Sunday, February 08, 2004
NY Times: Whose Problem Is Health Care?
After corporate income taxes, employee benefits are the second-largest structural cost for American manufacturers, adding 5.8 percent to costs, according to the study. In all major economies, paying for health care means a combination of public and private money. But in the United States, businesses pay a larger chunk than do their European and Asian counterparts.Best quote, predictably, comes from the eminently quotable Uwe Reinhardt, "an economist at Princeton, has referred to General Motors, Ford and Daimler-Chrysler as 'a social insurance system that sells cars to finance itself.'''
"In Canada, for example, a lot of the expenditures for health are funded out of general revenues," said Jeremy Leonard, an economic consultant for the Manufacturers Alliance, and the report's main author.
In Canada, the private sector spends 2.8 percent of gross domestic product on health care; in the United States, the private-sector figure is 7.7 percent. And American private-sector spending falls disproportionately on big employers like manufacturers. Some 97 percent of members of the National Association of Manufacturers provide health care coverage for employees. In 2002 alone, General Motors, which covers 1.2 million Americans, spent $4.5 billion on health care.
The debate is between a governmental program for retiree health care (and can employee health care then be far behind?) and the current, privately financed employer-based approach. The article concludes, "Whatever way, we all pay." Increasingly, though, large employers are looking for ways to shift their health-care costs to a larger denominator (say, all taxpayers). The tradeoff in terms of slight increases in corporate taxes will be more that offset by the many-times-larger reduction in health-care costs. It will be interesting to see if and when the captains of industry start throwing themselves behind a national, single-payer system. . . .