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What's Good for Canada is Good for General Motors

by Dave Lindorff Tuesday, Apr. 19, 2005 at 1:38 PM
dlindorff@yahoo.com

What’s going on here? Up in Canada, executives in charge of the Canadian subsidiaries of U.S. firms are not just praising Canadia’s socialized medical system; they’re lobbying to have it expanded to include pharmacy and home health care. Back here in the States, though, they’re all lobbying furiously against any hint of government-funded health care.

[NOTE: This article appeared originally in In These Times]

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 health care is not an appropriate solution for America. As a company spokeswoman 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 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 00 per car on health benefits. Indeed, with the nation's taxpayers sharing 75 percent of the cost of Canadian health care, 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 which said, "The public health care 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 health care 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 health system. Now, with studies suggesting that the cost of health benefits has reached 00 per employee, corporate executives may join the broader public in finally taking a look 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's 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 health care. Today, Canada devotes 9.1 percent of GDP to health care, 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 (though that may change now that Congress and the president have made declaring bankruptcy far more difficult).

U.S. conservatives routinely attack the Canadian system for its allegedly long waits and for driving many Canadians across the border for treatment. In fact, however, Canadians love their health 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 the magazine Health Affairs found that in fact the only real Canadians using U.S. healthcare were "snowbirds" and resident aliens, while a number of U.S. patients were going to Canada to get cheaper care for such uncovered treatments as LASIK eye surgery.

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 health care."

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 altogether.

Before long, health care benefits in the United States will be the exception, not the rule.

For the rest of this column and other stories by Lindorff, please go (at no charge) to This Can't Be Happening! .

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