Paralyzed By Ideology
One TPMCafe member wrote (in response to my question as to why employers don't want to get out of providing health care): "Why don't you get out . . .and ask the employers this question?"
Well, I did in the book. And their answers persuade me it's ultimately about ideology. Here's a little excerpt from that chapter so you can see for yourself. I'd love to know what people think.
Yet despite these radically changed circumstances, and the threats that health and pension costs pose to business's bottom line and public image, corporate America remains caught in a time warp in its attitude toward government. Health care offers the most vexing illustration. Business resolutely resists the idea of government assuring a basic minimum (along the lines of Social Security providing a universal basic retirement benefit) that might supplant its own current funding and administrative role. Inexplicably, business's message to Uncle Sam seems to be, "Whatever you do, don't get me off the hook for this mess." When you ask business leaders why this is the case - why Americans in the twenty-first century should still look to their employers, not their country, for such support - you bump up against uncharacteristically muddled thinking or nonsequiturs, sure signs that something beyond reason is at work. "If I've got a good health care program that you can go home and tell Muriel about, I've got a better chance of recruiting you than the guy down the street who doesn't have one," says Tom Donahue, the president of the U.S. Chamber of Commerce, by way of explanation. But if government assured a basic benefit, surely companies could still lure talent with supplemental offerings. "We'll end up paying for it anyway, and we won't have control over the costs this time," says John Castellani, the president of the Business Roundtable. But our employer-based system already delivers the costliest health care on the planet. That hardly makes a case that it's the answer. Business won't pay, or won't pay as much as today, if the powerful business lobby makes permanently lowering business's contribution to health costs its reform aim, rather than mindlessly fighting off government altogether. Steve Burd, Safeway's CEO, says that if government picked up the tab we'd lose the innovation and efficiency that companies like his bring to bear. But that's not clear either. The Veterans Administration health care system, for example, has been hailed as the leader in using technology and evidence-based medicine to improve health while lowering costs. And most ambitious health reform proposals ask government to take to scale the preventive care ideas that Safeway and others have helped pilot. Besides, on Burd's logic, Safeway ought to be running its own schools for employees, too, and raising its own army to protect them. That can't be right. So what's really going on in the corporate mind? History and common sense suggest only one answer: corporate America's reflexive anti-government ideology now stands in the way of its self-interest. This reflex is hardly new, but to the extent it now stops America from adapting successfully to the global economy, this mindset has become an economic threat in itself. Business originally resisted many government actions that have become widely supported fixtures of American life: child labor laws, the Federal Reserve, the Securities and Exchange Commission, Social Security, the Marshall Plan, national parks, federal aid to education, Medicare. The list is endless, and embarrassing. "Often it fought them with such gruesome predictions of awful consequences to our private enterprise system," wrote Theodore Levitt of the Harvard Business School in 1968, "that one wonders how the foretellers of such doom can now face themselves in the mirror each morning and still believe themselves competent to make important decisions on major matters in their own companies." None of this means business needs to love government, or overlook its idiocies and inefficiencies. (I've worked at senior levels in both sectors, and while government has problems, business ain't perfect either, as businesspeople well know.) It just means realizing, as executives in every other advanced nation do, that government plays a legitimate, indispensable role in assuring the provision of certain public goods. This kind of common sense is virtually taboo in American business today. One prominent Republican billionaire I know - who is appalled by our health care woes and who is outspoken on just about every other subject - refuses to go on record with his private view that government should provide a basic benefit via some kind of single payer plan and let folks who want more coverage add private plans on top. The gang at the club just wouldn't understand. Carl Camden, the CEO of Kelly Services, whose "free agent" work force has sensitized him to the inanity of the American way of health, says that for too many CEOs, "blind allegiance to free market principles has obscured the fact that our system isn't working and that health care can't be a free market anyway." Andrew Stern, the president of the Service Employees International Union, says that for twenty years employers told him to "get into the twentieth century." Those old-style union ideas of the 1930s, '40s, and '50s just didn't make sense anymore, he was lectured. These CEOs were right, Stern acknowledges; labor had to change. "Now I say to them, 'Get into the twenty-first century,'" he says. "'Employer-based healthcare is dead, employer-based pensions are dead, and you guys are relics of another era.' The people who were telling us we were dinosaurs are actually the dinosaurs of today."
