I'm getting a lot of comments claiming that the real problem is the lack of universal health care in the US. How can GM and Ford possibly compete with German and Japanese companies whose employee healthcare is paid for by the government?
Well, you're right, they can't. That's because there are no German or Japanese auto companies whose employee healthcare is paid for by the government. Both countries have a government-regulated system of employer-provided healthcare.
Moreover, this ignores the fact that insofar as health care is the fundamental problem here, the problem is with retiree health care, not health care for current workers. In other words, with people who are already mostly covered by America's universal healthcare system, Medicare.
Why have the Big Three provided extremely expensive health benefits for retirees for decades, when there was a really very generous government program available? Because that's what the union wanted, and it had enough muscle to get it. Unless you actually do as Canada has done, and make private health plans illegal, there is nothing in a system of universal health care that prevents employees from asking for more generous benefits than the government provides. Which means that moving to universal health care will do exactly nothing. If the union can extract value in the form of expensive health benefits, it can extract that value in the form of cash, job security promises, beefier pension funds, or whatever it thinks the membership wants most.
Copyright © 2009 by The Atlantic Monthly Group. All rights reserved.
Are there some numbers for the costs? What is the average pension payout for GM? What is it for a comparable industry, or the rest of the country? What is the retiree health cost to GM? What is the cost for an average retiree?
I think Mark asks the obvious questions. Or put another way, what is the "healthcare component" in a VW versus a Toyota versus a Chevy?
Because that's what the union wanted, and it had enough muscle to get it.
Yeah, because people need health care. You need it, and you get it. They need it to. People need health care. The government in this country, for some reason, doesn't provide it for them. So they get it from their employers. Wow, what duplicity, huh? What temerity. How dare people in the most economically powerful country in the world think that they maybe should have access to appropriate health care for themselves and their families.
I want you to write a post where you continue to argue for the extermination of the auto industry, but do what you never do: admit that there will be catastrophic losses to the communities that are so affected. Admit it. Thousands and thousands of people will be cast into financial crisis and uncertainty by exterminating the Big Three. Thousands. The human cost will be incalculable. So by all means, continue to argue for cutting off the heads of an industry that employs many thousands in this country, one that (horror of horrors) actually affords people the opportunity to raise a family, own a home, send some kids to college. You know, that American dream thing conservatives are always going on about? That is, unless a union is involved, in which case everyone so employed can go to hell, and wait on line at the soup kitchen.
Until libertarianism stops acting as though advocating spreading human loss and pain is somehow a mark of seriousness-- until it moves out of the "dorm room conversation" phase where people get off on being the most "outrageous"; where points are scored for being the least concerned with human suffering; where you demonstrate your seriousness by how quick you are to relegate other people to poverty, joblessness and lack of healthcare; until libertarians stop delighting in the idea of ending the union system that has given hundreds of thousands of people the ability to work and raise a family-- until stuff like that happens, your ideology will remain a juvenile and immature caricature of a movement, and you'll continue to suffer the kind of repudiation and defeat you suffered last Tuesday.
tsk. tsk.
Looks like Freddie read Megan's post just fast enough to totally miss her point.
The government in this country, for some reason, doesn't provide it for them.
I don't think Freddie read the post very carefully. The point of the post is that, when it comes to healthcare for the auto company's retirees, the government DOES in fact provide it for them. There IS in fact a government provided healthcare system that the retirees can access.
And yet the union still negotiated very expensive retiree health care, in excess of the government provided health care, anyway.
. The government in this country, for some reason, doesn't provide it for them.
Megan said this about retirees. Our government does provide medical insurance for retirees.
Thanks to the 2007 UAW agreement, the carmakers and union had a strategy for dealing with the legacy costs for past health care commitments, and new employees (salaried and hourly) simply don't get retiree health care.
The fact is, given reasonable business conditions, GM was well on its way to restructuring in a way that eliminated the problems of the past. This restructuring was interrupted by the credit crisis, which has caused sales (and revenue) to plunge. Even that would be manageable if it were possible to get a bridge loan from private credit markets. That, however, isn't possible.
Ideology aside, the sensible thing is for the government to provide the bridge loans to allow GM to say alive long enough to complete this restructuring. Just letting the company slide into bankruptcy is a recipe for a great big economic mess.
If anyone wants the numbers, our latest 10-Q on the GM Investor site lays all of this out in excruciating detail.
BTW, it seems to me that one of the huge benefits of bankruptcy would be that a judge could abrogate the retirees' right to gold-plated health care. The poor retirees would then be stuck with... exactly what the left-wing in this country wants to stick them with: government provided healthcare (namely Medicare).
Are cars like camera film, that is, obsolete? No. They are part and parcel of way of life. They will be a big part of our future. Having car companies here in the States is of vital strategic importance to us to, amongst other things, build toward energy independence, a goal we have already committed to for many reasons.
Not only is making cars here in the states important, but you can't have all of these folks out of work at once without paying for them one way or another. In a depression, when you close the door on opportunity, new doors don't necessarily open. I would rather have these folks building the cars of the future than standing on a welfare lines, which is what's most likely to happen if the Big 3 fold.
If the Big 3 fold, we lose the opportunity to build the cars of the future here at home, all of that future money goes elsewhere; we pay for these worker's welfare. We pay to re-train them. What a lost opportunity - they could start working towards our energy independence starting today. What a great investment.
The fact that people are going to suffer isn't the only salient fact, it's true. But if we're going to have an honest conversation about these questions, we need to confront the full range of consequences of not saving these companies. That's going to include really incredibly hard times for a huge amount of people. Eliding past that helps no one, except in the selfish interest of leveraging a political point. Now I could be convinced that, in the long view, it's better that these people go through this now to prevent greater hardship later. But I can't pretend that they don't exist, nor will I be a party to the denial of the inevitable hardship that they are going to endure if they Big Three are allowed to collapse.
"Which means that moving to universal health care will do exactly nothing."
That's not entirely true, MM. It will have a direct impact on what medical care is provided to the rank and file who don't receive benefits above and beyond what the government, in all its infinite wisdom, will be willing, and able to provide.
Just last month, in the UK, a man had to take is case for available cancer meds to their highest court because his healthcare provider refused to prescribe them.......I expect we would see more of the same.....
Freddie--
There will be significant, but not necessarily catastrophic, losses for these communities. Thousands and thousands of people will be cast into financial problems (though not necessarily crises) and uncertainty by the death of the Big Three. There, I admitted it, and I'm sure Megan would too.
"Cutting off the heads of an industry"? You're ascribing intent to the neutral arm of the marketplace. The Big Three are failing because they're not making enough money. They're not making enough money because of some combination of (1) people aren't buying their cars and (2) the companies are paying their employees too much. It's up for debate which of the 2 explanations are dominant; it's not up for debate that the Big Three are failing because they're just not that good. It's not like there's some evil mustache-twirling villain pressing buttons to depress GM's revenues.
