Labor Advocate Online
They’re Still Not In
Business For Our Health
by Bill Onasch
As this is written in July, President Obama is said to be looking at an October decision on health care “reform.” There are several competing “plans” in congress with new proposals and publicity stunts daily. Likely the wheeling and dealing will go down to the final hour. While I will comment on some of these they will not be my focus. I want to step back from the 24x7 news cycle sound bites, and the frenzied bloggers and twitters working in “real time,” and take a fresh look at the underlying forces creating today’s health care crisis. I have no interest in trying to influence the debate among those allowed “at the table”–while some may be worse than others all officially sanctioned proposals are bad news. I remain an advocate of the popular plan that has been banned from the table–single-payer. And I will urge a revival of class struggle strategy and tactics as the only way to win this–and many other–urgently needed reforms.
Ten years ago I wrote an article for Labor Standard entitled They’re Not in Business For Our Health, with the subhead Corporate Stranglehold on Health Care Defies Piecemeal Reform. Except for changes in statistics, that history and description of American health care unfortunately stands up pretty well today.
The stats changes have mainly been in the wrong direction. In 1999 the USA ranked 25th among nations in average life span--just behind Costa Rica. The latest UN figures place us 38th in life expectancy at birth–just behind Cuba.
Forty-four million Americans had no health care coverage ten years ago. Today it’s at least 46 million and some think that the rapid job loss of the Great Recession has swollen that number closer to 48 million.
We noted then that the percentage of GDP spent on health care had doubled since 1970 to 14.2. Last year that figure stood at 17 percent–by far the highest in the world
I wrote then with some enthusiasm about a fresh effort to transform U.S. health care along the lines of what had been won through struggle launched by the labor party in Canada. While not as thorough going as the socialized medicine established by British workers in 1948, what became known in this country as “single-payer” would sweep away the insurance robber barons controlling access to health care. Leveraging the enormous coverage base of 300+-million people could also force a roll back of outrageous doctor, hospital, dental, and prescription charges.
This revival of an earlier stalled single-payer movement in the late Eighties-early-Nineties–then coopted by the Clinton health care reform fiasco–came out of the fledgling Labor Party’s second convention. With over 1400 in attendance, the delegates at that 1998 gathering in Pittsburgh adopted Just Health Care as the party’s signature campaign. The plan provided:
• All U.S. residents entitled to medical and dental services and prescription medicines and devices–at no out of pocket cost.
• Absolute freedom to choose your own doctor.
Because those involved in insurance administrative work would need to find new jobs the plan also included a Just Transition benefit for training and income maintenance until placed in suitable employment.
With the assistance of economist Dean Baker, a Just Health Care budget was developed. Present levels of public spending for programs such as Medicare, Medicaid, VA, and municipal and state public health, etc. would remain the same. Instead of premiums for insurance plans employers would pay a payroll tax. And the wealthy would be required to pitch in a greater share.
Even after expanding coverage to all; eliminating deductibles, copays, Part B and charges for prescriptions, eyeglasses, hearing aids, etc; and adding dental coverage; we could still reduce the percentage of GDP spent on health needs–currently double what is spent for superior delivery in Britain and Canada today.
Labor Party bodies and affiliated unions, in collaboration with Physicians for a National Health Plan (PNHP), and public interest advocates such as Ralph Nader, found a good response to Just Health Care in the unions and communities. In Massachusetts local ballot initiatives put towns on record in support of single-payer and a new Florida State Labor Party was launched around a similar perspective.
Even though the Labor Party began suffering some major setbacks--such as the absorption of the Oil, Chemical & Atomic Workers union in to the Paperworkers, and a chill in relations with much of the labor movement over their perception of Labor Party ally Ralph Nader being the “spoiler” allowing the election of Bush in 2000--some significant health care activities continued.
In October, 2003 the Labor Party and the Midwest Joint Board of UNITE organized a Midwest regional conference at the Teamsters Local 705 hall in Chicago to prepare for inserting Just Health Care in to the debates in the upcoming 2004 elections. About 200 labor activists, mainly on the steward level, attended the gathering.
The UNITE Midwest Board also collaborated with the Ohio State Labor Party in launching the Single Payer Action Network of Ohio, a coalition of dozens of labor, religious, and community groups that continues to promote adoption of single-payer in the Buckeye state.