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Can you hear the words of Rush Limbaugh? "Don't get into an argument with the Left on policy. Argue philosophy!" That is a debate he can win among his Dittoheads impressed with the idea that free market is a core value. It's almost religious.
Philosophy seems parallel to me with the way the Right to Life people cannot come to the Left because of that one issue on abortion when everything else the Left offers is in their best interests, unless of course they make more then $250K/year. But it can easily be argued that those in the upper incomes will benefit living in a more stable community with better services if they pay higher taxes.
It is encouraging to hear of executives coming to their senses. These past few years, all the Right could do was demonize Europe. As we ignored Europe, and spilled our blood and treasure all over the Middle east, Europe did quite well until the economic maelstrom developed. If our execs were able to have an open and honest conversation with Europe they might lose some of their resistance. These execs ARE very adaptable, they just resist and resent having to adapt, but they are very good at it.
March 27, 2009 1:48 PM | Reply | Permalink
"...government plays a legitimate, indispensable role in assuring the provision of certain public goods." Wm Vanderbilt's famous reply to keeping open a railroad line between NY and New Haven for the benefit of the public was, "The public be damned."
Obviously, the guy wasn't as big on the 'public good' as he was on his profit margin. Could be, in general, that the business class sees any or all government inroads into business as a predictable threat to the health of their bottom lines.
March 27, 2009 2:02 PM | Reply | Permalink
Read your book Matt and quite enjoyed it. I'm not persuaded by this, however. We all know that business leaders don't really believe in free markets. Certainly not on Wall St. They talk the talk but they go running to the Treasury when they get in trouble. Rural free marketers don't believe in free markets either. Just try to take a "conservative" farmer's subsidy away! This free market talk is just talk.
Here's the thing: big businesses believe that the cost of funding a public program will land on them and their huge revenues. Yes, what they provide is already costly but they get a tax deduction for it and, yep, they can always cut benefits, raise premiums or whatever they want.
March 27, 2009 2:02 PM | Reply | Permalink
Yup! If national health care is funded like Social Security, corporations will be required to pony up some amount. Right now, providing health insurance is optional - and they can change coverage, % of premium they pay at will.
March 29, 2009 12:27 AM | Reply | Permalink
As a longtime corporate employee, I can think of one more reason for CEO's to oppose health insurance provided by the government. Many employees stay in jobs they don't like because they need the medical coverage. With national health insurance, employers would lose this hold over people.
March 27, 2009 2:07 PM | Reply | Permalink
Hugely important point, thanks.
Lack of coverage when unemployed keeps us working longer, too, preventing possible openings for our children, and reducing the drain on pension systems.
March 27, 2009 2:29 PM | Reply | Permalink
elc,
that might be a plus for the employee.
March 27, 2009 3:15 PM | Reply | Permalink
With the crappy economy, no one's leaving a job if they have one. But if everyone had their own health coverage, whether employed or not - once the economy picks up - alot of people might bail on crappy jobs to start own businesses or move to someplace paying more take home $$$.
March 29, 2009 12:30 AM | Reply | Permalink
Health care through employment is an accident of history (wage freeze in WW-II). As a single payer advocate my suggested dead idea is, of course that for private profit health insurance companies contribute anything useful to a health care system. This fits more generally into the dead idea that is free market fundementalism, benefits from employers, etc.
Sometimes pure capitalism is useful for producing widgets. But health care systems and health economics are not such a place. It is "American Exceptionalism" at its stupidest (http://www.dailykos.com/story/2008/11/25/666148/-American-ExceptionalismHealth-Insurance-Company-Costs).
