from the company. It’s hardly “everybody”. If you know a certain company provides good health care for its workers, you can support them by buying their products.
According to my friend at GM, much of their problems go back decades. GM used to employ 1% of the workers in the United States in the 1960s.
What I’m really trying to get at here is this: Personal responsibility. It’s not my place to demand that the rest of the nation pay for the healthcare of me and my family. It’s not your burden, it’s mine.
Krista
And what should happen if (God forbid) someone in your family should be afflicted with a chronic condition? I used to work for a private insurance company, and I can tell you that they’re all about making money…if you cease being an asset for them, they’ll find a way to drop you. Either they put a cap on the amount you can claim, or they”ll drop certain drugs from their paid formulary, or whatever. The fact is, there are an awful lot of regular, middle-class people in the U.S. right now…people with good jobs and nice homes, who have been forced into bankruptcy because someone in their family got sick, and their private health plan dumped them. I hope that this never happens to you, but personal responsibility is only one part of the picture — luck also has a lot to do with it, and if your luck runs out, all the personal responsibility in the world won’t save you. That’s why there should be national health care — to keep people from losing their homes and their live savings when they get sick. It’s a burden that we should ALL share, because it could happen to any one of us, at any time, with no warning.
Lines
“Personal responsibility” – Republican/Libertarian codeword for FYIGM
JonBuck
space said:
Bad things happen. That’s the way it is. It’s my responsibility to plan for things like auto accidents, or a diagnosis of cancer. I’m just saying that it’s wrong for me to ask a total stranger to pay for these problems that I should plan for.
John S. said:
So instead of using reasoned, cogent discussion to help me see your point of view, you call me names.
Krista
And I’m just saying that it’s right for us, as total strangers, to help each other out when even good planning turns out to not be enough.
Steve
The entire concept of insurance is that a bunch of total strangers are going to end up paying for your problems. It’s odd for an insured person to be delivering lectures about “personal responsibility.”
JonBuck
Krista said:
Now this is an argument I respect, actually bringing up problems with the current health insurance regime. This brings up the question: What is the cause of these huge increases in healthcare costs? Is there something in the way the insurance companies are doing business that contributes to it? Since you worked in the industry, perhaps you have some insight?
Would said plan mitigate these double-digit cost increases somehow? Even present state health insurance plans are having major budgetary problems dealing with this.
KC
I’m not trying to be a radical here, but I always see stuff in the papers about what workers have to give up. What I’m wondering, and what it seems a lot of people are not interested in, is how much the CEOs and COOs are making and whether it is proportionate to the amount of work they do? What I’m talking about is personal responsibility here. Lets tally up what they do, see how many “extra” benefits they are extracting from a given company, and evaluate the impact of these benefits on the company’s finances. If the workload is not in porportion to benefits extracted, lets cut them. We need to make sure that CEOs and COOs are living up to their responsibilities.
Rome Again
What I want to know is why so many companies are offering health plans in which the costs are triple/quadruple what I used to pay 10 years ago, and yet I currently work for a company that uses AETNA heath insurance, and I’m paying what I used to pay 20 years ago (yes, that’s correct, I’m paying less than $100 a month for healthcare now, including medical, dental, vision, and AD&D for both my spouse and myself). It seems to me that the huge costs are only going to pay for the increases of pay for the CEOS and the COOs and somehow (how, I’m not sure) the company I work for found a way to mitigate that.
BillS
Just wondering… what does “teny reas” mean?
Isn’t it Cole’s “personal Republican responsibility” to at least use spell check?
Ah, well, just proves that the country is going to hell in a hand basket with socialism. Ayn Rand understood…
Rome Again
ten years, BillS
You were able to translate that without help, weren’t you?
Krista
The reasons are too numerous to count, but I can think of four, off the top of my head. These are theories only:
1. Pharmaceutical companies are gouging.
2. Medical science has grown so innovative, that people can now live for years longer, but they need expensive equipment to do so. 30 years ago, a lot of people would just die, because the treatments didn’t exist. Today, they do exist, but they’re expensive as hell.
3. Insurance companies are no different than many other large corporations…the officers make a bundle, and the consumers get taken to the cleaners.