So yeah, it's going to suck for their employees in the short run, and maybe even in the long run. But it'll suck a lot more for the nation if we inject big, uncompetitive companies with cash so that they'll crowd out new, competing companies. If this sort of thing happened without government involvement, you'd call it an antitrust violation (and you'd be correct.) That was a significant component of the New Deal--relaxing antitrust regulations so that the government could prop up underperforming monopolies, because competition caused companies to fail, which put workers out of jobs.
In short, what liberals like you fail to understand is that money and goods don't materialize out of thin air. You're not giving money to GM out of nowhere. You're taking it from the consumers who didn't want to buy GM's products in the first place. You're taking it from GM's competitors who were making better products and beating it fairly. It's not particularly fair that a lot of employees who weren't at fault for GM's problems are going to get screwed, which is why I favor some amount of government support for those employees after the company folds. But saving jobs that shouldn't exist, and taking money from those who are winning in the marketplace to do so, isn't good for the nation.
Freddie, I haven't elided it. Indeed, I believe I wrote an entire post about how much it sucks to be a rust belt area that doesn't get a bailout. I also don't think that in the long run, the government can prevent the decline. And alleviating the suffering of those workers involves taking someone else's opportunity away. The federal government does not have a money tree in its back yard. Nor do the rich people from whom, presumably, you wish to take the money. (Well, I mean, they do. But printing money willy-nilly creates inflation, not jobs) Rich people do one of two things with their money: they buy things from people who have jobs making those things; or they save the money and lend it to someone who uses it either to buy things from people who have jobs making those things, or create new capacity to make things and employ people making those things. This is not a free lunch.
It was not a free lunch for the financial industry, in the short term, but there is decent reason to believe that there are circumstances where the financial industry--unlike other industries!--goes into a decline for reasons other than real resource scarcity, and can thus be reinflated to the net benefit of the entire country.
BTW,
I find the wording the the Big 3 could collapse and cease to exist to be a bit overdone and inaccurate.
With no intervention, they either adjust and bounce back or they get bought for a low price by another company and start a anew...or as per the agreement of sale.
Moreover, if they actually did die off, that simply leaves more room for foreign competitors to pick up the slack. It's not Asian car makers haven't been building new plants here every year. They indeed have and they hire...Americans. Wow!
Nothing lasts or stays the same...nor should it. Companies rise, companies fall and pools of captial react accordingly.
I can't tell - is Freddie @ 6:07pm an admission that he completely missed the point of the post?
Oh yes, Medicare, that "really very generous government program." So generous and workable that every eligible person who can afford to have private insurance does.
Do you really think that Americans would accept the sort of rationing that is a huge feature of all state-run healthcare systems? Hells NO! They'd hire the John Edwards of the world to sue the snot out of the government for the "right" to the most expensive treatments possible - and eventually they'd win, and utterly bankrupt the country in the process.
Healthcare will always be rationed, but better that it be done imperfectly be the market than awfully by government - at least when it is the market it is nothing personal.
First, please note that Canada does not make private health care plans illegal. The law in Canada is about the provision of many health care services - and the ability to charge individuals (or their health insurance plan) for those services. Canadians do not pay out of pocket for visits to doctors, medically necessary surgical procedures, and a variety of other health care services. Those services are paid for by the government (provincial, not federal), with funds generated by taxation.
There are many private health care plans, usually provided by the employer. They can cover the items not paid for by the government-paid-taxpayer-funded program. That can include dental care, eyeglasses, prescription drugs, private rooms in hospitals, and numerous other items.
Company-provided plans, often referred to as extended health benefits (extended beyond the government plan), are very common. Some employers pay the whole cost of the insurance, but most include employee contributions.
It would be nice if commentators from other countries would actually have the facts about Canada's health-care system, when making arguments.
OK, now for the other point - that it was the big, bad unions that were demanding these benefits. The unions and the management of the companies were both negligent in predicting the future costs. The unions made the demands, the companies all eventually agreed. They could have refused - it likely would have meant potential job action. But if the brilliant minds in charge had the ability to foresee the impact, then they should have been willing to take some losses for a few months of strike rather than facing bankruptcy today.
The union leadership were asking for too much, but the management gave in. They liked the profits they were making at the time.
What is not being recognized in this post, is that most of the top management will have some financial challenges if their company goes bankrupt. But there is a big difference between losing a lot when you have a lot more, than losing everything when you are doing OK right now.
That's not to say I back the idea of bailout of the auto industry. I have a problem bailing out any business that has been poorly run. It's the consequences of massive failure of large companies that need to be considered. What is the outcome without a bailout? What is the outcome with a bailout? Then decide.
And remember there is more than enough blame for the unions and management on this one.
Also, I am having trouble understanding Freddie. Is he saying that it would be "incredibly hard times for a huge amount of people" if the auto company retirees were forced to accept government-provided, single-payer healthcare (Medicare) instead of their current gold-plated health care?
Because, if I didn't know better, I might think that an admission by him that government-provided, single-payer health care is bad!
Good post, Megan.
Max,
"Are cars like camera film, that is, obsolete? No. They are part and parcel of way of life."
This is true, but there is overcapacity. See last Thursday's Lex column in the FT. Cheap credit goosed demand for cars for years here for years, but the credit crisis has ended that. The FT estimates that normalized demand, when the economy recovers, might by 6.5 million cars per year, versus 9 million in 2006.
I'm waiting for someone to explain how the UAW owned the management and forced them into making stupid concessions. Something better than, "well if they had resisted the UAW they would have lost a lot of money." Given that they are losing more money than ever now, I need something better. I bet on pansy management, but if anyone has something better I would like to hear it.
On topic health care is not a magic bullet. When you get old your quality of life declines. And quite frankly getting exams from doctors can be more humiliating than helpful. The retiree burden placed on GM was excessive, and it has contributed to their decline. UAW wanted coverage for its retirees, and management caved. Now GM is paying the health care costs of cancer, an expensive prospect considering how many smokers GM has employed.
Looks like Freddie got P3WND in this thread. Maybe that will keep him and his hysterical, irrationally liberal comments away for a while.
RE: Doug's comments on Canada's health care.
Thanks, Doug! I was about to point out the same thing. For example, I have a Pacific Blue Cross card in my wallet. That's a private insurer.
Also, the Canadian system allows medical professionals and companies to work outside the system. There are a dozen or so doctors in British Columbia who are completely private practice: they don't accept government insurance and only take direct payments from their clients.
Also, there are fully private MRI clinics where I can go if I don't want to wait for the public MRI machines at the hospital.
Canada is a funny case of government-mandated costing and funding of certain health infrastructure items (like hospitals). The doctors are private companies, in most cases. And there are for-profit health care providers working under the current government health-insurance schemes.
It's annoying to hear people bad-mouth Canadian health care without actually understanding how it works.
Not that our system is great, because we do have waiting lists and implicit rationing, but if you really do have an urgent medical need, you jump right to the top of the queue.