More specifically when it come to cost-control, as well as getting to health care that is both universal (all people) and comprhensive (all needed care), all the independent analytic studies, such as by Lewin Group recently for Commonwealth of national programs (http://www.commonwealthfund.org/publications/publications_show.htm?doc_id=777197); and for state programs, and earlier national analyses by GAO and CBO (http://www.pnhp.org/facts/single_payer_system_cost.php?page=all) show that single payer is the best way to control total costs (e.g., %GNP) and individual/family total costs.
The "politically acceptable" mandates plans, building blocks plans, mixed-public-private plans from mainstream Democrats don't do it. Neither does Wyden-Bennett and the various Republican proposals to get rid of the tax deduciton and promote free market competion for buying private health insurance (http://www.dailykos.com/story/2009/1/13/683458/-The-Most-CompleteHonest-Comparison-of-Health-Proposals)
So despite all independent economic anaysis, single payer is not on the table or to be spoken of in polite company. Sigh.
March 27, 2009 3:20 PM | Reply | Permalink
Right now, it's hard not to find Glenn Greenwald pretty compelling on the updated context for this healthcare discussion:
http://www.salon.com/opinion/greenwald/2009/03/26/comparisions/index.html
Which is to say that it's entirely possible that the corporations that have more recently been talking with Andy Stern's union with regard to universal healthcare, for example, might be as blocked as the public at the level of the federal government.
March 27, 2009 3:51 PM | Reply | Permalink
Sort of like, "What's the Matter with Kansas?". Didn't GM make some noises a year or so back about supporting Universal Health Care? I've always wondered why employers wouldn't be thrilled to get out from under that yolk. It would have been accomplished long ago with backing from Big Business, and yet they caved, along with our Government leaders.
Yes, the VA model is a good example. Medicare works just fine, too, when it's not being bamboozled by the cheaters. All it takes is. . .ready?. . .regulation.
Ah. Yes. Can't bring that dirty word into the dialogue.
Interesting post. Makes me want to read the book. Thanks.
March 27, 2009 4:41 PM | Reply | Permalink
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Hello ... Ramona
You bring good insight to the subject at hand.
~OGD~
March 27, 2009 5:50 PM | Reply | Permalink
to get out from under that yolk
What do you have against egg whites?
March 27, 2009 10:28 PM | Reply | Permalink
I’m not too sure about what you found.
I have done HR work with companies that are really pretty conservative, but they are always looking for the next buck or the advantage.
Health care benefits are a recruitment tool and a way to manage employee moral. But, in reality, in the past few years, employers have had to charge their employees more and more for the employees’ share of the health insurance bill. Consequently, many employees with a family have to pay more than they can afford and eventually end up dropping their insurance and blaming the employer for providing lousy health insurance benefits. Personally, I think that the owners and management could sacrifice more, but they cannot get accustomed to doing that. They do worry about worker moral because it eventually affects their profits. Either way, the rising health care costs threaten the profitability of many businesses---especially the businesses that are not very big.
From my personal experience and from my discussions with people from other companies, I really think that they are more than ready to get rid of the health care burden, and especially ready to switch to anything that would stabilize costs and not put their company at a competitive disadvantage.
Bob Spencer
March 27, 2009 5:23 PM | Reply | Permalink
In a somewhat similar situation and agree with you 100%
March 28, 2009 10:13 AM | Reply | Permalink
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Mr. Miller
Thanks for the timely response.
I'm quite happy to be the foil to bring forth the answer that you have provided. I'm hip enough to realize whenever an intelligent individual poses a question, usually they have the answer waiting in the wings.
You quoted from your book,
And that pretty much dovetails with what I answered in my earlier comment to your original question in your previous post. That being,
Again, thanks for the direct response. It shows that you are truly interested in what the members of the Cafe are thinking. That goes a long, long ways 'round here.
Best regards -- Your fellow Angeleno (see a little hint here).
