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Labor and business' health care alliance?

April 13, 2007 | Page 7

LANCE SELFA asks whether Corporate America can be trusted to support genuine health care "reform."

EVERY MAJOR Democratic candidate for president is promising a plan for "universal health care" in 2008. Even Republicans like former Massachusetts Gov. (and current presidential candidate) Mitt Romney and California Gov. Arnold Schwarzenegger are using the rhetoric of universal access to promote versions of health care reform.

The increasing talk of universal health care reflects a public mood that is more open to social reform. But it hasn't been public opposition to universal health coverage that has doomed these efforts in the past.

In the 1940s, the American Medical Association red-baited a Truman-proposed program as "socialized medicine." In the early 1990s, the last time when health reform was seriously discussed, sections of business--including small business and mid-sized insurance companies--torpedoed Bill Clinton's pledge of "health care that is always there."

If anything, conditions are worse today than in 1992. Business has shown that it is ruthlessly committed to cutting health care costs. And like the debate in official Washington during the Clinton years, many of the current plans being discussed are crafted with the idea that the key problem with the U.S. health care system is its cost to business and U.S. competitiveness in the global economy. One study estimates that the cost of health care to American business will outstrip profits by 2008.

Wal-Mart CEO Lee Scott created a stir when he held a February press conference with Service Employees International Union President Andy Stern to announce a joint campaign to create universal access to health care by 2012.

Also, union-busting Safeway CEO Ronald Burd has become an "evangelist" among CEOs for universal health care, according to a recent New York Times Magazine article. Burd is the most prominent business supporter of a plan by liberal Sen. Ron Wyden (D-Ore.) to require all Americans to have health insurance.

But just how "universal" are these business-backed plans for national health care? Not very--and that's by design. Any plans that proceed from the assumption that the key problem with American health care is its cost to business and the economy makes cost containment, and not access to health care--or actual health--the focus.

One might take a look at the plan Burd recently implemented for nonunion workers at Safeway. Although this is touted as the inspiration for Wyden's plan, it relies on low premiums and high deductibles to discourage workers from using health services. It encourages "good health behaviors" by supporting preventative health care--and it provides a 24-hour hotline for workers to reach health professionals, so they might be able to treat themselves for minor illnesses and injuries.

While this approach may have some positive benefits, it tends to treat workers' behavior--and their "overuse" of expensive health care services--as the real problem of the U.S. health care system.

In reality, the underlying assumptions aren't all that different from those of the phony health care initiative President Bush announced during his State of the Union address--ending tax breaks for employer-provided health care so that workers will be "weaned away" from "Cadillac-style" health care plans.

Even worse is the idea--also contained in the recently passed Massachusetts law requiring every person in the state to own health insurance--of an individual "mandate" for health care insurance. Under these plans--including Wyden's--the link between employment and access to health care would be broken. While that change underpins all genuine plans to make health care a right, the Wyden plan would (and the Massachusetts plan does) obligate the individual, rather than the government, to assure access to health care.

"[A]ll employers that offer insurance would 'cash out' their benefits--in effect, giving their employees higher wages rather than health benefits," Jonathan Cohn wrote in a New Republic article praising the Wyden proposal. "Once that was done, people would be required to buy coverage on their own, directly from insurers."

This idea really amounts to a leap of faith. If employers think that the main problem with the health care system is its threat to their profits, wouldn't they view increased wages in the same way? Wouldn't they rather keep the profits for themselves? The auto and steel manufacturers busily working to rid themselves of "legacy costs" for retirees would certainly think so.

And in the event that employers do follow through on their end of the bargain, workers will still be faced with a bewildering set of private insurance plans whose quality will vary by ability to pay.

Nor is there any real reason to think that business--even for its own enlightened self-interest--will support any plan that will truly make health care a right for all Americans.

The same hopes that business would, for its own good, accept the Clinton plan in the early 1990s were dashed pretty quickly. With the National Federation of Independent Businesses spearheading the opposition, the Clinton proposal stalled and its business supporters began backing away--suggesting they weren't all that committed to it in the first place.

Despite the early support of the Scotts and Burds for the vague goal of "universal access to health care" at some future point, there's nothing holding them to it. And for a business establishment that is accustomed to low taxation, a pitiful social safety net, and weak or nonexistent trade unions, it shouldn't be surprising if it jettisons support for national health care.

If the failure of the Clinton plan shows anything, it's that trying to tailor a national health care system to the immediate demands of big business is a loser.

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