4. The advent of health sites on the internet have created multitudes of hypochondriacs who visit their doctor for everything from a blood blister on their finger to a runny nose. The fact that there aren’t enough doctors exacerbates this problem, because these people wind up in the ER, which then drives up costs even more.
In Canada, our health care system certainly isn’t perfect — it gets abused a lot, and there tend to be long waiting lists for specialists and treatments. Right now, everybody here has provincial health care, and can then submit any unpaid portions of claims to their private insurer. There’s a debate going on right now about the privatization of services. A company in N.S. opened up a private MRI clinic. Some people are howling because they feel that it allows people with money to “jump the line” and get treated first. Others feel that if they do go to a private MRI clinic, that shortens the wait for the public clinic for everybody else, and everyone benefits. There is no perfect solution, really, but when it comes to our health and our finances, we can’t fool ourselves and think that one parachute is enough.
docG
So why would you be willing to let your employer pay for your health problems via health insurance? I would think you owe your employer at least the same consideration as a stranger. Pooling risk is the purpose of insurance of any type, be it private or publically funded, health, personal property, liability, etc. If you use insurance of any kind in your personal responsibility planning, you ARE depending on others to help pay for bad things that happen to you. If you do not use insurance, you are very wealthy, very foolish, or both.
Mr Furious
Perfect, Steve. Maybe JonBuck should really be “personally responsible” and just put money in a mattress (or HSA) for his family’s medical costs. It’s not fair to even ask Blue Cross to pay for his “burden” now is it?
You just perfectly exposed his “bootstrap personal responsibility” for the hypocritical FYIGM that it is.
Quit pooling your risk if you’re so fucking tough.
Kimmitt
Yeah, but there are both theoretical and empirical reasons to believe that it’d cost less if the government did it — that is, there is good economic theory which predicts this fact, and that’s how it turns out in those countries which have implemented it.
So yeah, it’s a shift of burdens, but in doing so, we make the burden lighter overall. So I’m cool with it.
jcricket
John Buck – All the evidence, from 30+ years of study, shows that health-care is a better deal for consumers. That’s right, when the governments pay for healthcare, company profits go up and individuals pay less for healthcare (as a percent of their income) and get more service. This is a result of a combination of things, including lower overhead (i.e. Medicaire’s administrative overhead is around 3%, while the insurance industry is greater than 10%), the power of buying in bulk and good government regulation.
Government negotiate lower prices for services, cover everyone and eliminate lots of “nasty” facts of life with the current private insurance system (“pre-existing condition” rules, waiting periods when switching jobs, increasingly large deductibles, denial of claims as a matter of course, etc). Oh, and if there’s only one provider, you don’t have to worry about which doctor you go see. Look to Japan, Germany, the UK and Canada for examples.
Our current system that guarantees that on one end taxpayers pay through the nose for “emergency care” to take care of the uninsured, and that private employers will never be able to negotiate price breaks with the local insurance companies. It’s a safe bet that if you pay $100 for your insurance through your employer, they pay $500. Yes, that’s right, your company could pass on $6000 a year on to you or increase their profits or whatever. Instead, it’s being spent subsidizing your healthcare. And, as I pointed out above, if your taxes had to increase, it wouldn’t be by $6,000.
So, basically, you’re paying too much for healthcare already. The US spends nearly double the amount as a percent of GDP on healthcare, all while having 42 million uninsured people, and the cost of private healthcare is rising far faster than wages or corporate profits can cover.
Yes, none of the government run healthcare systems are perfect, but neither is ours. We already have long waiting lines, lots of uninsured, an overly expensive and complicated billing system, increasing costs, etc.
I think for the 42 million+ uninsured people (note: not all are poor), our system is 100% worse than a government run comprehensive system. For probably another 200 million, a government run system would be cheaper, easier to navigate, allow more freedom of choice than their current health plans. There’s probably less than 10 million people in this country (and that’s guessing high) that have better healthcare than what’s provided in government run systems. Oh, and they probably pay more for it too, which as others have pointed out, is always an option.
jcricket
First sentence should read “government run health care is a better deal…” – sorry
Andrew J. Lazarus
JonBuck: No offense, but do you have children?
