To the argument that companies will attempt to gain a competitive advantage as far as hiring and retaining workers through their health plans: interesting, entirely true, and completely irrelevant. Mere standard market behavior. Big farkin’ deal. Has zip to do with whether or not this is good for the society at large.
Even more to the point, it has zip to do with whether or not it’s even good for the company in question, which presupposes that the decision-makers in a company have a clue. Having spent more time than I would really want to add up scrolling through stock screeners and reading annual reports than I would ever want anyone to total, I can tell you that my overwhelming conclusion from all of this is: CEO’s are no better than Presidents of the US, and in many many cases are actually worse. So looking at their behavior, which is the current behavior of the market participants in health care, apart from the government itself, isn’t going to provide meaningful or useful insight into this problem. Or any other, for that matter, but as this one is the one before us, let’s just leave it at this: GM is not atypical. The managers at GM should have known long ago that Toyota was going to have them for breakfast, lunch, and dinner if they continued to fund healthcare at the levels at which they were funding it. That they didn’t address the problem until this past year is proof enough that your average management is worse than useless if your looking for someone whose behavior is in any way rational in this or any other sphere.
To the argument that it’s unfair to target Wal-Mart with this Maryland law: laughable. Like Wal-Mart cares what’s fair. If they don’t, the average Maryland taxpayer shouldn’t either. They should approach the question in the same way Wal-Mart does: does it improve my bottom line? If it does, screw Wal-Mart to the wall. If not, not. Wal-Mart isn’t going to reduce its employees to less than 10000, because as has been shown, it can’t, not without adversely affecting its revenues and profits. Given that, Maryland has every right to screw them in any and every way it feels like, because if the shoe were on the other foot, Wal-Mart would do the same.
That’s the way the real world works.
Which brings us to the larger perspective on all this: the US is in this mess because its workers are so cowed that very large segments of them actually believe that their interests are aligned with those of their employers. This stupid fantasy doesn’t afflict the average working Joe in Canada or Britain or France. The result is that they get equal healthcare for a lot less, and not only that, their employers do too. Why? Because everyone in those countries aggressively pursues their own interests, like A Smith would have wanted them to. Out of the melee that ensues, a solution that is good for the entire society involved emerges. The only reason, the ONLY reason, why the US has healthcare costs that are spiraling into the solar system and beyond is that its workers walk around thinking they can negotiate the best deal for themselves all by themselves, as if every worker were an island. Stupid wouldn’t even begin to describe this behavior.
So, even though you wouldn’t want to look to your average management for a solution, the fault doesn’t lie with your average manager; it lies with the worker, who is unable to see his own interest and to pursue it aggressively. A small minority, becoming smaller every day, does pursue that interest aggressively, and that minority is made up of unionized workers, the people who pushed for and got the Maryland law. They pushed for it and got it not because it was their preferred solution to the problem, but because it was the only way for them to advocate for the interests of the average Wal-Mart employee.
Now, stepping back, the point of this whole diatribe is that health-care, like pensions, or any other insured risk, has an inverse relationship between the size of the insured pool and the size of the cost: the larger the pool, the smaller the cost. So, if the workers of the US were to pursue their interest aggressively in this question, they would go for and get a Federal, nationwide solution to this problem, otherwise known as a UHC. That some individual business might see this as being bad for their competitive position vis-a-vis others would be irrelevant, especially given that globalization very definitely makes the domestic interests of an individual US-based business completely irrelevant and parochial. GM is finally beginning to figure this out. Given that they’ve been operating globally since the end of WWII, you can see that your average manager is more than a little obtuse when it comes to society-wide questions, or ones that involve looking out into the future more than a year or two.
So, you can’t expect a management or a management-oriented worker to make the case for UHC; it has to be made by workers who’s interest lies with making healthcare universally available and cheap.
Once that’s done, management will come around, once they see how much it lowers their costs and allows them to get on with the actual task of managing their individual businesses. But they’re not going to see that ahead of time; ahead of time all they’ll see is the situation before them and the competition that’s breathing down their necks, because that’s what they’re paid to see. But jumping from that to thinking that that form of thinking is actually good for either society or for any individual member of it is to make a jump without looking down to see just how far you will fall if you don’t make it to the other side. Like the coyote in the Road-runner cartoons.
Poof!
Except the results are a bit bloodier than that, usually.
As for whether or not the medical community would accept a lower payrate, this doesn’t even qualify as irrelevant. What are they going to do, move to Canada? Threaten their Congressman that they aren’t going to vote for him? Except for a very few very rich Congressional districts, this threat would mean exactly squat. Honestly.
Besides which, note the following well: the lion’s share of medical inflation accrues to hospitals, not doctors. See Table 128 of the Statistical Abstract, and note that, for an index based on rates as they were in 1982-1984, the hospital cost index was at 417.9 in 2004, while the physician cost index was at 278.3, below even that of dentists. The problem lies not with your doctor, but with your hospital, you know, the guys who charge you for an aspirin as if were a toilet seat for the Defense Department. Note as well, by looking at Table 708, that the index for doctors is lower than that for garbage collection, roughly equivalent to that for fresh fruits and vegetables, and way below that for educational books and supplies. Hospital costs, OTOH, are second only to college tuition in their rate of increase since the base year.
In having these discussions, it helps if you know where to direct your ammunition.
Full disclosure: I’m married to a doctor. I like to think that she’s as good for me as an apple a day. (index = 251.7, a bit below her cost)