But efforts to inject single-payer in to the national debate didn’t get very far. The modest labor upsurge that had nurtured the launching of the Labor Party in 1996 was over. The labor statespersons heading the unions did not want to raise controversial issues such as war or single-payer that would embarrass Democrat friends. All of mainstream labor adopted the single-minded strategy of ABB–anybody but Bush. Of course, even though labor poured hundreds of millions in to the 2004 election cycle--we got Bush. The lesson they drew from this experience was efforts to elect Democrats must be redoubled, more money spent next time.
But the health care crisis could not be ignored. For more than a decade this had been the most contentious issue in collective bargaining. The chain of health care security enjoyed by most unionized workers began to break at its strongest link–the UAW.
The UAW was not, as they sometimes claim, the first union to obtain employer-provided health insurance. Insurance plans resembling those we have today took hold during World War II. While wages were essentially frozen by government boards companies were allowed to offer “fringe benefits” to attract and keep skilled workers during the war-time labor shortage. One of the biggest of the health plans was offered by Henry Kaiser to workers at his shipyard on California’s Permanente River. While Kaiser no longer builds ships Kaiser Permanente is today a major national HMO.
The union bureaucracy that consolidated at the end of the war made a fateful strategic decision that contributes greatly to today’s crisis. Instead of emulating their British cousins who won socialized medicine they decided to negotiate benefits in employer contracts. Health care remained a commodity, not a public service. Many foolishly thought this would be an aid in organizing–if you want benefits better join the union.
While not the first, the UAW became the most successful union in negotiating a broad range of benefits. Over the years they won thirty-and out retirement, Supplementary Unemployment Benefits and the Jobs Bank, tuition assistance for member’s kids, legal advice--as well as top of the line health and dental coverage including families, retirees, and surviving spouses.
For years these benefits were provided with little or no payroll deductions or out of pocket expenses. But even in the best of times this was not “free” coverage. It was all costed out and included in the final labor cost package agreed to by both sides. If the British or even Canadian systems had been in place much of the money devoted to health care could have been shifted to higher wages, or more paid time off.
The fatal flaws in this benefit strategy gradually started becoming apparent as early as the Seventies. Health insurance costs steadily rose faster than productivity and inflation–devouring more of the labor cost package. Sam Gindin, in an excellent article Lessons from the Humbling of General Motors, points out.
“Productivity in the U.S. motor vehicle assembly, for example, has almost doubled since 1990 yet real wages have remained virtually constant and in the parts sector they have actually fallen by about 6 percent.... while imports from Japan originally had the advantage of lower wage costs, the Japanese assembly plants that came to the U.S. more or less matched the wages of the Detroit Three in order to avoid unionization. Where then is the problem?”
“If we turn to total compensation (wages plus benefits), the cost problem is clarified. Such costs have in fact grown relatively rapidly. But the driving factor in this escalation of costs wasn’t primarily the gains negotiated in collective agreements. Rather, it was the extraordinary increases in costs for the same benefits. Inflationary pressures, in other words, didn’t come from auto workers but from the drug companies and private health insurers providing and profiting from these benefits.”
The Big Three’s initial response was a massive outsourcing and offshoring of jobs formerly done by UAW members. When GM’s parts-making spin-off Delphi filed for bankruptcy on their U.S. operations in 2005 they were thriving in Mexico where they were the second biggest private employer.
After this softening up the companies were ready to demand draconian take-backs from their UAW “partners.” The first round came in 2005 when the UAW agreed to open their GM contract mid-term to give the company concessions worth a billion dollars to be diverted to health care costs. The same deal was then approved by a razor-thin margin at Ford.
These 2005 concessions only whetted the appetite of the UAW’s Big Three “partners.” They looked to the Steelworkers for inspiration for the next big attack on cradle to the grave protection–the Voluntary Employee Beneficiary Association (VEBA.) Long a tiny trickle in the river of tax codes the VEBA was given new exposure in 2002 in a deal by the USW to give some very minimal benefits to retirees of four bankrupt steelmakers--Bethlehem, LTV, Acme Metals and Georgetown Steel. Initially known as the ISG VEBA it later became Mittal Steel USA. Then a defeated strike at Goodyear in 2006 led to that company contributing a billion dollars to a VEBA in exchange for ending employer responsibility for future retiree health care.