~OGD~
March 27, 2009 6:01 PM | Reply | Permalink
The way the world works these days if one's back is watched by compadres one can succeed famously and do junk work at the same time. (Of course one can do great work and be part of a community too.) A lot of executives surely know the current system of medical care sucks but all the other executives are against a Medicare type system and that trumps the merits of the issue. If one is an executive and one argues the merits of a single payer system then one's career crashes but one can succeed famously on a personal level and at the same time lead one's company to perdition. There are a number of issues which rightwingers have trumpeted such as executive compensation and no government regulation which in the short term have helped executives out at certain corporations and as a consequence executives have adopted a rightwing ideology. To an executive what is said at the country club is more important than a fair take on the issues. It frequently makes personal financial sense to business executives to watch the corporation or even business as a whole go over a cliff. (Another example of this, that is the issues don't matter all that matters is one's community, is of course the Republicans in Congress. Is a Depression worse or the enemity of Rush worse? Republicans would rather see a Depression rather than be isolated from the Rush lead community.)
March 27, 2009 6:41 PM | Reply | Permalink
What employers, exactly, are resisting having their employee's health insurance provided without them? If they want to be able to attract people in that way, they can subsidize their insurance, or offer health club memberships, or to pay all deductibles, or to cover things normally not covered by insurance. I have a hard time believing this is real.
Surveys or no surveys, I just don't quite believe it.
March 27, 2009 6:45 PM | Reply | Permalink
Uh, don't look now, but unless the CWA caves in to AT&T demands, 125,000 CWA union members will go on strike at AT&T with health care costs the primary issue, in less than two weeks.
Even if you like your employer's plan, will you like it after the next round of cuts?
March 27, 2009 6:58 PM | Reply | Permalink
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Ah yes . . .
Hey Stivo:
Thanks for pointing that out.
You'll find this Health Benefits section list in a comment of what the CWA negotiated in late 2008 for for 65,000 union members employed by Verizon at the following Cafe blog:
HEALTH CARE: A Tale of Two Countries w/video
There are two videos there that may interest folks on how the CWA has actively supported and promulgated information on the single-payer/public option plan to the general pulic.
~OGD~
March 28, 2009 4:50 PM | Reply | Permalink
Why does business resist having the government take over health care?
Well, for one thing, the government takeover itself will not necessarily save them any money. Whatever they save will have to be paid out in higher taxes to cover the costs of the single-payer system. There's no such thin as a free lunch. Whether they pay for health insurance through taxes or through premiums, someone wil have to pay.
Any savings will have to come from actually making health care cheaper, not from the shifting of the burden to the state itself.
Other than some administrative savings, it is not at all clear that single-payer would make our health care system cheaper. Americans want health care, and they wants lots of it. Savings in single-payer countries largely comes from rationing, not from the fact of single-payer itself. While rationing is probably often good policy, it might not be very popular. The level of rationing needed to make the costs of health care lower may not be politically acceptable in the U.S.
In fact, a lot of people may be afraid that single-payer in the U.S. will make health care more expensive, as large numbers of people now demand the very best, most expensive care now that it's free.
March 27, 2009 7:05 PM | Reply | Permalink
Health care is already rationed, in the US. It's just rationed by dollars. It makes more sense to ration it by medical-evaluation (with, for those with the dollars to buy it, "extra" care for the wealthy, which of course the non-wealthy will gripe about, but so what?).
March 28, 2009 5:41 AM | Reply | Permalink
But we know what the "some administrative overhead" is: it's 30%. (This is the difference in cost between health-care-plan costs and Medicare costs.) So we would save approximately 30%, instantly.
I am under the impression that a lot of doctors don't take Medicare cases because they fell that the amount that the government pays is not enough. Others pad out their bill with extra operations in order to get the same amount they would have gotten from a non-Medicare patient.
So I think that it is safe to say that not all of that 30% is actually from saving on administrative overhead. (And not all of it is actual savings, because in some cases the doctor is putting extra padding on the bill that they would have been less able to do with a private company, so a $30,000 charge to a private company is still a $30,000 charge to Medicare, it's just that they are claiming $10,000 of extra surgeries to bring the bill up to what they ould have gotten from private insurance).
