Business' Stake in Health Reform

August 09, 1994|By CURTIS H. BARNETTE

BETHLEHEM, PENNSYLVANIA. — Bethlehem, Pennsylvania.--Let me state this very clearly -- American businesses strongly support efforts to achieve comprehensive national health-care reform. This support includes big businesses, such as Bethlehem Steel and other major corporations, and it includes thousands of small businesses all across the country.

We at Bethlehem have been actively supporting comprehensive health-care reform both as an individual company and as a member of the National Leadership Coalition for Health Care Reform. Our support for national health care that guarantees coverage for all Americans and contains costs began during the Bush administration and continues strongly today.

The National Leadership Coalition for Health Care Reform is a diverse group of about 100 organizations, including many other major Maryland employers such as General Motors, Westinghouse, Giant Foods and A&P. Its members also include the United Steelworkers of America, other labor unions, consumer organizations and health-care provider groups.

A great many small businesses are also supporting national health-care reform. More than 340,000 small businesses, with more than 3 million employees, are members of the Small Business Coalition for Health Care Reform.

Why are these businesses and other organizations supporting health-care reform?

First, reforming our health-care system and managing its costs are critical issues for American industry and the nation. Most large businesses and many small businesses already provide health coverage for their employees, and health-care costs are rising faster than other sectors of the economy; they are projected to exceed $1 trillion in 1994 and $1.68 trillion by the year 2000.

Second, no area of public policy will affect our nation's economic future more than our policy on health care. Our system is the most expensive in the world, and without change it will cripple the ability of American businesses to compete in the global economy.

We at Bethlehem believe that national health-care reform must effectively address the following key issues:

* There should be universal coverage for all Americans, with a shared responsibility between employers and employees.

* Budgets should be established at the federal level to curb health-care cost increases and bring them in line with the nation's overall inflation rate.

* Rate controls, such as those in Maryland, should be established so that all payers -- public and private -- pay the same amount for the same health-care service.

* The special needs of non-working Americans, including early retirees, should be addressed.

* Cost-shifting must be eliminated. Private employers are now paying a significant portion of the health-care costs of people on government-aid programs or those who have no health insurance.

For Bethlehem and other domestic steel companies. health-care reform is of special importance. Our steel industry today is the low-cost, high-quality producer of steel products for the U.S. market, This has happened through capital spending and significant restructuring. The steel industry today has approximately 175,000 employees, down about 45 percent from 1980. Private companies, not foreign governments, pay the expenses of this restructuring, including pension and health-care costs for deserving retirees and their dependents.

Among our major foreign steel competitors, the United States has the highest per-capita health-care costs, and these costs place American steel companies, and other domestic companies as well, at a competitive disadvantage. In the United States, this cost is borne principally by the larger employers. In Canada, Europe and Japan, the cost of health care is spread more equitably among all employers and the public.

Runaway health costs threaten the continued viability of RTC employer-provided health-care programs. Since the end of 1980, the American steel industry has made significant progress in improving its competitive position. Productivity has doubled and quality has improved to world-class levels. Employment costs have been carefully controlled so that our wage costs, exclusive of health insurance, have increased only 38 percent since 1980. In stark contrast, steel companies have experienced a 285 percent rise in health-care benefits.

For health-care cost containment to work, it is essential to achieve comprehensive reform that provides for universal coverage and contains costs across the whole health-care system. Halfway measures are not sufficient to deal with the genuine crisis in our health-care system. As a nation, we need effective health-care reform, and we need it now.

Curtis H. Barnette is chairman of the Bethlehem Steel Corporation.

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