A blog by an American expatriate living in the heart of New Europe

"It's a lateral transfer" -- George W. Bush, 43rd President of the United States
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Tuesday, October 18, 2005

Rumors are flying

... that GM's deal with its unions signals the beginning of a trend for American companies cutting health-care benefits to employees. Nine percent fewer companies offer the benefit now than they did in 2000. The ones that do are paying nearly twice as much as they did five years ago.

In a global economy, [Delphi's Steve] Miller argues, American business can no longer afford labor contracts that require it to "burn the furniture" to feed ever-growing pension and health-care obligations. "What's happening at Delphi is just a small part of a huge national problem," he says. "This is our country's dilemma as we talk about Medicare and Social Security."

I was just given helath-care benefits from my Polish employer this year. Maybe I'll stay.

Is your health-care plan safe?

[N]early 40 percent of American corporations plan to ask their workers to pay more in premiums next year, as health care continues to take a bite out of the bottom line.

What would you do if your company pulled your health plan out from under you? What will working blue-collar America do?

Might be a good time to have a national health-care system to fall back on, dont' you think?

Maybe not, if you believe national health care is a detriment to the market. And if you do, here's something to chew on:

Union and industry officials say U.S. automakers operate at a disadvantage to overseas rivals because of their commitments to pay for the health care and pensions of a large retired work force. By contrast, most of their rivals are based in countries with national health care, limiting carmakers' obligations to current employees

Think business wouldn't be interested in supporting a plan for national health care?

Last week [Miller] spoke to Hillary Clinton and says they agreed to work together to get Washington to reconsider health-care reform.

That's right. Big Business is going to Hilary Clinton - the biggest champion for national health care in America - to talk about "health-care reform".

It can only mean one thing:

Big Business is about to get behind national health care - and the Democrats are the only ones who will give it to them.

Just wait. Companies can't afford the alternative.


Pysicians for a National Health Program - Single-Payer: Good for Business

Survey finds fewer small businesses offering health coverage

“It is low-wage workers who are being hurt the most by the steady drip, drip, drip of coverage draining out of the employer based health insurance system,” Kaiser Family Foundation President and CEO Drew E. Altman, Ph.D., said.

WBJ (Subscription required): Delphi's Polish plans won't stall

But Polish operations will go untouched, according to the company's executive in Poland, Marek Adamiak. "Firms belonging to Delphi in Poland are in a good financial condition, have a competitive cost structure as well as a diverse client base," the president of Delphi Poland told Rzeczpospolita.

The part-producer's main problems lie in a whopping $11 (zł.35.6) billion in pension, health-care and other retiree liabilities to its US workforce. Lower wage and benefit costs in Poland - where labor is cheap and health care is covered by the government - mean that Delphi's Polish production has been profitable. Thus, instead of scaling back its Polish production, the company has just signed an agreement with government officials to invest a further zł.5 million in Kraków for a new R&D center which will employ some 264 highly-trained engineers.

San Francisco Chronicle: In Critical Condition

By many measures, Canadians are healthier than Americans, with a longer lifespan and lower infant mortality, even though they spend much less on medical care. Canadians devote about 10 percent of their gross domestic product, the total of a nation's goods and services, to provide full health coverage for all citizens. American health costs account for about 14 percent of GDP, yet 45 million Americans have no health insurance and many more have limited coverage.

One of the main culprits pushing up the cost of care in the United States is the expense of administering a plethora of complicated health plans. It has been estimated that any large health insurer in a midsize U.S. state spends more on administration than is spent on health administration in all Canada.

Dr. Catherine Kurosu is a gynecologist at two San Diego hospitals. A Canadian, she said the biggest differences between the two systems are that poorer Americans won't seek medical care until their problems have become serious. In addition, she said, American insurers often play games to avoid paying bills.

The article also discusses the problems of the Canadian system, which is far from perfect. But the differences in costs are surprising.


Blogger Asif said...

Nice work.

10/18/2005 02:15:00 PM  

Blogger Andrew said...

Finally, a reason for big-business to back democrats. Great!
There is more to GM's problems though than pensions and health care costs. In my opinion, they have no ability to look ahead and judge future demand. If big SUVs were still selling they wouldn't be sunk by these liabilities just yet. The fact is that successful companies can afford to pay health insurance. Such badly managed companies deserve to go bankrupt.

10/20/2005 04:57:00 AM  

Blogger Gustav said...

Good point Andrew. But no matter how well managed, companies go through good times and bad. If you had told GM 5 years ago that they needed to invest in more efficient cars, I suspect they would have thought you were crazy.

deserve to go bankrupt

But the employees don't deserve to lose their jobs or benefits.

Michigan is already hurting pretty badly - unemployment is worst in the nation, etc.

I favor a combination. I strongly believe that a national health-care system should be there as a backup for those who can't afford it and who don't have the job benefit.

But I also believe that the private system creates competition which spurs better medicine and technology - not to mention service. We need not bring up Poland's national health-care system now, do we?

Why not find a way to get the right mix?

10/20/2005 05:29:00 PM  

Anonymous Blue Cross of California said...

Well said.

12/18/2005 04:21:00 AM  

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10/06/2007 09:27:00 AM  

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