Wall Street Journal - July 17, 2006
Horse-and-Buggy Health Coverage By ANDY STERN
There is no subject that gets more discussion, analysis and lament than health care in America. Enough already. It's time to assert one simple fact: The employer-based system of health coverage is over. This may sound shocking, coming from a union leader whose members bargain constantly with employers for health-care benefits. But the system is collapsing, crushed by out-of-control costs, a revolutionary global economy and masses of uninsured.
CEOs know this best: They dread the meeting with HR managers who tell them, once again, that their health-care costs are through the roof. So they look for any way to control costs. Co-pays go up, subsidies go down, coverage is dropped all together. In the last five years alone, the percentage of businesses offering health benefits has plummeted to 60% from 69%. Here's how bad it will continue to get: McKinsey & Company projects that by 2008, the average Fortune 500 company will spend as much on health care as they make in profit. How can we possibly compete in the global economy with that kind of burden?
I understand why CEOs are afraid of health-care costs. What I don't understand is why they are so timid about doing something about them. These are the people who revolutionized medicine, communication, technology, entertainment and investing. And yet when it comes to addressing the biggest economic issue their companies and their country face, they resort to bookkeeping. Where are the visionaries? The tough-minded magnates who make billions for shareholders? Stuck in the 20th century, that's where.
To fix health care in America, we have to accept that we're living through the most profound transformative economic revolution in the history of the world. It's happening so fast we can barely keep track of it. Intense global competition. Contingent work. The explosive economies of China and India. Technology in the workplace. Outsourcing. By the time they are 35, young people entering the job market today will already have worked in eight to 12 jobs. Employers will be pit stops for them, not permanent homes. In other words, we are rapidly moving from employer-managed work lives to self-managed work lives, in which workers must figure out on their own how to maintain things like health insurance and retirement.
A new national policy framework is the easy part. There seems to be broad consensus that we need a universal system that provides affordable coverage, choice of doctors and insurance plans, core benefits, and shared financing among employers, employees and government. There are a couple of thousand position papers out there to choose from. The problem isn't policy, it's leadership. And I don't mean Washington, D.C. The political class in both parties is full of words and bereft of action. They are not going to provide the answers until they are forced to. That force must come from the business community.
Today I sent a letter to every CEO in the Fortune 500 asking them to make health care their national priority. I urge corporate leaders to come forward. Our union members -- your employees -- will work with you. The old idea that business and labor can't work together for the common good is as outdated as lifetime jobs. The Service Employees International Union is the largest health-care union in the country. Our membership includes nearly one million nurses, doctors, hospital staff, nursing home and home care workers. We know health care. You know business. Together, let's build a new 21st-century American economy.
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Mr. Stern, president of the Service Employees International Union, is author of "A Country That Works," forthcoming from Free Press.