The VEBA solution became the center piece of a number of gut wrenching take backs agreed to by the UAW in the 2007 contract negotiations. Renouncing any future retiree obligations for new hires, the Big Three bosses negotiated seed money for a retiree VEBA that would be the union’s responsibility in the future.
Retiree health care is a bigger issue in auto than most industries. First of all, there are many more retirees and surviving spouses than there are active workers. And, since thirty-and-out retirement was won many retirees are not eligible for Medicare, when insurance benefits could be coordinated, for fifteen years or more. From a long term perspective this was a giant step in eliminating the “legacy burden” of the Big Three which is not shared with their competitors.
But the recession--and the election of Obama--emboldened the auto bosses to press for even more. McCain could never have gotten away with the bankruptcy restructuring plans Obama forced through at GM and Chrysler–even extending past the Canadian border. The VEBAs are already underfunded and the slashing of retiree benefits has begun, while active workers will have to settle for wages and benefits similar to the transplants–new hires in fact getting considerably less than the unorganized competition.
Through most of the postwar period the UAW was the pace setter, pioneering the way for gains by other unions. By taking on and defeating the strongest union the ruling class can now reverse this trend. The same give-backs on health care granted by the UAW will be demanded–and in most cases won–by all bosses. Quality, affordable health care cannot be long preserved through collective bargaining.
The majority of the working class has already figured this out. Though the term single-payer is taboo in the various push polls conducted on health care its generic description is by far the most popular proposal.
Hundreds of union bodies–including the UAW and USW–are on record supporting the current form of single-payer legislation, HR676. That bill shares most of the elements of the Labor Party Just Health Care--with the major weakness of no provision for Just Transition for workers displaced. But these resolutions clearly mean little in the fight shaping up around health care “reform.” Most of these unions–with the honorable exception of the California Nurses Association–are supporting Obama’s ever changing plan. Most say they want an ill-defined “public option,” that would compete with but not replace the health insurance robber barons.
A leading strategist for public option is Dr Howard Dean, chairman emeritus of the Democrat National Committee. In a just released book, Prescription For Real Healthcare Reform, the good doctor acknowledges the benefits of single-payer from a physicians point of view,
“It would be far easier for physicians, particularly those in private practice, to have a single form to fill out, preferably on a universal electronics records system, created by people who actually listen to doctors, before they design the system.”
But despite obvious benefits for both patients and doctors the former Governor of Vermont rejects single-payer. He says,
“Why not require everyone to be in a public insurance plan if it is much cheaper? The answer is simple. You can’t take choice away from Americans. This country was founded on the idea that individuals can make their own choices and are free to make their own mistakes.”
Perhaps Dr Dean didn’t get much history in his pre-med days. Actually this country was founded with competing social systems one of which, slavery, denied the most elementary human choices to a large segment of the population. But that’s another story.
It is true that the capitalist social system that came to dominate, after a Civil War, has always promoted the illusions that Americans have lots of realistic choices to determine our lives. For example, we have the choice between Dr Dean’s party or the other one.
There are few areas in American life that have less choice than health care. Most insured working people have to accept whatever insurance carrier is selected by our employer. The insurance plan–unlike single-payer--specifies which doctors, and which hospitals we may use, what drugs we are allowed, and what treatments and surgery are approved or denied.
If a public option is adopted it will most likely simply be the place where the sick and poor that the robber barons don’t want will be sent. But even if a competitive public option were established it couldn’t come close to the cost savings of single-payer. A huge chunk of those savings would be realized from eliminating the huge administrative overhead, both on the insurer and provider sides, necessary for approval of services and payment for every conceivable item down to the last individual aspirin tablet. As long as the insurance companies remain dominant players this bureaucracy must be maintained even if there is some kind of more efficient public option.
Obama’s plan would allocate some 600 billion dollars to do what insurers and providers should have done long ago–computerize medical records. The track record of an earlier 19 billion in stimulus money for health care workplace technology makes us suspicious of the motivation behind the funding.
Mischa Gaus, writing in the July issue of Labor Notes, shows how the earlier money is being used by health care bosses to sharpen management through stress. Able to constantly pinpoint the location of each worker also allows them to keep tabs on union reps and union organizing committees–all at tax-payer expense and in the name of health care and technology.