My second son, BTW, needed over $20,000 (one week inpatient surgery) in treatment to fix a congenital defect. After an experience like that, I don’t think you’d sing that young and single or at least childless (lucky guess by me, right?) tune for long.
JonBuck
There’s a difference between paying a private insurance company by choice and using government power to take that choice out of my hands.
Kimmitt:
You’re going to have to back up this statement with data. You propose to nationalize an entire industry. To turn over all your healthcare choices to government. That gives them an awful lot of power.
Proponents of national heath care will need to show 1) That this power will not be abused (could end up a cash cow), 2) That such a system will cost less per capita than the current system without negative impact on the quality of care, 3) That it will not unduly increase the tax burden after the costs are removed from businesses.
Then there’s the matter of the goverment meeting its healthcare obligations in the midst of an economic downturn.
Address these issues and maybe I’ll listen to you.
Bernard Yomtov
Despite all the problems, GM continues to pay out over $1 billion in dividends each year. These are, of course, non-deductible outlays. So the way to save money is to cut back on promised benefits to workers and retirees, but not touch the dividend, which is after all a purely discretionary payment.
I’ll applaud this when the shareholders take a reduction in dividends to help save the company.
John S.
Jon Buck-
You seem to have very serious reading comprehension issues. You want to play some sort of a misunderstood martyr:
What part of the word “if” do you not understand? I said if you were a member of the FYIGM club. Hell, I even italicized it for emphasis. But you know what’s even worse that calling someone names (which I certainly have not)?
Using reasoned and cogent discussion to be deliberately obtuse.
Kimmitt
Okey-dokey, but first I need to know what “negative impact on the quality of care” means; is it all right to use infant mortality data, various measures of morbidity, waiting list times, and/or life expectancy, or is there something else I need to be looking at for you?
(1) is silly — anything “can be abused;” the question is whether or not it will be more abused (or abusive) than our current system. Certainly, while there is some Medicare/Medicaid and Social Security fraud, both programs are known to run reasonably efficently.
With (3), the answer is simple: Through Medicare and Medicaid, the US currently already pays more per capita in public expenditures on health than most industrialized countries. That is, most countries get a full socialized system for what we’re currently paying to get coverage for only the elderly and poor.
Vermont has a precursor of this system for its kids, called Dr. Dynasaur (Gov. Dean’s initiative). If a rural state can swing the kids aspect, I’m pretty sure the Federal Government can manage the financial burden of the full aspect.
jobiuspublius
Race to the Bottom
timekeeper
Here is another example of the UAW screwing over companies, and then yelping when it comes time to renogotiate contracts.
Jobs bank program–12,000 paid not to work (from the Detroit News, October 17, 2005.)
Delphi (which is in chapter 11) is putting $100 per quarter into this program, which has no accountanbility. GM is paying even more for the 5,000 workers, some of whom earn more than $31/hour to do crosswords and watch TV. Yes, that is $31/hour, or over $60,000/year, which is far above the median income in this country, and certainly more than I make.
Perhaps the unions should look out for its retirees, rather than demanding outrageous concessions like this from the US auto industry. No wonder Delphi went bankrupt, and why Ford and GM are teetering on the edge.
timekeeper
Sorry, should read that Delphi is putting $100 MILLION per quarter into the program, not $100.
JonBuck
jcricket:
Thank you for that information. I’ll have to dig around some journal databases for those studies you mention.
John S.
I apologize for misunderstanding you. Lines did accused me of that very thing earlier, so I was oversensitive.
Kimmitt:
The difference with 1) is that there is a big difference between abuse by a private company, where you can change insurance providers, and abuse by government, where you cannot.
Since I’m at work, I’ll have to withdraw from the discussion for now.
Toren
Maybe this is part of the problem:
http://www.detnews.com/2005/autosinsider/0510/17/A01-351179.htm
“Ken Pool is making good money. On weekdays, he shows up at 7 a.m. at Ford Motor Co.’s Michigan Truck Plant in Wayne, signs in, and then starts working — on a crossword puzzle. Pool hates the monotony, but the pay is good: more than $31 an hour, plus benefits.
