Health care and labour relations (Editorial)

By John Hobel
|Canadian HR Reporter|Last Updated: 09/05/2003

Last month 20,000 GE workers across the United States staged a two-day walkout, the first national strike the company has experienced in more than three decades. The cause: worker objections to increases in health plan co-payments.

GE upped annual co-payments by about $200 per employee, an understandable move with the firm’s health-plan costs increasing 45 per cent since 1999. So it’s not a case of cost-cutting, rather trying to figure out how to keep up with annual double-digit health increases. Indeed, a new study by the Employment Policy Foundation in the U.S. shows the employer share of health-plan costs has remained steady since 1980 at around the 80 per cent level.

GE’s problem, the problem facing all American firms, is that the country’s health system can’t contain costs. An aging population and escalating drug costs are pressure points in both Canada and the U.S., but the Americans have added private-sector profit margins and the administration costs of such a system to the mix. This is something the Romanow report wants to avoid, and employers should consider the stakes.