All of the plans on the table aim to drive more of the uninsured in to the insurance companies one way or another. If a plan is offered by your employer you must sign up or pay a penalty. If you have no access to an employer plan you have to sign up as an individual or–unless you can prove financial hardship–pay a penalty. Medicaid–administered by the states–might be expanded to include families in unique circumstances in some plans, just children and pregnant women in others.
About the only area where there is consensus among the table sitters is that it will all cost a hell of a lot more money and offsets must be found. When former Republican Speaker of the House Newt Gingrich once suggested cutting Medicare payments by 20 billion he was castigated for being an enemy of senior citizens. Now proposals for five times that amount are in the hopper.
When running for office, President Obama pledged to oppose any tax increase on those earning less than 250,000. Now he says he is open to taxing worker health insurance benefits.
White House staff are also preparing proposals for cut backs in Social Security as part of reducing the deficit swollen by war, bank bailouts, stimulus–and now likely health care “reform.”
Are we now a poor country who must accept big, continuous reversals in our lives? If we are poorer all the more reason to stop runaway health care costs. But clearly we are no poorer than Britain or Canada who still provide quality health care to all.
Turning again to Gindin, he cautions about the misconception “that the bankruptcies of GM and Chrysler, along with the financial crisis, signal the end of U.S. global leadership and its replacement by China, Asia, or Europe.” There are no serious competitors for global leadership. Japan and EU countries continue to invest in the American economy and China holds more of the U.S. debt than anyone else. The American economy is the engine of the global economy and more money winds up in or flows through New York than any other city.
“The U.S., in short, is going through an historic crisis that will include a long period of continued pain. But there is little evidence to suggest that any other country is interested or capable of challenging American leadership. And a crucial part of the strength of U.S. capital and the U.S. state lie in the weaknesses of its labour movement, which provides, as this crisis has sadly shown, the U.S. elite with all the flexibility it needs to solve its problems on terms favorable to it.”
This Canadian professor, long a strategist in the UAW and CAW, is spot on. The labor movement has been weakened first off by not recognizing allies and enemies. The employers are called “partners.” The politicians wearing the donkey logo are our “friends.” And even most of what passes for the left in the USA hail the present resident of the White House as a hero working for us, whose back must be watched.
Dr Dean’s weakness in history led him to make the remarkable assertion that Britain’s socialized medicine was the product of “conservative icon” Winston Churchill! Apparently for him the war-time conscription of all health care facilities and personnel was the starting point for the NHS.
It was, of course, the work of the British Labor Party, who gave Churchill the boot before the war was completely over, who actually established the most comprehensive and efficient health care system in any industrialized country. They did this in the face of fierce opposition from Churchill’s Tories. That Labor government also carried out extensive nationalizations of industry and led the rebuilding of war-torn Britain. The first health minister for the new National Health Service was Nye Bevan, leader of the Labor Party’s socialist left wing at the time.
In Canada the driving force behind what ultimately became Medicare was Tommy Douglas, pioneer builder of the labor party, today known as the NDP–voted the greatest man in the history of Canada. Douglas knew something about class divisions in society as anyone who has seen the popular animated film narrated by him–Mouseland--knows.
Those are examples of the kind of forces we must assemble in the USA if we are to win the health care we need and deserve. We need to not only popularize the content of the old Labor Party Just Health Care–we must revive the movement for a Labor Party as a working class alternative to the twin parties of business. Nothing else can do the job.
July 9, 2009
The webmaster of the kclabor.org website is a paid-up member of UAW Local 1981—the National Writers Union. During the 70-80s, while employed at Litton Microwave’s Minneapolis operations, he was elected to various positions in UE Local 1139, including Shop Chairman and Local President. In 1980 he took a union leave from the plant to work on a successful UE organizing drive at a Litton runaway plant in Sioux Falls, South Dakota. When Litton began shutting down its four Minneapolis plants Onasch was selected to be a worker representative in a Dislocated Worker Project administered by Minneapolis Community College—where he became a member of the Minnesota Education Association. Returning to his home town of Kansas City in 1989, he soon began a 14-year stint as a Metro bus driver. During that time he published a rank and file newsletter, Transit Truth, chaired a union Community Outreach Committee that organized public protests against cuts in transit service, helped organize a privatized spin-off at Johnson County Transit, and served a term as Vice-President of ATU Local 1287. He has also been involved in US Labor Against the War and the Labor Party since those organizations were launched and represents Midwest chapters on the Labor Party Interim National Council.
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