Publisher’s Note: Coming Soon: Health Reform (Really)

March 1, 2007

Corporate America wants action on exploding costs.


Recently, a Midwestern doctor told me that rising healthcare costs confront him in three unpleasant ways: as a consumer who must pay more; as a business owner who must absorb more; and as a provider of services who is compensated less.

But it could be worse. He could be the CEO of Ford Motor Co.

The American automobile industry is to business what baseball is to sports: an historic and uniquely American pursuit, if tarnished by modern mismanagement and shrewd foreign competitors.

Combined, the so-called Big Three companies that comprise the U.S. auto industry - GM, Ford, and DaimlerChrysler - spent $8.7 billion last year on healthcare. That’s about 5 percent of the cost of each car sold by a U.S. automaker in 2006, and growing. Ford spends $1,500 for every car it sells to cover the healthcare expenses of its workers and retirees. In January, Ford announced it had lost $5.8 billion in 2006.

The Big Three’s foreign competitors are based in countries where healthcare costs are distributed throughout the economy. So healthcare is not a direct cost for Toyota or Hyundai.

That 5 percent is a big deal and getting bigger every year. More than any other factor, exploding health costs may someday soon be responsible for the death of the American auto industry.

That’s why top U.S. auto executives, in a meeting last year with President Bush, requested a solution to America’s healthcare crisis, not a multibillion dollar federal bailout.

Imagine that: big business asking for a federal solution to a national problem. And it’s not just the auto industry. Business executives in virtually every U.S. economic sector say that healthcare costs are more than a hindrance.

It’s no longer just liberals who want a federal government healthcare solution. Corporate America, supported by long-standing federal laws and court rulings, is likely to force a national solution.

At some point, the federal government will step in and redistribute the costs of healthcare. It is unavoidable.

How will this affect you?

It may reduce the costs of healthcare for you as an individual and a business owner, but those costs will simply be redistributed throughout the economy.

And as for your compensation?

We’ll see.

In January, during his State of the Union address, President Bush hinted at an answer.

After declaring that “[a] future of hope and opportunity requires that all our citizens have affordable and available healthcare,” Bush asserted that “[i]n all we do, we must remember that the best healthcare decisions are made not by government and insurance companies, but by patients and their doctors.”


Maybe that’s a commitment to letting physicians and patients determine a course of treatment. But it is no commitment to how much you will be paid for your services.

So how long before this federal solution?

We’ll hear a lot about healthcare in the months leading up to the 2008 presidential election. Maybe a national consensus will emerge and action will be taken beginning in 2009.

What do you think? E-mail me at kkarpay@physicianspractice.com.

This article originally appeared in the March 2007 issue of Physicians Practice.