The biggest problem is spiraling health costs, mostly labour costs as provincial governments are under pressure from the health care unions and the doctors to increase their wages and fees (respectively). The problem seems to be that they can get fatter paychecks with minimal immigration problems in the U.S., so the U.S. is driving up OUR health care costs.
On a related note, medicare/medicaid in the U.S. might want to investigate reference-based pricing like Canada does to contain costs. It makes some patients angry because the gov't won't pay for the expensive new meds they see on TV, but it will pay for basic meds, some that are already generic in many cases.
Re: The poor retirees would then be stuck with... exactly what the left-wing in this country wants to stick them with: government provided healthcare (namely Medicare).
Medicare is quite popular. At a guess you will find fewer complaints per capita about Medicare than about private insurers. However let's keep one thing in mind here: Medicare doesn't pay everything. Unless you are so poor that you also qualify for Medicaid, you also have to buy a private insurance policy to plug the "Medigap" where Medicare doesn't pay. One thing I'd like to know is if the auto workers' retiree healthcare (for those over 65) is just a Medigap policy or if it replaces Medicare completely. Also, what about people who are under 65 and retired? They can't get Medicare, probably don't qualify for Medicaid, won't be able to buy private insurance unless they are independently wealthy (check out the rates for even a healthy 60 year old sometime) and can't go back to their old jobs either. Any proposals as to how they are to get healthcare if GM and Ford abrogate retiree healthcare contracts? Emergency rooms and bankruptcy courts?
JonF,
The salient point is that most private insurance -- whether Medigap or full insurance for those under age 65 -- involves a sharing of costs. Most workers pay some portion of their health insurance premiums, for example (usually, 25%), and they also pay co-pays for medicine and physician visits. Not with the UAW's plan. UAW members (workers and retirees) paid nothing out of pocket. That was too generous to be sustainable.
On top of that, UAW workers are a notoriously unhealthy cohort, full of overweight drinkers and smokers. Most private health insurers have incentive programs to encourage insureds to exercise, quit smoking, and watch their diets. Apparently the UAW workers didn't have any of that.
There's only so much any viable business can afford to pay people to fail high school, and $70 per hour doesn't work.
If one bothers to read in the London papers on occasion, you will soon learn the problems with gvt provided health care. You will also get a great look at the coming socialist programs Lord Obama would slam down upon us. Gvt is looked upon to solve every problem, and they do so with great success. The latest: Trains are overcrowded, so the transportation ministry simply changed the "official" capacity of the trains. Problem solved, no more overcrowding.
On the crime front, large knives are banned, and recently a chef was arrested for having her knife set in the car with her. Meanwhile burglarers are giving "cautions" and sent upon their way to commit more "victimless" crimes.
I could go on, but hopefully the reader gets the idea...
Megan's confidence on matters about which she is not well informed has an impact on her credibility, as far as I'm concerned. I'm another Canadian with supplementary medical coverage as part of my employment benefits package.
Yes, Travers, but "urgent" is in the eye of the beholder. For the largest part of the most powerful part of the U.S. electorate, Medicare recipients, "urgent" is defined as "what I would like", which is why the chances of real reform of the U.S. system are so remote.
Gee Tom W at 6:00 p.m., I didn't read your Q, but I was able to figure that out just from the business news headlines.
"I'm getting a lot of comments claiming that the real problem is the lack of universal health care in the US."
======
The real problem *was* lack of universal care - I think that's part of the ideological point, if you are intent on seeing this through ideological windshields, while driving full speed. (okay, that was an uncalled for snark).
Even taking your argument, paying for "medigap" insurance wrested from them by hell-bound unions would surly have cost the employer (any employer) a lot less than the whole enchilada.
Tom Friedman, writing in today's NYT:
"And please, spare me the alligator tears about G.M.’s health care costs. Sure, they are outrageous. “But then why did G.M. refuse to lift a finger to support a national health care program when Hillary Clinton was pushing for it?” asks Dan Becker, a top environmental lobbyist."
(I suppose you'll find a quote now of some UAW official who dissed Hillary, too, right?)
As for pensions, GM, I believe, could have defeased 90% of its liability at the top of the market in 1999. I sent them (and Ford) a letter to do so, immediately, to seize the day. I have absolutely no reason to believe that they would even know who I was or if anyone read it. Still, it ranks among my best Pyrrhic efforts of that whole decade. Today, I have no idea where their pension obligations rank among the problems.
By the way, holdfast at 6:20 pm., we do have rationing in American healthcare today. It's just done by insurance companies and by employers who decide how much coverage to by, against ever spiraling healthcare costs.
In short, the current rationing regime is near, past, or at breakdown, on most people's break-down-o-meter.
At the risk of being insufferably preachy in one thread, we need to find a new rationing system.
I propose we follow Arnold Kling, but in ways he wouldn't like. Everything he calls "insulation", relating to everyday medical and some major medical, is what we "socialize" via national health ... "cooperative" in some way(s), cutting out the insurance industry.
What he calls "real insurance", we push off to ... well, the insurance industry, and that part remains ... rationed by individual circumstance, mostly, until such time as the nation is a lot wealthier.
Megan's law of labor relations: whenever management capitulates to overreaching demands, it is always the union's fault.
Two thoughts:
First, adding to Ben and Matthew - the idea that the UAW is solely responsible for these issues just seems to miss the fundamental nature of two-party negotiations. I agree that workers should be agnostic between equally valued NPV of cash, healthcare, job guarantees, etc. The reason the non-salary benefits are so generous (unlike at investment banks, say, with at-will firing but generous cash pay) is because myopic managers thought that healthcare costs 30 years in the future weren't real expenses. Kind of a fundamental error, dontcha think?
Second, although I'm not an expert in Japanese or German health-care- the "government-regulated" nature of the "employer-provided" plans seems salient. Isn't it likely that the per worker costs are still significantly less because of government required health care rationing? Fine, the employers pay for health care-- but they pay for a more inexpensive health care.
The costs of healthcare insurance for U.S. autoworkers are much higher than those for equivalent German or Japanese workers. That is because those governments provide a healthcare system that covers the vast majority of healthcare costs. Supplemental insurance in those countries covers only treatments that are not covered by the public system.
However, in the U.S., company healthcare plans provide coverage for all conditions, making them very expensive. In addition, the U.S. healthcare system is generally inefficient and on average produces worse performance at a higher cost. (There are many reasons for this, but I don't have time to discuss them here)
Why do companies have to provide complete healthcare coverage in the U.S.? Partly this is because the U.S. healthcare insurance system is based on the model from the 1920s. But largely this is because Medicare and Medicaid don't give very good coverage and are underfunded. Because for most procedures Medicare and Medicaid pay hospitals less than it cost them to perform the required procedure, private hospitals tend to try to limit the amount of care they give to these patients. As a result, they get worse care. Naturally, everyone who has the money wants to have health insurance that will allow them to get better care.
There is no easy way to improve U.S. healthcare. But having the government become a single payer with companies paying a tax to pay for the system would be an improvement.
