Single-Payer: Good for Business | The Nation


Single-Payer: Good for Business

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In 2001 GM was reeling from a prescription-drug bill up to 22 percent above 2000's $1.1 billion. "Prescription drugs are the fastest-growing part of GM's health-care costs, accounting for more than 25 percent of its total medical spending last year," Newsweek reported. GM was "seeing red" because in 2000 it had spent $52 million just for Prilosec, a brand-name ulcer medicine. "That is millions more than GM executives believe they should have spent," the magazine said. "They blame much of the extra cost on savvy marketing by Prilosec's maker AstraZeneca." GM is fighting back with an "aggressive plan to curb drug spending," Newsweek continued. "Point man" James Cubbin "has been taking his case to senior executives at some of the nation's largest drug makers, including AstraZeneca."

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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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By a vote of 5 to 4, in December 2003, the Supreme Court upheld a major provision of the McCain-Feingold campaign finance act that prohibits corporations (and labor unions) from paying for ads that mention the name of a federal candidate, and that are broadcast 60 days before an election or 30 days before a primary.

That narrow ruling is now under challenge and could be overturned in the next few weeks, thanks to President Bush's appointments of John G. Roberts Jr. as Chief Justice and Samuel A. Alito Jr. as an Associate Justice.

The case involves Wisconsin Right to Life, Inc., which campaigned to prevent the re-election of Senator Russell Feingold (D-Wis.), by taking large sums of money from corporations to buy phony "issue" ads on radio and television. The ads attacked Feingold and Herb Kohl, the other Wisconsin Democrat in the Senate, for blocking Bush judicial nominees. Under the 2003 decision, such bogus ads were the "functional equivalent" of campaign ads and thus banned by the McCain-Feingold provision.

Outrage over excessive rewards for incompetent executives could spark the Democratic Congress to action.

But Newsweek--and Powers--missed an embarrassing part of the story. AstraZeneca chairman Percy Barnevik joined GM's board in 1996, while Smith was GM's chairman. Pfizer executive vice president Karen Katen followed in 1997, and the noses of both of these price-gouging drug companies are still in GM's tent. Surprise: The pharmaceutical houses "aren't backing down," Newsweek said. Rather than going hat in hand to pharmaceutical executives, Canada uses single-payer's price controls to cap drug prices. In two other universal-coverage countries, Australia and New Zealand, pharmacies charge 20 percent to 30 percent less than in Canada, the Wall Street Journal reported in July.

Unlike GM and Ford, DaimlerChrysler supports single-payer. "A lot of people think a single-payer system is better," vice president Thomas Hadrych told the Washington Post. Since 1990 Chrysler--and DaimlerChrysler after the merger--has regularly endorsed it, in a letter appended to its contracts with the United Automobile Workers.

No matter how urgently needed, no matter how common-sensical, no matter how much bottom lines would be fattened, single-payer or other fundamental healthcare reforms stall unless backed by the business organizations that govern the government. The Clinton Administration learned this to its sorrow after proposing its complex, comprehensive plan. Business organizations "effectively killed the bill," Walter Maher, former vice president for public policy of DaimlerChrysler, wrote last year in the American Journal of Public Health. The bill aroused formidable opposition from businesses such as fast-food chains like McDonald's. It mostly hired young people, worked them less than full time, paid them little and provided scant if any health coverage. Of the PepsiCo chains' hourly employees, a survey indicated, 71 percent were covered by someone else's health insurance. If that someone was a parent employed by, say, an automaker facing global competition, the manufacturer was effectively subsidizing chains that had no such competition. Free-riding defeated a primary goal of the bill, which was to spread healthcare costs throughout the economy by letting no employers escape paying their fair share.

The bill received a big boost when the US Chamber of Commerce and the National Association of Manufacturers (NAM) let pragmatism trump ideology and endorsed it. And the mighty Business Roundtable (BRT), an association of 150 CEOs of the country's biggest corporations, with multitrillion-dollar revenues, was "at least prepared not to oppose" the mandate, Maher said in the article.

But insurers and other businesses that profited from preserving the healthcare status quo exerted fierce counterpressures. The Chamber "suddenly reversed course and totally rejected the Clinton Plan," Maher wrote. The NAM abruptly withdrew its endorsement six weeks after granting it. At the BRT several politically powerful members, including the CEOs of eight major and a few lesser pharmaceutical manufacturers, and of a dozen insurers and healthcare providers, opposed the bill. It got only a single vote--Chrysler's, Maher told me. "It's definitely fair to say that CEOs are very reluctant to take unpopular positions against their colleagues in the BRT," he added. "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."

Today, BRT executive director Patricia Hanahan Engman contends that "public financing cannot provide the same level of quality doctors, hospitals and prescription drugs generated by the competition inherent in the private market." She should tell that to GM president and CEO G. Richard Wagoner Jr. Judged by sixteen top health indicators, he said in June, the United States ranks twelfth among thirteen industrialized countries. "It will be a cold day in hell when the BRT leads the charge for universal health coverage in the United States," Maher told me.

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