Single-Payer: Good for Business | The Nation


Single-Payer: Good for Business

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Canada has had a single-payer system for more than thirty years. (Australia, Denmark, Finland, Iceland, Sweden and Taiwan also have one.) American executives who have run Canadian subsidiaries see it as a business boon. Take General Motors. In 2003 its costs of building a midsize car in Canada were $1,400 less than building the identical car in the United States (the comparable figures for DaimlerChrysler and Ford were $1,300 and $1,200). Such savings are no mystery. Canadian companies pay far less in taxes for health coverage for everyone than the premiums they would pay under the US system to provide their employees with comparable benefits.

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Morton Mintz
Morton Mintz covered the Supreme Court for The Washington Post from 1964 to 1965 and again from 1977 to 1980. He is a...

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Highly placed Canadian business executives affirm that single-payer nurtures free enterprise. A. Charles Baillie, while chairman and CEO of Toronto Dominion Bank, one of Canada's six largest, hailed it in 1999 as "an economic asset, not a burden." He told the Vancouver Board of Trade, "In an era of globalization, we need every competitive and comparative advantage we have. 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." (A recent report by the World Bank ranked welfare states like Denmark, Finland and Sweden high in international competitiveness. An author of the study said, "Social protection is good for business, it takes the burden off of businesses for health care costs.")

In 2002, top executives of the Big Three automakers' Canadian units joined Basil (Buzz) Hargrove, president of the Canadian Auto Workers (CAW) union, in signing a "Joint Letter on Publicly Funded Health Care." At a press conference with Hargrove, Michael Grimaldi, president and general manager of GM Canada and a GM vice president, called single-payer "a strategic advantage for Canada." The joint letter, also signed by Ford's and DaimlerChrysler's presidents and CEOs, Alain Batty and Ed Brust, said that while providing "essential and affordable healthcare services for all," 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." The Toronto Star explained how the CAW used "credible corporate data" to quantify "the competitive advantage that [single-payer] provides to the Canadian auto industry. The union compared the hourly labour costs of vehicle assembly in Canada and the United States. The Canadian rate, including wages, benefits and payroll taxes, was $29.90 per hour. The American rate was $45.60. (All figures are in US dollars.) Healthcare accounted for more than a quarter of the difference. It saved Canadian employers $4 per hour per worker." Monthly health-coverage costs for Canadian employers average about $50, mostly for items such as eyeglasses and orthopedic shoes; health-insurance costs for US employers average $552, the Washington Post has reported.

"The rising cost of health benefits is the biggest issue on our plate that we can't solve," Ford CEO William Clay Ford told a 2003 conference of Michigan business executives. "Healthcare is out of control--it's a system that's broken." Last year the company spent $3.2 billion on healthcare for 560,000 employees and their dependents and surviving spouses, or more than six times net profits of $495 million. William Ford urged a national solution and assigned vice chairman Allan Gilmour to craft a proposal. Early this year Gilmour told fellow industry executives that high healthcare costs have "created a competitive gap that's driving investment decisions away from the US." He told a subsequent investment conference, "We're going to have to have a national solution," only to add, "That national solution does not mean, necessarily, national healthcare." Why not? He didn't say.

After Jack Smith, president and general manager of GM Canada, became president and CEO of the parent company, an ad in the New York Times placed by single-payer advocates in 1994 quoted him as saying, "I personally favor single-payer." Now, however, GM "does not support" it, spokesperson Doris Powers told me. Because? "Much has changed in health care since Smith...made statements about universal, single-payer healthcare." What's changed? She didn't say.

A General Motors that hugs single-payer in Canada would seem to have compelling reasons to hug it here. GM covers healthcare costs for 1.1 million Americans. Last year's bill was $4.8 billion--$1 billion more than earnings. In its third-quarter report the company reduced its 2004 earnings forecast because rising US healthcare costs were hurting profits. GM's projected costs for providing healthcare benefits to current and future retirees is $63 billion, a burden immensely heavier than is carried by competitors based in universal-coverage countries, the New York Times reported in September. Yet, as the Detroit Free Press has noted, GM "has set aside less than $10 billion for that obligation."

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