In addition, the U.S. healthcare system is generally inefficient and on average produces worse performance at a higher cost.
Speaking of moratoria (as Megan just was), can we have one on this bit of left-liberal urban folklore?
Matthew Struhaw-
Megan's law of labor relations: whenever management capitulates to overreaching demands, it is always the union's fault.
I agree that it is always the union's fault.
Businesses die every day without the assistance of unions- 'organized labor' simply exacerbates the situation through your overreach.
But, if a "union" is about "employees", shouldn't they bear more responsibility than mgmt. to ensure the continued existence of employment for their "union" members?
Mgmt. has always been diametrically opposed to 'employees'- thus, the "Unions" have obviously have failed their UAW people for the last 25 yrs.
Where was the three year Union initiated strike in 1975 begging GM to stop paying retiree health care benefits because it would affect the future profitability of GM?
Why should GM mgmt. be held to a higher standard than the "union demands"?
I see GM mgmt floating home in their golden parachutes- and the UAW mgmt. quite happy with nylon and a bank account...
"But if we're going to have an honest conversation about these questions..."
- Freddie
It was demonstrated that your first post was wrong on two counts: on the difference between legacy healthcare versus healthcare for current workers, and on the idea that Megan didn't address the human cost of a collapse, when in fact she wrote a long and eloquent post about it. Any now you're complaining about issues of honesty, really?
Commenters like Freddie seem to be missing an extremely important point:
German, Japanese, and Korean automakers are falling over themselves to open plans in America. They are not shuttering their American plants, they are expanding them. They are opening up shop (mostly in the Deep South) and hiring Americans at good wages in places where it's cheap to live.
If these car companies were shifting their production over to Germany, if BMW shut down the South Carolina plant, you'd have a point - but instead, these car companies want to not only increase production in America to meet American demand, they want to increase production in America to export to third countries or to re-import.
So if the lack of socialized medicine is the reason the Big Three can't make cars in this country ...
... why the hell is it that every other car company on earth seems to be able to make plenty of money making cars in this country?
Did anyone find numbers, or is this argument about how GM's health care costs feel to us?
German, Japanese, and Korean automakers are falling over themselves to open plans in America. They are not shuttering their American plants, they are expanding them. They are opening up shop (mostly in the Deep South) and hiring Americans at good wages in places where it's cheap to live.
I wonder what would happen if Michigan became a right-to-work state. Would Granholm be able to attract new manufacturers to the state?
Re: If one bothers to read in the London papers on occasion, you will soon learn the problems with gvt provided health care.
Can we please, please, please send that particular strawman back to Oz? No one, I repeat, no one is proposing anything remotely like the British NHS in this country. Not the most radical Kossack is urging that on us. And while many of the Left look wistfully at Canada's Single Payor system, no one with any power is proposing that system either-- certainly not Barak Obama. so let's retire "socialized medicine" along with "Manahattan projects for energy". "Socialized medicine" is not on the table in the US.
Re: Speaking of moratoria (as Megan just was), can we have one on this bit of left-liberal urban folklore?
It is not folklore that foreign healthcare systems cost less per capita than ours. That's not "folklore" it's hard, cold numbers. As for outcomes, there's room to quibble there, but certainly the health outcomes of the major Western powers (and Japan) are comparable to ours, with any differences being within the margin of error, or due to subjective weighting of what matters most.
I believe you are describing the UK and France. Last time I looked, both Germany and Japan required big employers to buy employees healthcare.
For those looking for numbers, here is a NYT article that says "Health care and pension benefits cost them $1,000 for each vehicle they sell, they say, compared with a few hundred dollars for companies like Toyota, Honda and Nissan."
JonF,
It is not folklore that foreign healthcare systems cost less per capita than ours.
This claim doesn't even make sense. A "healthcare system" is not a fixed amount of some commodity, like a pound of gold, but a set of products and services that varies dramatically between different countries. It therefore makes no sense to say that the healthcare system of one country "costs" less per capita than the healthcare system of another, because you're not comparing the same thing. The U.S. certainly spends more on health care than other countries, but it consumes more health care too.
As for outcomes, there's room to quibble there, but certainly the health outcomes of the major Western powers (and Japan) are comparable to ours,
The only relevant "health outcomes" here are outcomes that are attributable to health care (rather than "outcomes" attributable to any of the vast array of socioeconomic, cultural and environmental variables that influence health). If you seriously think you have data showing that the "outcomes" of the U.S. health care system are inferior to those of other nations, either in total or on a cost-benefit basis, please produce it.
It's interesting to see how comment threads can sometimes get away from the topic of the initial post. The health care costs for GM, particularly the post-retirement benefits, are a major factor in the company's problems.
Instead of a cash infusion, perhaps the US government might want to consider a different bail out. The employees who worked and negotiated those post-retirement benefits are the ones who will be hurt the most - whether you think they are deserved or not.
Would it be easier, and take fewer taxpayer dollars, if the US government would just take over responsibility for those benefits for the people currently covered by them - rather than giving money to a company that has demonstrated a poor ability to forecast future automobile markets?
The union would have to give a little, and do some renegotiation to get rid of those benefits for current employees (although it might require some grandfathering for those employees closest to retirement age).
PS - Mixner, there is a lot of information about health outcomes, including some basic information on morbidity and mortality. The US is similar to the rest of the Western nations, but when you look at health care spending per capita, you might expect more for the money you spend as a nation. If you were looking at a private business, you'd be wondering what it would take to improve productivity.
Sorry to pile on, Freddie, but I just love this quote too much: "Thousands and thousands of people will be cast into financial crisis and uncertainty by exterminating the Big Three. The human cost will be incalculable." Yes, thousands = infinity. About as insightful as the rest of your comments.
Mixner, there is a lot of information about health outcomes, including some basic information on morbidity and mortality. The US is similar to the rest of the Western nations,
You don't seem to have read my post very carefully. Morbidity and mortality data is relevant to the question only to the extent that it measures outcomes of the health care system, rather than simply aggregate measures of health and life expectancy, which are the "outcome" of all sorts of other variables in addition to health care.
If the health care system of Country A is twice as good as the health care system of Country B at treating heart disease, but the rate of heart disease is three times as high in Country A as in Country B (due to factors like diet, exercise and smoking), then Country A will likely have higher heart disease morbidity and mortality rates than Country B even though its health care system is better at treating the disease.
This is why claims about the quality of a health care system based on aggregate health statistics (life expectancy, infant mortality rate, etc.) that do not distinguish the effects of the health care system from the effects of all the other factors that influence health are so unwarranted.
The short version of why the Domestics are bankrupt, particularly GM:
1) refusal to deal with market share loss; GM still has a ton of brands and at least twice as many dealers as Toyota. This made sense in 1960, when GM made up 50% of the US auto market. It does not make sense in 2008, when it has to slap major cash on the hood to stay at 19%.