“We just go in and play crossword puzzles, watch videos that someone brings in or read the newspaper,” he says. “Otherwise, I’ve just sat.”
Pool is one of more than 12,000 American autoworkers who, instead of installing windshields or bending sheet metal, spend their days counting the hours in a jobs bank set up by Detroit automakers and Delphi Corp. as part of an extraordinary job security agreement with the United Auto Workers union.
The jobs bank programs were the price the industry paid in the 1980s to win UAW support for controversial efforts to boost productivity through increased automation and more flexible manufacturing.”
But no, according to the liberal geniuses above, it’s all the fault of the evil management. News flash for you guys–companies don’t exist in order to provide jobs. They exists to provide a product to consumers and to make money doing so.
Kimmitt
Since I get my insurance through my employer, I cannot change insurance providers, and I am fairly certain that the vast majority of those posting here are in the same boat. This isn’t a good comparison.
So you’re saying that the contract was signed under duress of some sort? Let’s be clear here — the UAW is demanding that Delphi live up to its contractual obligations, while Delphi is attempting to get out of them. Apparently, enforcement of contracts is only a good thing when it does not benefit working people.
timekeeper
Oh, and Bernard, you point out that GM pays a generous dividend (which is true–the rate is the highest among the S&P 500), but it’s still only 1/6 of GM’s current annual health costs. Besides, stockholders have taken a bath recently, as the stock is trading at about $30, well off its 52 week high of $40 and a far cry from the $65+ it was trading for in mid-2003.
Several here have taken shots at GM’s management and their bonuses, but forget to note that salaried workers (as opposed to the unionized factory workers) do not have the extensive benefits packages that the unions have extorted from the companies. Don’t compare apples to oranges.
Andrew J. Lazarus
Kimmitt nails it hard. Employers want to increase productivity, that makes sense. But you can hardly expect workers to cheer on automation or other changes that cost them their jobs. And if they have the clout to get buy-out arrangements, so much the better. How f—ing much money have CEOs of bankrupt, near bankrupt, or merely mismanaged corporations been paid in “golden parachutes” to just leave and go away?
Now, I’m guessing that JonBuck, timekeeper, and Toren have between them no kids and few if any career changes, because even conservatives who’ve had unemployment or medical disaster tend to have their heads out of their asses on this issue.
Everybody else will be unsurprised to learn that potential loss of health insurance is a major stumbling-block to mobility of labor in the USA economy. It’s tough to be an entrepreneur when you know disease could wipe out your entire life savings. It distorts the economy. Indeed, it isn’t fair to GM, even with their boneheaded new Saaburu vehicles, to have to pay outrageous and increasing sums for health care of retirees. That isn’t really the fault of the company management, nor the union, but the lack of political will to control health care costs (and that means single-payer, like the rest of the civilized world).
Ancient Purple
Right.
Because GM Management is certainly struggling with a bare-bones HMO from Kaiser Permanente for their health care coverage.
Right.
Mr Furious
Um, management agreed to those contracts. I never said evil, I implied stupid many times (SUVs, Fiat, etc) and bad labor agreements fall into the same category. Any company that puts itself in the position of paying thousands of workers $60K to sit on their ass (if true) is fucking braindead—how’s that?
Whatever calculations and projections led to those decisions were made by GM and no one else. Underfunding pension plans and failure to budget for future expenses properly are ALL FUCKING MANAGEMENT! Is it the union’s job to say “Are you sure you can afford this?” Yeah, in a perfect world, they’d work together to ensure the company’s solvency, but this ain’t a perfect world. This is a world where executives get golden parachutes, multi-billion dollar companies go bankrupt and screw sharehoolders, employees and pension-holders alike. I don’t blame the worker’s for taking what the company was once offering.
I will stipulate that the Unions should be willing to reopen contracts and make concessions. It’s the only way.
My beef isn’t GM vs UAW, my point is that the current healthcare system is not sustainable, and GM vs UAW is a prime example why.
jcricket
John Buck – Here’s a peer-reviewed article Comparing Health Systems in Four Countries
Some fun facts I learned in a short amount of time searching Google on this issue:
The US spends $1.6 trillion is spent on health care annually, over 13% of our Gross Domestic Product, and over $4,090 per person on health care.
