News » April 27, 2005

GMs Healthcare Double Standard

Bad ideology trumps good business

By Dave Lindorff

Canadian healthcare in action.

What a difference a border makes. General Motors executives say soaring health costs in their U.S. plants are forcing them to seek health benefits give-backs from unionized workers, yet they insist national healthcare is not an appropriate solution for America. As company spokeswoman Sherri Woodruff puts it, “GM thinks there has to be closer cooperation between the government and the private sector, but we don’t advocate a single-payer system for the U.S.”

Yet just across the Detroit River in Ontario, the company’s subsidiary—like the subsidiaries of Ford, DaimlerChrysler and other U.S. firms————strongly endorses Canada’s national health system.

“The Canadian plan has been a significant advantage for investing in Canada,” says GM Canada spokesman David Patterson, noting that in the United States, GM spends $1,400 per car on health benefits. Indeed, with the provinces sharing 75 percent of the cost of Canadian healthcare, it’s no surprise that GM, Ford and Chrysler have all been shifting car production across the border at such a rate that the name “Motor City” should belong to Windsor, not Detroit.

Just two years ago, GM Canada’s CEO Michael Grimaldi sent a letter co-signed by Canadian Autoworkers Union president Buzz Hargrave to a Crown Commission considering reforms of Canada’s 35-year-old national health program that said, “The public healthcare system significantly reduces total labour costs for automobile manufacturing firms, compared to their cost of equivalent private insurance services purchased by U.S.-based automakers.” That letter also said it was “vitally important that the publicly funded healthcare system be preserved and renewed, on the existing principles of universality, accessibility, portability, comprehensiveness and public administration,” and went on to call not just for preservation but for an “updated range of services.” CEOs of the Canadian units of Ford and DaimlerChrysler wrote similar encomiums endorsing the national health system.

How can the same corporations that in Canada recognize the bottom-line logic of a national health system be so opposed to the idea here?

One answer is ideology. The notion of having the government take over an industry that represents about 15 percent of the U.S. economy gives U.S. executives the willies. But in backing insurance company interests, GM runs counter to both its own business interests and the sentiments of many customers.

Polls have long shown a majority of Americans favor some kind of national healthcare system. Now, with studies suggesting that the average cost of providing health benefits has reached $6,800 per employee, corporate executives may join the broader public in finally taking a look at the Canadian model. “Is there a private sector solution to the rapidly increasing cost of healthcare? Probably not,” says Deloitte Consulting’s Jon Erb. “There would be huge resistance to a wholesale national solution because the tentacles of the healthcare industry reach into all sectors of the economy, but I suspect you’ll see business’ strategy will be to sneak a single-payer system in a little bit at a time.”

Back in 1970, a year before Canada switched from an employer-based, insurance company-administered health system like that in the United States to a national single-payer model, both countries were devoting about 7 percent of GDP to healthcare. Today, Canada devotes 9.1 percent of GDP to healthcare, while the United States devotes a whopping 15.1. Meanwhile, Canada boasts better health statistics and all of its citizens are fully covered, even for catastrophic illnesses like cancer or AIDS. In the United States, some 15 percent of people have no insurance coverage at all and medical costs are the leading cause of bankruptcy.

U.S. conservatives routinely attack the Canadian system for its reputed long waits and for driving many Canadians across the border for treatment. In fact, however, Canadians love their healthcare system, and keep electing candidates who back it. Moreover, Canadians say U.S. criticisms are gross exaggerations. A study by Steven Katz et al. in Health Affairs found that in fact the only real Canadians using U.S. healthcare were “snowbirds” and resident aliens.

According to GM Canada spokesman Stew Low, the charge that Canadians endure terrible delays in getting treatment is also overblown. “It comes from people with an axe to grind,” he says. “In general, people here have ready access to healthcare.”

Meanwhile, in the United States, health insurance coverage is worsening. The New York Times reported recently that the percentage of companies paying 100 percent of employee insurance premiums had “plummeted” over the last four years, from 29 percent to only 17 percent. Worse yet, many employers are simply dropping health benefits. Before long, healthcare benefits in the United States will be the exception, not the rule.

Maybe Congress should invite GM Canada’s Grimaldi down to talk about how Canada deals with the problem.

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• Reader Comments

  The insurance industry itself is a symptom of cancer in the hearts of men.

  Posted by SGB on Apr 28, 2005 at 1:00 AM

  Universal medical care is the hallmark of a civilized society.  The republicans have a long way to go.

  Posted by Lefty on Apr 28, 2005 at 1:09 AM

  The most frustrating thing about this particular debate is the lack of a mathematical model (from either the pro-univ. health care side or the anti- ) that backs cost-benefit assertions with actual and complete data, rendered in a way that non-PhDs or non-partisans can grasp. All we get is selective reporting, anecdotes, and (as the article points out) rampant ideology. From anyone, can either of the arguments, “It’s unaffordable” or “It can be done”, be supported with some numbers that reflect what would really play out if health care was provided as a right of citizenship? Because short of that demonstration, in testable terms, we’ll just be stuck with the current situation, in which corporate money and influence coupled with anti-tax rhetoric will keep any change in this realm from happening.

  I understand the moral argument against basing access to health care on whether it can be afforded (or, more correctly, that it is restricted from those who can’t at least afford decent insurance), but that tactic seems to be going nowhere. A data-based argument might (I emphasize, might) be more persuasive, to citizens if not to the governing boards of corporations that market health services or insurance. The benefits to the country of subsidizing preventive health services and education over and above catastrophic intervention would be an obvious inclusion.

  Posted by Kuya on Apr 28, 2005 at 6:52 AM

  Access to health care is a universal human right.

  Posted by Ben on Apr 28, 2005 at 11:30 AM

  Ben, I disagree.  A “right” to a service implies the mandatory servitude of others.  Rather, in a country that can easily afford to do so, universal medical care is just “the right thing to do” because, on balance, it has proven to be more efficient economically, and universal medical care is SAFER than the medicine provided by private enterprise.

  Posted by Lefty on Apr 28, 2005 at 12:53 PM

• extended discussion >>>Continued...

  Discussions with more than 5 comments are continued on our special discussion page to encourage continuity and ease of use. There are currently 13 posts.

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