1a) Brand structure is broken; each dealer wants a full line up of cars to peddle, which leads to massive amounts of badge engineering (relabeling the same vehicle multiple times). This is a waste of resources and creates a muddle for marketers.
2) Labor costs. This isn't such a big deal on SUVs and trucks, given their profit margins. But it is a major deal in sedans and other small cars, where the profit margin for a compact or subcompact is $500 or so per vehicle. This forced GM to make substandard cars and sedans to cut the cost down to a competitive level. The had to have these cars to meet CAFE standards, which measures the entirety of a companies portfolio. Hence, the bad quality, massive fleet sales, and uninspired designs that made GM cars undesirable, as they had crappy resale value and tending to blow up on owners.
3) Management refused to deal with any of these problems in a timely manner, and instead chose to rely on the major profit margins of SUVS and trucks, very loose credit terms, and lots of major sales.
3a) Reliance on SUVS and Trucks put them in a very nasty spot when gas prices skyrocketed as the public no longer wanted to drive behemoths. Bye bye profit margins.
3b) Reliance on anyone with a pulse financing set them up for truly horrifying losses when the credit market seized up. The credit crisis took GM from 1 billion a month in losses to 3 billion a month. As of two months ago, GM was on schedule to last 6-12 more months. Now they are looking at a very nasty Christmas.
3c) Sales: Customers are trained to wait for the next massive sale to buy; good luck making any money as no one is willing to pay anywhere near MSRP on the vehicles.
Sorry to go on so long, but basically the D3 got caught with their pants down because they were riding a variety of economic trends to avoid making the hard choices they had to make. This isn't a sudden change that caught them unawares; its them being (finally) revealed as fundamentally sick companies that need to go through bankruptcy to emerge as healthy companies. Slapping a few bill on them to get them well isn't going to cut it. There needs to be major, major strings attached to any bailout. Everyone over there has their piece of the pie they want to protect, and just giving them a respite won't cut the cheese, at least if you want a long term healthy domestic auto industry.
Chrysler: dead.
GM: Needs a Night of the Long Knives and some very brutal cuts to dealers and workers.
Ford: The only company that you can really argue just needs some help to get through, because the Ford family finally figured out that some heavy lifting had to be done and got Alan Mulally on the case a few years ago. Red Ink Rick Wagoner needs to get his head on a pike before GM has a prayer.
The thing that concerns me is not only that people will lose their jobs as a result of The Big 3 going under. Of course I am concerned about that, but I am concerned that the criteria for a bailout is so dangerously vague. When is the government supposed to step in vs. allow people to deal with the consequences of their actions? The economy is cracking right now, and I know everyone is suffering. But the liberal illuminati like Pelosi just want to spread the Wall Street bailout to the auto industry and where to after that? I need a textbook definition of a proper bailout or we'll see this repeating itself a hundred times over and the government will own all privatized business.
Mixner is exactly right. For example, Japan has a lower average morbidity rate than that in the US ... but, that rate is higher than the average for Japanese people living in the US. I could go on. Most of these comparison studies are quite bad (though, in fairness, measuring the true effect of a healthcare system is very difficult).
Also, one of the reasons all the socialized systems look so good cost-wise is that they demand Pharmas sell them drugs at slightly above marginal cost. So, the people covering the astronomical burden of drug R&D are ... you guessed it ... Americans. Talk about a free-rider problem! The concern is: if the US follows suit with Canada, etc., the unintended consequence is likely to be a marked decrease in drug innovation.
Megan,
Your post is disingenuous to the point you're bordering on lying (as regardless the relationship between American free-for-all health care vs Japan/Germany). No , Germany and Japan do not have socialized medicine. That does not mean, as in the US, they sit by idly and watch health insurance or lack thereof destroy their industrial base. Japanese health care is highly regulated, requiring full coverage while Germany, while decentralized, accomplishes the same high standard of coverage through a different approach involving a much higher level of government involvement that the US. The American approach is designed (if you can call it that) to enrich pharmaceutical companies and insurance conglomerates - not to insure the largest number of people possible with the best care within reason (knee transplant notwithstanding). Our health care system is a joke protected by a Libertarian/Republican ideology that has led to a collapse of our manufacturing base. Unions and their demands have hurt - yes - but health care costs have hurt far more. And, Liber-tards, I think, deserve a lot of the blame.
Why have the Big Three provided extremely expensive health benefits for retirees for decades, when there was a really very generous government program available?
I have heard it argued that generous defined-benefit pensions got started as a way of working around WWII-era wage and price controls. Auto manufacturers couldn't compete for labor on salary, so they did on benefits instead. From there, a lot of it is general stickiness of wages. Powerful unions make them even stickier than usual.
"This is why claims about the quality of a health care system based on aggregate health statistics (life expectancy, infant mortality rate, etc.) that do not distinguish the effects of the health care system from the effects of all the other factors that influence health are so unwarranted."
Country A might have a lower rate of a disease because of traditional lifestyles (diet, exercise, etc.), but also because of active promotion of better choices. If a population is less likely to have heart disease, particularly at a young age, is that not a better outcome?
Country B may be able to treat a disease better, but if the treatment is not available to everyone because of cost, what does that say about the health-care system? If I can't afford the cancer drug, does it matter if it will cure me? Death is death, no matter what the reason - poor lifestyle choices in the first place, or the lack of resources to pay for the treatment - the impact is the same on the mortality rate. The statistics don't control for that factor either.
There are many influences on health, but if the people in your country die younger and are less healthy than people in other similar countries, it is not something that should be so easily dismissed because of the "other factors that influence health".
A high quality health care system will do a lot of work on preventing illness and injury in order to reduce incidence rates, in addition to having the best treatment possible available for those who need it.
If you are running a business, it is the profitability that ultimately determines success - the bottom line. It is better to avoid the problems in the first place, rather than deal with the usually higher cost of fixing them. (Of course, for some auto manufactures they also profit from fixing the problems associated with equipment failing - it doesn't work the same for any health-care system, government or private.)
Basing the quality of the health-care system only on how well it fixes the problem for some of the people isn't really examining the bottom line. When it comes to health, the bottom line is how healthy the population is and how long they live - sort of like morbidity and mortality.
Doug,
Country A might have a lower rate of a disease because of traditional lifestyles (diet, exercise, etc.), but also because of active promotion of better choices. If a population is less likely to have heart disease, particularly at a young age, is that not a better outcome?
Of course less heart disease is a better outcome. But you can't tell anything about how good a health care system is at diagnosing or treating heart disease simply by looking at aggregate morbidity and mortality data for the disease, because that data is the "outcome" of so many other factors in addition to the health care system. I really don't think this point is hard to understand.
Country B may be able to treat a disease better, but if the treatment is not available to everyone because of cost, what does that say about the health-care system?
Very little.
There are many influences on health, but if the people in your country die younger and are less healthy than people in other similar countries, it is not something that should be so easily dismissed because of the "other factors that influence health".