The next biggest spender, Switzerland, spends $2,547 per capita, and Canada spends only half of what we do. Yet 100% of the people in each of these countries is covered, while we have 42 million (nearly 25%) uninsured, and rising.
While the US spends approximately 24% of our health care dollar on administration, Canada spends only 11%. Our own Medicare (a single payer system) reports an administrative overhead of less than 3%, while private insurance company overhead exceeds 14%. So much for “government waste”, eh?
Countries that have universal government-run health care report significantly higher levels of user satisfaction. Despite the “free market” nature of our health care, people aren’t happy with the choices they are getting. Oh, and we have lots of waiting lines now, often longer than oft-reviled Canada.
It might surprise you, but the US is not tops in health care performance. Other industrialized nations lead us in life expectancy and infant mortality rates.
Basically, studies consistently show that well-run government-run health care (like systems in Germany, Canada, Japan and the UK) has significant financial, performance and structural advantages in almost every way over patch-work systems like the one employed in the US.
To put it in the vernacular: Our system blows, and we could insure everyone with better, more comprehensive coverage for less than we pay now, if we’d stop fear-mongering about “socialism” and “government control”.
Sure, there’s plenty of FUD and mis-information from pundits and industry sources that say otherwise, but that’s not proof, right?
And yes, there are problems with government run health care. Some countries (e.g. eastern europe) have government-run health care that sucks worse than our health care. Even places like Canada and Britian are confronting issues with rising health costs, waiting lines, etc. But their issues are minor, compared to ours.
timekeeper
Yes, I am. It’s called a strike. That’s duress. Oh, it’s legal, but the principle is the same.
Okay, then, let’s liquidate Delphi, in which case everyone loses their benefits (and their jobs), not just the people getting paid to sit on their ass and draw an enormous paycheck. That is one of the alternatives. Of course, what happens then is GM takes on an even BIGGER liability, which forces them closer to the edge.
Just in case it has escaped you, “workers” includes executives too, as “workers” means the same thing as “employees”. The left gets wrapped up in the rapture of the plight of the “worker” getting crushed underfoot by big business, while forgetting that big business provides all of the jobs for its employees. Automobile manufacturing is one of those large-scale projects that requires a big company to manufacture the product; small automakers have not been able to successfully compete (locally, or globally) since the 1960’s, when the last of the independent companies folded or merged with each other. Japan has five independent auto companies 15 years ago, now it has two. Britain has zero (down from five a decade ago); Sweden went from two to zero as well.
jcricket
Some of the statistics I quoted are from the American Medical Student Association which has some Excellent resources and further suggested reading
Several others have made great points about the economy-distorting effects of our current health care system. The fear of losing health coverage to become an entrepenuer (i.e. part of the “ownership society”) is all too real. The refusal by some people to take jobs with a different employer because the new one has health benefits that would result in spouses or dependents going uncovered, or simply an increase in annual costs of $5-10k is all too real.
The main take-away is that governments can and regularly do provide universal coverage with high levels of reported satisfcation without restricting consumer choice. Pragmatically speaking, government run health care is better for the economy in the long run. There’s no way around it, unless we combine heavy government regulation (cost controls, eliminate pre-existing coverage issues, etc.) and insurance companies stop being for-profit businesses.
Kimmitt
This is beyond strange — you are redefining “duress” as “declining to sign a contract.” A strike is not duress, any more than a discussion of plant closings is duress. Both of those things are what happens when the contract is not signed.
Kenneth Lay, working-class hero! Please.
Krista
jcricket – nicely researched. That made me feel downright patriotic! :)
Bernard Yomtov
Whatever percentage it is of the healthcare cost, it’s still $1 billion. as for the shareholders, maybe if they hired some decent managers the company would do better. The fact is that GM has been seriously mismanaged. I saw a quote from one of their top guys not long ago saying that he didn’t think rising gas prices would affect consumer auto buying decisions. With geniuses like that in charge it’s no wonder they’re falling apart.
demimondian
So if I have a widget, and I say, “I’m going to charge $5 for that widget”, you’re justified in saying “No, you’ll take $4 for that widget?”