Health care is already rationed, in the US. It's just rationed by dollars. It makes more sense to ration it by medical-evaluation
My point is, once you stop rationing by dollars and people see health care as free, they will likely be a lot less accepting of any limits on it. I think that Americans are much less willing to see regulatory limits on what health care they get than Europeans, so the only effective rationing method is by price. Withut that, it will be difficult to ration care so as to control costs due to the psychology of the U.S.
Now maybe you think that this statement is wrong, but it is far from ridiculous to assume that the way that the U.S. works, single-payer could very well cost us more than what we have now. It's not surprising that businesses don't want to take that chance.
March 28, 2009 10:43 AM | Reply | Permalink
There are disincentives for abusing health care, such as deductibles and co-pays. I haven't heard that they are disappearing, and they should not.
I also haven't heard that care is "free," even with a single payer system (which is NOT the system anyone on the Obama side of things is pushing anyway, unfortunately). The way I understand it is that premiums would still exist; they just couldn't be "adjusted" to insure that the insurance company makes a profit. The only way single-payer will work is to share the risk; that is to include young and old, healthy and sick, and pay the same thing, which when spread out like that, would be less over-all.
There would be no such thing as "out of network." You could actually break that collar bone skiing and not have to pay $1,000 out of pocket like I did (with very good insurance -- if I had skiied without snow in my hometown and broken that bone, I would have had a $50 deductible).
It is possible to humanely and fairly "ration" extravagant treatment modalities based on ability to benefit. We already do that with transplant patients, for example. An 89 year-old who was bedridden for years and in need of a lung transplant, simply would not get one. There are excellent computer models to show who can benefit from a variety of other treatments, and could be put into place to prevent abuse of the system.
One huge hurdle: If single-payer truly includes everyone, the Feds (like Congress, for example) would lose their gold-plated policy and they SURE don't want to do that.
March 28, 2009 4:07 PM | Reply | Permalink
It's not just Congress that would lose their "gold plated" insurance. Most corporate insurance is two (or more) tiered as well. Ordinary workers get the usual HMO/PPO choice, for instance, but executives get coverage with no deductibles, no co-pays, etc.
March 28, 2009 9:25 PM | Reply | Permalink
But their companies could still offer them that; there will always be high end option add-ons available that cover plastic surgery, for example. Everyone would have basic coverage and those extra's would be there for the employers who want to provide them. I don't think the public would be very happy if our TAXES went to pay for the Federal Government employee's extras, however.
Of course they've managed to stay out of Social Security without getting nailed to the wall over it.
March 29, 2009 1:19 PM | Reply | Permalink
Re: but executives get coverage with no deductibles, no co-pays, etc.
You may wish to document this. I work for a very large financial corporation, and its benefits structure is actually quite progressive. Everyone has the same choice of plans, and both the insurance premium copay and the out-of-pocket limits are pro-rated to salary, meaning the execs are paying a lot more than the mailroom guys, and may end oup with higher out of pocket expenses too.
March 29, 2009 6:30 PM | Reply | Permalink
There would be no such thing as "out of network."
Really? There would be no alternate private providers that someone could choose instead of the government providers?
March 31, 2009 10:38 PM | Reply | Permalink
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Hey ... Glaivester
Just on the chance that you return...
So as not to go further off Matt Miller's topic and get buried in this thread here, please see my comments posted in my blog:
Glaivester's Impressions on Doctor's Refusal of Medicare Patients
Thanks...
~OGD~
March 28, 2009 6:36 PM | Reply | Permalink
March 31, 2009 4:28 PM | Reply | Permalink
One minor/side 'rational' that business might have for supporting the current healthcare paradigm ties directly to the huge amount of revenue generated by insurance companies. That revenue basically provided by us, like protection money to gangsters, eventually makes its way into the public revenue/financial streams that underwrite business loans/expansion, giving business a source of money, to 'play' with. Just a thought.