No one is suggesting it should be dismissed. The point is that it may have little or nothing to do with differences between the health care systems of your country and the other countries. In fact, we have a lot of evidence that differences in health care play only a small role in differences in health and life expectancy between different nations. Social, cultural and environmental factors--diet, exercise, smoking rates, alcohol rates, crime rates, accident rates, climate, pollution, etc. seem to be much more important than health care.
Is it me, or is Megan promoting Canadian style universal health care?
She's saying, basically, that Medicare doesn't fix the problem of retiree benefits because, unlike Canada, private insurance isn't illegal here. So if we abolish the for-profit system, I suppose that solves the problem, right?
I mean, does it really matter that universal coverage isn't the reason for German and Japanese advantages? I don't see how that really figures into the argument as to whether certain systems lower or eliminate the health care costs of businesses.
The problems of the automobile industry go way, way, way back to the 1950s, though, when they insisted on quota systems for production over quality control and management capitulated to labor because management didn't think it had anything to lose by capitulating. They could just increase the price of their highly demanded product! This created the corporate culture that allowed for really, really bad long-term labor agreements in Detroit. That's nothing new, though. I just don't see how that's all labor's fault, Fletch. Management could have said, "Seriously dudes..."
Re: This claim doesn't even make sense.
Did I phrase it poorly, or are you just engaging in sematic pettifoggery to avoid having to admit that I am right.
Here's an objective fact: All First World countries spend less per capita than the US does on healthcare.
Re: If you seriously think you have data showing that the "outcomes" of the U.S. health care system are inferior to
I am not going to say that because there's a lot of subjectivity about what makes for "good" healthcare outcomes. Different people may value different results. I will however say that there's no evidence of massive disatisfaction with healthcare in other countries. (Griping and quibbling doesn't count-- I suspect human beings will gripe and quibble in Heaven).
Re: Also, one of the reasons all the socialized systems look so good cost-wise is that they demand Pharmas sell them drugs at slightly above marginal cost.
You do realize that that is exactly the result that a textbook-perfect free market would also lead to.
Re: The point is that it may have little or nothing to do with differences between the health care systems of your country and the other countries.
If this is true, then why should it matter if we do modify our healthcare system? Per your principle here, we could get the same results for less money.
More to the point--all the high volume, mainstream 'Japanese' cars, the Camrys, Accords, Civics, Altimas, Corollas, etc that are killing the Big 3 are built in the U.S. by U.S. workers whose health care is provided for by Honda, Toyota, et al. The health care system in Japan has nothing to do with it.
JonF: "You do realize that that is exactly the result that a textbook-perfect free market would also lead to. "
Nonsense, this is the result of a monopsony.
"If this is true, then why should it matter if we do modify our healthcare system? Per your principle here, we could get the same results for less money."
Indeed, we very likely could get the same medical outcomes even if we cut health care delivered by 30-50%. Robin Hansen makes a very good case for this.
http://www.cato-unbound.org/2007/09/10/robin-hanson/cut-medicine-in-half/
However, I don't hear anyone pushing socialized medicine actually proposing to reduce the health care delivered to consumers. In fact, they propose increasing it by getting healthy people to waste time on pointless disease screenings.
Ninja Zombie,
I have a sister-in-law who is alive because a "pointless disease screening" caught a brain tumor early enough for radiation treatment. Ditto with my brother-in-law, except that he had prostate cancer. One of my brothers had precancerous polyps removed after a colonoscopy. I respectfully submit that you and the other posters who think preventive medicine is "pointless" don't know what you're talking about.
Nathan:
You think the U.S. healthcare system is a product of libertarian ideology?
You've heard of the HMO Act, right? Yeesh.
Megan,
Commenter Doug, earlier: It would be nice if commentators from other countries would actually have the facts about Canada's health-care system, when making arguments.
Exactly.
Commenter Matthew Struhar, earlier: She's saying, basically, that Medicare doesn't fix the problem of retiree benefits because, unlike Canada, private insurance isn't illegal here.
Um, as Doug illustrated above, private insurance isn't illegal in Canada, either. And lots of employees working many companies in Canada have obtained coverage better than the government provides. Others still, like me, who have no coverage through work, purchase private health coverage on their own.
Read the post. Said what I said.
Look, Megan confronts the economic hardship of all these people that any honest person has only one word for: glee.
Yes, Freddie, every time I go home and see my family struggling to make ends meet, I think "Awesome!" Note that *the people on the thread from Western NY*, as well as any number from same who have emailed me, understand *exactly* what I'm saying. I really think you need to look hard back at what I've written, let your temper cool down, and then come back and tell me where you think I'm effing *happy* that industrial slowdowns suck.
As for the Canadians, I didn't err. The UAW doesn't provide gap insurance; it covers the same things that are covered by Medicare. As you all know, that practice is strongly, strongly discouraged by the Canadian system through various institutional setups, to the extent that you can actually count on two hands the numbers of doctors who provide private services in a fairly large province.
Unless the US adopts similar controls for its systems, there's nothing to stop workers from negotiating for better, duplicate health insurance. I'm not sure why everyone swashbuckled in here asserting my error, since the point of my post--that the UAW could still vote for duplicate coverage--is clearly not at odds with your experience of the Canadian system, where duplicate coverage was, last time I looked, nearly impossible to obtain for anyone except the very wealthy in a few provinces.
To Tom Wilkinson at GM
If you are the real Tom Wilkinson at GM I am surprised to see you here.
Still, If all GM needs is a bridge loan, why don't you offer your employees stock in exchange for compensation reductions for three years. I wonder how many GM employees would consider that a good investment.
I know people at GM. I like people at GM. I think they have made some good strides given the structural constraints they face.
But I would have GM declare bankruptcy and restructure the company rather then take money from the government and deal with the strings that come with the money.
And national health insurance will not save GM. You currently hear GM employees complain about paying deductibles for health insurance, a luxury that most firms had ended many years ago. GM employees for too long demanded a gold plated benefits package that was far beyond what most employees receive in tis country.
Megan is right. Even if we had national health insurance, it is unlikely to be anywhere near as generous as what GM offers. Their is little reason to think that UAW workers would demand to keep their superior private plan.
And I would not want to give government handouts to GM to help fund a benefits package that is vastly more generous then what most people in this country can ever hope to enjoy. That kind of welfare is beyond justification.
And I know that GM would use national health insurance as a base and then would probably offer employees supplemental plans. But that would still mean that GM is using government money to support a very generous benefits package
To put it another way: GM is not going broke buying expensive eyeglasses and new dentures for its retirees.
Insurance costs skyrocketed after Bush was elected in 2000. GM's gold plated health care was a lot cheaper in the 90's. Health care cost are not the only thing killing American businesses (and not just manufacturers) but it is a large, large factor.
If the Republican party does not support a bailout of GM, they are finished as a national party for a generation.
Good job, Freddie! On point or not--and I think it probably was--it definitely needed saying.
OK, and good job all? I haven't had my coffee yet for the day and am super underslept. But this seems like a thread, now that I see that it continues past Freddie's first post, that had a lot of good points in it.