That’s what a strike is all about. I’m not going to offer you my labor unless you meet my requirements. Maybe we have to negotiate the difference between my requirements and your ability to pay, but, if you want the product I have to sell, you’ll pay for it.
Of course, in that view, globalization is simply going abroad to find a cheaper supplier who maintains his factory less well, and runs it on a lower cost personnel fuel. I lost friends in the labor movement when I point that part out, though…
John S.
And on that note, the good folks over at Jib Jab have a new routine that speaks volumes on that very subject (click on the Big Box Mart window).
It’s definitely worth a look.
JonBuck
jcricket:
I noticed that the first article you cited was in an issue completely devoted to universal healthcare. I’ll have to look through it before I can respond.
What I can say is this. I doubt universal health care will ever be a reality in this country because of our history and culture. You would need nothing less than a Constitutional amendment. Because it’s such a divisive subject, only when a supermajority approves should it be a reality.
Kimmitt
Yeah, like an end to segregation was.
John S.
Yes, some people believe that everyone should have healthcare in the richest country in the world, while others just say FYIGM.
Just like as Kimmitt pointed out, some people preferred to think of blacks as second class citizens while others believed that they were no different than any other American.
Just because an issue is divisive doesn’t mean that it should be neglected until everyone can agree.
timekeeper
You are describing how things work in a free market, where a) if the supply (workers) exceeds demand (workers needed) the price will go down, and b) companies are free to change suppliers to reduce costs or improve reliability . Unions (the UAW in particular) are unwilling to adapt to free-market principles, and the featherbedding and excess capacity is legendary. (The Florida East Coast Railway, which safely operates trains with 86% smaller crews than other railroads, is a prime example. Prior to a strike in 1963—one that dragged on for 11 years—union rules required three five man crews for the trip from Jacksonville to Miami, a 365 mile trip. The FEC—which is now the only non-union Class 1 rail freight company—does that same trip with one two-man crew, and is cited for its outstanding safety practices.) There is no pressure to reduce payrolls until a company goes into bankruptcy (United, USAirways, Delta, Northwest, anyone?) and while the bloated salaries of top execs are offensive, they don’t affect the bottom line nearly as much as the tens of thousands of employees do. The unions love to pigeonhole people into minuscule categories and prevent them from doing any work that is outside their task assignment (When Honda opened its plant in Ohio in 1982, there were two jobs on the line; comparable American factories had over 100 different job classifications). This lact of flexibility and agility, more than bloated executive salaries or overly generous dividends, has crippled the American automobile industry.
JonBuck
I’ve read the article that jcricket linked to above: “Comparing Health Systems in Four Countries”. There are far too many issues to respond to here, and I’m getting worn out on this topic anyway. I will limit my response to two issues, then leave it to those who respond.
1) Why is universal health coverage considered a basic human right? This is at the core of the whole argument.
2) How would a single-payer system impact medical and pharmacutical research? The authors note that there are less specialists, and generally less technology used, in other countries. Without the profit motive to drive medical innovation, what happens? Even the authors admit that “the US medical profession is more lucrative and entrepeneurial than is the case elsewhere.”
The United States was founded on the ideals of self-reliance and individual liberty. I don’t see how to reconcile this with universal healthcare.
Kimmitt
This is weird to me. Universal health coverage is considered good sense. The government provides many things which are not basic human rights, such as roads and parks, because it turns out that the state is the best vehicle to provide many of these things.
This is the only truly unresolved question, in my opinion. Basically, the thought is that it will reward original research more strongly while disincentivizing innovative tweaking. There is no question, however, that this is a possible tradeoff. Everything else has been experimented with extensively in other countries, but there is a sense that most other folks are free riding on the US’s investment in pharmaceutical research. It’s an issue which would have to be dealt with.
“We the People of the United States, in order to in order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do hereby ordain and establish this Constitution for the United States of America.” (emphases mine)
Individual liberty, sure. Social Darwinism in the guise of self-reliance . . . not so much.
ray
Why should the government provide universal health insurance or health-care, but not provide universal food? After all, food is a heck of a lot more important than seeing a doctor.
