Health Care: The Real Crisis

Health Care: The Real Crisis
Jonathan Tasini
December 03, 2004


George Bush is beginning to frame his Social Security reform agenda as a way
to help workers. That leaves Democrats the opportunity to reframe the debate
about the best way to do so. Jonathan Tasini argues what will help
workers—and American employers—is a single-payer health plan.

Jonathan Tasini is president of the Economic Future Group and writes his
"Working In America" columns for TomPaine.com on an occasional basis.

So, the Bush administration wants to help workers, make business more
competitive and ensure a nice, comfortable retirement. If that is true, why
is the conversation about privatizing Social Security, instead of about
single-payer health care? Why are we debating a crisis that doesn’t exist
(the “insolvency” of Social Security) instead of a crisis that clearly
exists: the scandalous nature of our health care system?

It's easy to show that turning Social Security over to the stock market
speculators is a dumb, ideologically driven idea whose true costs are being
hidden (surprise!) by the administration (see the Center for Economic and
Policy Research and the Institute for America's Future). What's more fun is
to argue, plausibly, that we can do a lot more for business, workers and
retirees by enacting a national health plan.

Here’s how the math works. This country will spend $1.8 trillion on health
care in 2004, one-seventh of the entire gross domestic product—tops in the
world; some estimates see that figure hitting 2.75 trillion by 2010. I know
most people like to think that we live in a private insurance world, but
actually 60 percent of health insurance money is already a public expense,
paid by tax payers in the form of Medicare and Medicaid.

But 20 percent of that mammoth number is paid by business, so that’s a nice
round $360 billion. According to Physicians for a National Health Program ,
a single-payer system could be financed by a 7 percent payroll tax and a 2
percent income tax (with the income tax part potentially progressive). With
one bold stroke, a single-payer system would do more to help the bottom line
of companies than any tax break or so-called “free trade” agreement.

An Obvious Win-Win

Take General Motors. It spends 15 percent of its revenue on health care
costs: 4.8 billion in 2003 and roughly $5.1 billion in 2004. Its future
obligations for employee and retiree health care is more than $60 billion.
Want to translate that into competitiveness? A GM car costs $1,400 more just
because of its health care costs. If you figure, very roughly, that, right
now, health care costs are rising 7 percent a year, under a single-payer
system, GM would cut its health care costs in half. Hello?

As for the much-praised small business community, it would benefit even more
from single-payer health care. Small businesses often pay 20 to 25 percent
of revenues to pay for health care plans—and, then, are often forced to drop
the coverage because they claim it's too expensive.

And how about single-payer being an instant effective pay raise for millions
of Americans? Every union negotiating a collective bargaining agreement
could potentially win well-deserved pay hikes for workers whose wages have
been falling behind inflation ; right now, every union’s main battle is
fighting just to keep health care coverage in place. And individuals who are
not lucky enough to have employer-based health care and who have been
shelling out thousands of dollars in premiums for a bare-bones health plan
(which encourages people never to get sick), would pocket a sizable chunk of
change with a single-payer plan. Finally, by saving money for them on
prescription drugs, among other benefits, single-payer would also be a
guaranteed help to retirees—not the riverboat gamble a privatized Social
Security system would be. Oh, I forgot: seniors won’t need that money
because they will be kicking back and drinking cocktails thanks to their
“private investment accounts” just bulging from huge profits they will have
made from their stock-market picks.

Now, it’s pretty obvious why the administration is making certain choices.
The pharmaceutical industry has been the single most profitable industry in
the past decade. And the financial services industry can barely restrain its
orgasmic delight at the thought of the hundreds of billions of dollars that
will wash into the market if Social Security is turned over to the Street.
Both industries, along with the health care companies, have showered tens of
millions of dollars in political campaign contributions on the Republicans
(and, to be fair, have written quite a few checks to Democrats, too).

Ways Forward

So, though the positive aspects of single-payer are nothing new, two things
strike me as worth pointing out today. First, this is a ripe area for a new,
concerted effort at shareholder activism. The argument is simple: companies
who don’t advocate for a single-payer system are endangering share-holder
value, throwing money into a system that is dragging down profits and
competitiveness. And, in particular, it’s the huge public employee pension
funds, representing hundreds of thousands of current and retired workers,
who have a significant financial interest in seeing the system changed; the
California Public Employees Retirement System alone has $177 billion.

Second, progressives are falling into a familiar trap. We’re arguing on the
wrong turf. As long as we keep arguing about the Social Security “crisis,”
we’re losing. The Republicans, their allies and too many Democrats have
framed the debate as “fixing” Social Security. When we argue that Social
Security “isn’t broken,” we are playing inside their debate terms—and
losing.

We have to shift the debate. We need to say that the real issue for
Americans is that we want a society where everyone is in good health, a
society where every person can have the opportunity to succeed and that that
opportunity comes with the financial security and peace of mind that only a
single-payer system can deliver. Wouldn’t it be better, we need to ask, if,
instead of choosing the drug and insurances companies, we would stand for
our families, for health security, for the wisest investment the government
can make towards our collective well-being? And, finally, wouldn't it be
better to stand for the stability and competitiveness of American business,
from big companies all the way to the small businesses everywhere who would
like to have healthy, productive workers?