Tom:
I have a finance background but am not an expert on GM. I will just state that the following, from the 10Q you cite, is scary, and doesn't seem to support the turnaround you argue for:
In the nine months ended September 30, 2008, we used $9.7 billion of cash in operations and our liquidity position deteriorated by $11.1 billion. Our cash flow deteriorated primarily due to our significant operating loss, increases in inventory balances of $2.0 billion and a decrease in accounts payable and accruals of $2.5 billion.
We have taken far reaching actions to restructure our U.S. business, but the effect of current global economic and credit market conditions on the automotive industry require that we obtain additional near-term liquidity support. Based on our estimated cash requirements through December 31, 2009, we do not expect our operations to generate sufficient cash flow to fund our obligations as they come due, and we do not currently have other traditional sources of liquidity available to fund these obligations.
Stan: some disease screening is useful, some is not. We already do most of the useful disease screening.
A disease screening is useful only if the cost of false positives does not outweigh the cost of diseases missed. Biopsies can harm/kill people, so unnecessary biopsies are a bad thing.
Your anecdotes are not a substitute for careful statistics.
JonF,
Did I phrase it poorly, or are you just engaging in sematic pettifoggery to avoid having to admit that I am right.
You're not right and it's not a quibble. Referring to the "cost" of different health care systems, as if you're comparing the same thing in different countries, betrays a basic conceptual error in your understanding of the issue. It's like comparing the "cost" of housing in different places without taking into account differences in the size and quality of the housing.
Here's an objective fact: All First World countries spend less per capita than the US does on healthcare.
Again, so what? It's probably also an objective fact that all first world countries spend less per capita than the US on cars. Does that mean the US is spending "too much" on cars or that the US "car system" is less efficient or in some other way inferior to that of other countries? Of course not.
I am not going to say that because there's a lot of subjectivity about what makes for "good" healthcare outcomes. Different people may value different results.
Yes, that's another part of the problem. But you don't even have a rough idea of how the "outcomes" of the U.S. health care system compare with those of the health care systems of other countries. As I have explained, aggregate health statistics are meaningless for this purpose, because they reflect the effects all sorts of other variables that have major effects on health and longevity, like diet and exercise.
I will however say that there's no evidence of massive disatisfaction with healthcare in other countries.
Mass public protests, lawsuits pursued to the highest national courts, and constant political demands for more health care spending are not evidence of massive dissatisfaction?
Re: The point is that it may have little or nothing to do with differences between the health care systems of your country and the other countries. If this is true, then why should it matter if we do modify our healthcare system?
If the modification significantly reduced individual freedom and market choice with little or no benefit to public health, it would probably be a bad idea.
Those people who dismiss the well-documented fact that the US spends more on healthcare than most other countries (or "consumes more" or whatever phrase you think best describes total healthcare expenditures divided by the total population) with no better outcomes by arguing that the other countries have a higher level of baseline health than ours are not arguing in good faith. They are creating a hypothetical to respond to a real-world phenomenon, and they should be called on it.
Fine, you theoretically could have a situation where Country A provided better healthcare than Country B, but saw worse outcomes because the population started off with a much higher risk of various ailments. Please apply that to the real world now and cite evidence that France, Germany, the UK, etc. do in fact have a much higher level of baseline health than does the US. Please do not confine your observations to the Japanese, who (generally) do not eat a Western diet or live a Western lifestyle.
Joe,
Here is a good example - please show me how healhcare affects obesity in society.
www.forbes.com/forbeslife/2007/02/07/worlds-fattest-countries-forbeslife-cx_ls_0208worldfat_2.html
9. United States 74.1
28. United Kingdom 63.8
43. Germany 60.1
128. France 40.1
Our obesity rate is almost double France's and 10pts greater than both the UK and Germany.
Obesity impacts a lot of things, including morbidity and mortality, but is basically independent of the healthcare system.
Another Canadian here. This morning I've just been dealing with my private health insurer, Pacific Blue Cross, with whom I have both dental and "extended" benefits -- most of which is paid for by my employer. Megan says that few Canadian doctors "provide private services"; in fact, all family doctors do, in the sense that they are in business for themselves. Perhaps Megan means that few doctors provide basic services outside the provincial health-care plans, which is true.
http://www.cmaj.ca/cgi/content/full/164/6/825?maxtoshow=&HITS=10&hits=10&RESULTFORMAT=&fulltext=illegality+of+private+health+care&searchid=1141074978157_4633&FIRSTINDEX=0&volume=164&issue=6&journalcode=cmaj
For anyone wanting to understand the basics of health care in Canada, here's a good place to start:
http://www.ourfuture.org/blog-entry/mythbusting-canadian-health-care-part-i
The following list reflects the percentage of overweight adults aged 15 and over. These are individuals who have individual body mass indexes, which measures weight relative to height, greater than or equal to 25. Obese is defined as having a BMI greater than or equal to 30.
Sorry, this doesn't come close to cutting it. First, that's a list of overweight rankings. The statistical evidence linking the "overweight" category of BMI to increased mortality and health risks is exceedingly thin -- in fact, much of it points the OTHER way (i.e., people in the "overweight" category may actually be at lower risk of illness and and especially death than people in the "normal" category).
But in any event, even if this did show that the American population had ONE increased risk factor, it does not address the possibility that the negative health effects might be balanced out by yet another risk factor where Europeans are less healthy. Smoking rates come to mind (and in fact, these actually show some inverse correlation with obesity rates!). That's why this type of analysis is completely illegitimate. You need to look at groups of Americans and Europeans who receive normalized healthcare levels (perhaps ex pats?) and see if one group or the other is intrinsically more healthy than the other. I would be shocked if this was the case, but I remain willing to be convinced.
Joe,
That is the overweight AND obese rankings combined.
Here is the obesity data:
www.nationmaster.com/graph/hea_obe-health-obesity
United States: 30.6%
United Kingdom: 23%
Germany: 12.9%
France: 9.4%
Here is the BMI 30+ category form 2003. We're 3X France, 2.5X Germany, and 1.8X the UK.
But to your last point, you assume all lifestyle, genetic and age impacts aren't insignificant by themselves, but that they cancel each other out.
That is a bold claim and one I've never seen evidence for. We know for a fact that Americans are heavier and more sedentary than our European counterparts. This undoubtedly affects morbidity and mortality. That there are other issues that may run the other way doesn't negate that.
Show me the studies which show the US's cultural, genetic or demographic makeup should lead to higher health outcomes given a similar healthcare level.
Joe,
Those people who dismiss the well-documented fact that the US spends more on healthcare than most other countries (or "consumes more" or whatever phrase you think best describes total healthcare expenditures divided by the total population) with no better outcomes
It is a well-documented fact that the US spends more on healthcare than most other countries (or all of them, even). It is most definitely NOT a well-documented fact that the "outcomes" of the US health care system are "no better" than those of other countries. This "no better outcomes" meme is a piece of left-liberal mythology that is uncritically repeated by credulous proponents of drastic health care reform but that has no serious factual basis.
by arguing that the other countries have a higher level of baseline health than ours are not arguing in good faith. They are creating a hypothetical to respond to a real-world phenomenon, and they should be called on it.