JonBuck
But the state should not have a monopoly. Competition drives innovation and keeps costs down. As Krista noted earlier, there’s currently controversy in Canada over health institutions starting private services available to people who can pay out of pocket. Does this imply contempt for wealthy people?
I am not advocating Social Darwinism. What I do advocate is less government interference in everyday life. I believe this would enable more social mobility, allowing people to succeed, and rise to wealth, if they have the ability. But with the liberty to succeed, also comes the liberty to fail. It all depends on the risks you are willing to bear.
JonBuck
Ray has a good point. Where does it stop? If the government provides health care for free for everybody, why not food, water, shelter, a job? Look at France and the problems it’s having.
Kimmitt
Right, then.
JonBuck
Kimmitt:
Without that social mobility, what you have is a stratified class system where the wealthy stay wealthy, and the poor stay poor. Please explain to me how that is Social Darwinism, as you imply. You also edited out a critical part of my statement.
Steve S
I work for GMAC. We’ve been getting a GM employee discount long before you all heard of it. Yet most everybody I know at the company owns something other than a GM product…
If GM can’t figure out what their problem is, they need to ask their employees.
Steve S
I believe those markets are different, and it’s rather unintelligent to try to make a equivalence. Food, water and shelter have been around long enough, and are of such known quantities that they can operate in a free market.
I think one problem we have right now, is that the industry has gotten so big and out of control it no longer is self-regulating. The invisible hand cannot push the market correctly. I look at this Nobel prize awarded to the doctor from Australia who cured ulcers and have read his story. It took him years to overcome the stubborness of the industry who risked losing billions of dollars in revenue for ongoing care. Doctors, clinics, drug companies… all of them had no incentive to actually cure ulcers. Not even insurance companies had an incentive.
It would be in the consumers best interest to do so, but they have no control over their healthcare decisions.
Kimmitt
We’re getting sidetracked, but nobody’s against social mobility here. I would argue that a broad-based societal commitment to the health of all of its members would enhance, not reduce, social mobility, since it would allow true merit, rather than merit obscured by treatable illness, to shine through.
I agree very strongly with this; now that it has become clear that treating illnesses is more profitable than curing them, we’ve created some really perverse incentives. That’s one of the things that I think a socialized medical system might assist with.
maybee
I would be interested to hear from someone here that is with the UAW, employed by GM.
It is my understanding, from relatives that are in the UAW, that their benefits are excellent. College tution. No medical deductibles. Pensions. Job Protection. Overtime and double overtime and triple overtime pay. It is also my understanding that in many cases, the benefits to UAW workers are better than those benefits offered to some management (not executive) workers.
I have had relatives that were paid while they did not work because their job ‘level’ was protected.
I don’t begrudge anybody their good benefits. But…I don’t know that the workers are being asked to sacrifice so much as come back in line with good business practices.
I think the UAW is wise to renegotiate with GM.
Krista
I’d still rather have my system than yours. :) As far as the controversy goes, I think it comes down to a lot of people resenting the idea that those who have money can get better or faster care. It probably seems like a wacky socialist concept, but most people here believe that the quality of your health care should not be determined by the state of your pocketbook. Our system is not perfect, and needs some refinement, but on the whole, I greatly prefer our system to yours. I’m speaking as someone who currently does not have dependents, nor do I have any health conditions — so I’m paying more in taxes than I’m getting back in healthcare, at the moment. But, that could change at any moment, and at least I know that I’ll be covered if it does.
Jcricket
Generically speaking, yes. But how has this happened in our current health care system? HMOs and PPOs generally have area-wide monopolies, and because they answer to no one but the small “shareholder” class, they absolutely are not driving prices down nor funding innovation. They, as others have pointed out, often resist it. I happen to work in healthcare research, so I actually know what I’m talking about here. The doctors and researchers are constantly on the look out for new ideas, even if it’s just to keep the grant money flowing. But they only get money to take new research to the public if the insurance companies see a profit in it (or they force the issue). Oh, and most of the “innovation” you speak of is funded by the government, not private business. Probably 80% of foundational medical research in this country is funded by the government. Clinical drug trials, which are really the last stage in 10-15 years of research, are often a joint effort between governments, the research institution and a drug company. But the idea that a “free market” health care system is inherently innovative is just false. Science takes so many random routes that for-profit companies are just not willing/able to pay for it.