March 27, 2009 7:11 PM | Reply | Permalink
How many of the "resisting" businesses have divisions in the insurance biz?
I go with what was pointed out above, that it's not just offering a good deal to keep employees, it's offering any deal at all to someone for whom the alternative is zilch coverage.
March 28, 2009 12:54 AM | Reply | Permalink
But you don't have to have 'divisions in the insurance biz' to partake of their need to invest in something... anything. Their money is as fungible as the next guys. Just sayin'.
March 28, 2009 3:15 AM | Reply | Permalink
Businesses in the US are, in the main, run as authoritarian dictatorships. The authoritarians who run those businesses are, by their very nature, control freaks. It is only common sense that they don't want to "lose control" over health care and the comments you have in the excerpt amply demonstrate this to be the case. It is also true that their ideology prevents them from admitting the obvious: that a government run, single payer plan is what makes the most sense all around. The reason they cannot do this is because if they were to admit this to be the case, that would put the lie to their entire self-justifying pack of lies known as the free market. In that fantasyworld they are the unquestioned masters and they like it like that. Obviously, they would prefer to sink their businesses rather than relinquish control and expose their free market bullshit as nothing but a pack of lies.
March 28, 2009 2:51 AM | Reply | Permalink
Again, I recommend using judo tactics here: start by going to business roundtable groups and saying, "I agree with you that your private health care is an important perk. Obviously you should add more perks, such as private school for your employees, private auto insurance, and so on. I'm going to go lobby Congress to require that you provide this to your employees, OK?"
Then, when they object, use their arguments for private health care—pointing out that these are in fact their arguments, for private health-care. If they have a beef with their own ideas, perhaps they should think about their own ideas.
March 28, 2009 5:48 AM | Reply | Permalink
Re: Lack of coverage when unemployed keeps us working longer, too
But nowadays many businesses want their employees to retire early. Aged-based layoffs are rampant, since anti-discrmination laws here are not enforced at all.
On the larger question, "business" is just an abstraction. It's real people who make these decisions, and these people have a personal interest in the game: their own healthcare. Perhaps because of ideology (but not without some grounding in reality) the corporate execs believe a government healthcare plan would be worse than what they have now through their company, and that's probably a big reason why they they won't support such: they're looking out for themselves and so what if it imposes extra costs on the business, they've got theirs.
Which is why Obama's open choice plan is just the thing to finally make progress on this long-running crisis. The execs will be able to keep their company plan.
March 28, 2009 8:10 AM | Reply | Permalink
March 28, 2009 8:53 AM | Reply | Permalink
If one Googles the news about health care it is stunning and sickening how every MSM and many not MS are all a twitter about how the Health Insurance Industry has caved in on pre-existing conditions and is happy to take people's money in return for restricting access in all the other methods.
All they ask is that everyone be Forced to buy what they are selling. They all happily announce that this breakthrough means that this plan can be rammed through Congress right away since there is no longer anything to disagree about.
Any news that there are 75% of respondents that think that anything involving "for profit" Insurance companies cannot be classified as reform does not show up on lead Google Searches
March 28, 2009 6:40 PM | Reply | Permalink
Matt Miller said:
Perhaps the poster who asked the question of Miller should take a page from Obama's book: 'I like to know what I'm talking aoubt before I comment."
March 29, 2009 11:05 AM | Reply | Permalink
Another problem here is the disruption. If you reform the current system, you're going to have to find new jobs for all the people who currently have jobs on an the benefit-distribution treadmills. You won't have multiple full-time workers in every doctor's office and hospital doing the forms, you won't have as many clerks processing them, you won't have the research groups figuring out new and creative ways to retroactively deny coverage, you won't have the people whose job it is to have expensive lunches with HR directors...
Eventually you'll have a lot more jobs in the actual provision of healthcare, but won't someone think of the executives?
March 30, 2009 2:53 PM | Reply | Permalink