There's no "hypothetical" about it. There is overwhelming evidence that factors other than health care, such as diet, exercise, smoking rates, alcohol use rates, crime rates, accident rates, pollution levels, etc., etc. have a very strong effect on the health and longevity of national populations. You therefore cannot rate "health care system outcomes" on the basis of aggregate health and longevity data. It's meaningless.
Please apply that to the real world now and cite evidence that France, Germany, the UK, etc. do in fact have a much higher level of baseline health than does the US. Please do not confine your observations to the Japanese, who (generally) do not eat a Western diet or live a Western lifestyle.
I don't even know what "level of baseline health" is supposed to mean. What is it, and how do you propose to measure it?
You need to look at groups of Americans and Europeans who receive normalized healthcare levels (perhaps ex pats?) and see if one group or the other is intrinsically more healthy than the other.
It's been done (although, again, I'm not sure what "intrinsically more healthy" is supposed to mean). For example, a British study from a year or so ago found that older American are generally less healthy than British men in the same age range despite receiving more health care services. The lead author of the study suggested that the main cause of the difference was social factors.
Health care costs are sky high here for various reason, including that it is very costly to treat an overweight nation. Diabetes is extremely expensive. Japanese rates of obesity are a fraction of the US's, and this is not a matter of the Japanese system promoting health or a lack of health care access in the US making people fat.
Japanese-Americans have similar lifespans as Japanese citizens. Also, when things were going well in the US auto industry, workers had great insurance, yet Michigan was always among the fattest states outside the South.
Another important point some are missing; the Japanese/Germans have the relative advantage with regard to health costs that has little to do with the health systems of Japan or German. It has to do with heath care costs of their American plants vs. the health care costs of GM, Ford, Chrysler. Because Honda, Toyota and BMW employ younger, healthier workers and have very few retirees, their health bills are small in comparison. The benefits also aren't dictated in part by union practices.
Mixner and Skullberg--
You prove my point. The way these arguments go is that someone says "the US spends more per capita on health care than Country X," yet there is not an appreciable difference in mortality rates, illness, etc. Then someone else says "well, you're not considering social factors like obesity, smoking, etc." That's all fine and good. The problem is that usually the second person goes on to say "show me what would happen if these social factors were normalized." THAT is what is illegitimate. YOU are the one who is trying to rebut the facially persuasive claim that the US spends a lot more on healthcare without significant benefits. YOU are the one who needs to provide evidence to support your theory. And pointing to a single factor like obesity that may or may not correlate with mortality and health effects (but ignoring other factors that point the other way) and saying "Aha! I win!" won't cut it either. You need to produce something that suggests that healthcare being equal, Europeans have lower mortality rates and greater longevity than do Americans.
(Mixner: The study you allude to would go towards demonstrating that, and I'd be interested to see it.)
Joe,
YOU are the one who is trying to rebut the facially persuasive claim that the US spends a lot more on healthcare without significant benefits.
This is just utter nonsense. You have produced no evidence whatsoever regarding the "benefits" of the health care systems of different nations. How good is the U.S. health care system at preventing, diagnosing and treating heart disease in comparison to the health care systems of Canada, Germany, France, Australia, or any other country? Do you have any evidence on this question or don't you? How about cancer? Hypertension? Diabetes? Stroke? Asthma? Hepatitis? AIDS? Physical injuries like gunshot wounds and broken bones? Or any of the countless other diseases and disorders that afflict human beings? Where is your evidence, Joe?
By the way, I'm pretty sure "Joe" is our old friend Scent of Violets. The bombastic writing style is pretty much a giveaway.
Doug / Tavers - Really? So you can get a private hip replacement in Canada if you need one? I thought the Canada Health Act would bar that, but would like to be contradicted.
I lived Canadian healthcare (BC variety) for the first 28 years of my life - I think I am familiar with it. My mother almost did not survive it, over a very routine procedure that was procrastinated a little too much.
Amicus - I thought that my earlier post acknowledged that there will always be rationing based on cost and an ability to pay - which is preferable to having the government do a one-size fits all approach. Also, since in Canada money can't get your critical healthcare for major problems (unless you use your money to go to the US or India), it becomes a game of influence, who you know, who you blow etc - just like the USSR!
Re: If the modification significantly reduced individual freedom and market choice with little or no benefit to public health, it would probably be a bad idea.
If something were being seriously proposed that would limit personal freedom and market choice I would agree with you. But the proposals being floated would do the opposite-- people would have MORE choices and MORE freedom not less and fewer!
Holdfast,
Yes, in Canada it is possible for the private delivery of health care services, thanks to a ruling by the Supreme Court in the past few years in the case of Chaoulli and Zeliotis v. Quebec. There are some private clinics, mostly Quebec and British Columbia. How plentiful the private providers will become is a great unknown. Those providers work outside the current system. I'm not sure how successful they will be, but it will be interesting over the next several years to see if they become more prevalent. I'm not sure if any are providing hip replacements.
As for the comment about the influence getting you somewhere, who would be able to do that? Can a physician get a friend in more quickly if they work on it? Possibly. A politician - maybe, but if the premier of a province was ever found out to be using influence to get a family member, friend, or campaign donor in for a surgery more quickly it would likely be a very major scandal.
The comparison to the USSR is demonstrates you don't care about the facts, just dogma.
As for Megan, you actually did err in the statement when linking it to the Canadian system:
"Unless you actually do as Canada has done, and make private health plans illegal, there is nothing in a system of universal health care that prevents employees from asking for more generous benefits than the government provides. Which means that moving to universal health care will do exactly nothing."
Private health plans are not illegal. Also, no union in Canada bargains to get health benefits that replace those already provided through the government (taxpayer) funded system. The benefits are for the items not covered by the government system - prescription drugs, eye care, dental care, etc.
The UAW may indeed have asked for more generous benefits than provided by US Medicare, but the comparison to the Canadian system is misguided.
The cost of those benefits to Canadian companies is significantly less - examine the health care benefits for the Canadian Auto Workers as compared to the UAW ones as an appropriate example.
The post makes it sound as though the auto companies for decades provided retiree health care that would have been provided by the government anyway. I don't believe this is correct. Medicare's been primary for these plans, and the auto companies' costs have come from providing pre-65 coverage not covered under Medicare and prescription drug coverage not covered by Medicare until recently.
The benefits were originally negotiated decades ago when the cost was much lower, so neither side anticipated the rising value of the promise for future retirees. Also, when you question the logic of the benefits, remember there's a tax incentive to provide compensation through health care because the benefit is not taxed to the employee and is deducted by the employer. Finally, although expensive, the plans provided a way for the companies to facilitate relatively early retirement which has business justifications as well.