I would argue that the government would be no worse than insurance companies in innovation if it had responsibility for ensuring everyone. Medicaire already covers a large enough number of people for us to see evidence of how well/poorly the government would do as an insurance company.
If you read the article in the journal I linked to, they commented on this. While there are “controversies” in all the universal health care systems in each country, none of the people covered by those policies would trade it for ours.
The idea that we have to come up with some perfect system before we can replace ours is just silly. Ours sucks. Costs are out of control, 1/4 of the nation is uninsured and probably another 1/4 is underinsured (which is a big reason why unexpected medical costs often lead to bankruptcy). This is a direct result of our model, which as Kimmitt has pointed out, actually has the opposite effect that you state.
If you want social mobility, make it so people don’t have to worry about losing health care if they switch or lose their jobs. Make it so people can’t be bankrupt if their kid gets cancer that comes back two or three times. Make it so people don’t have their raises eaten up by the high cost of basic health care.
Oh, and the argument about whether it’s a “right” is really a non-starter. Pragmatically speaking, everyone wants and needs healthcare. Unless we’re willing to let 1/2 of this country go uninsured (and pay for the resultant emergency care through higher taxes). Since many countries have proven that government is the “best” insurer – cheaper, more efficient and fewer issues, then it’s just in our best interest as a country to provide it that way. I think the satisfaction results and the results of how doctors in other countries feel about not having to deal with 5 insurance companies shows that this type of “government interference” is preferable to the current model.
Kimmitt
Um, the government does provide water to people, for very similar reasons — because the state’s the best entity to run a sewage system in most cases.
emily
Food and health care are not really comparable, because almost everyone can get by with about the same expenditure on food. Your food/shelter needs do not differ drastically from the person standing next to you. It is something you actually can take responsibility for.
Your health care requirements are not nearly so predictable or controllable. They may range from zero to massive. Right now, your ability to cope with those requirements depends on what your employer-provided plan will cover, what it will require in co-pays and deductibles (assuming you have insurance), and sheer dumb luck in too many cases.
jcricket
Oh, and regarding food, the government does provide (in a way) for people that can’t afford it. It’s called food stamps. They also provide farm subsidies, which distort the food market. At an rate, in this country the food market is largely competitive. You have tons of choice: low to high-end grocery stores, warehouse clubs, organic food co-ops, convienence stores, and even fast food (not good for you, but cheap). Not to mention growing some of your own food.
The health care market is one where a “company’s” motives (maximize profits, minimize/eliminate liabilities) run counter to how health care needs to work. That is, unless we as a society are willing to say that people who happen to get an expensive condition or are too poor to afford healthcare are just SOL.
We might say, for example, “New car too expensive? Take the bus.” We’re not going to say the government should buy cars for everyone, although we do try to provide alternatives (mass transit, van pools, etc.).
How would that work for health care: “Treatment too expensive? Please die”. Or “Treatment too expensive? Declare bankrupcty (if you still can) or put it off until you need emergency treatment which we all pay a lot for through taxes”
Oh, and the government does provide shelter (mortgage subsidy, low-income housing) and jobs (unemployment insurance, welfare-to-work programs, etc.). At the very least the government needs to provide a “health care floor” for everyone. I also think the statistics I’ve linked to show that providing a pretty “high” floor for everyone is cheaper than providing a very low floor for just the poor and elderly (what we do now).
timekeeper
It is illegal for any hospital in the United States to provide emergency health services for any person, regardless of their ability to pay. This would seem to qualify as a floor of sorts. It is not the most efficient way to go, but people are not dying in the streets because they have been turned away by the local medical center.
timekeeper
Whooops. Preview is my friend…
That should read: It is illegal for any hospital in the United States to DENY emergency health services for any person, regardless of their ability to pay.
Kinda changes the whole thrust of the argument.