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.

A glance at page G3 in the

Guide to Pensions & Benefits

, included with this issue, shows just how fast employer health costs are outpacing inflation — but Canada’s publicly funded system has consistently kept health spending as a percentage of GDP at about four points below that of the U.S. American firms are paying these costs directly through their health plans.

Canadian employer-sponsored health plans meet supplementary needs, rather than core services — for now. The danger is that further reductions in the publicly funded system’s quality, coverage and accessibility will put the pressure on employer plans to pick up the slack.

Brian Payne, president of the Communications, Energy and Paperworkers Union of Canada, is already out on the hustings warning that if the Romanow report’s pro-public system recommendations aren’t implemented business can expect health-plan wrangling at the bargaining table.

“The strike by GE workers is a harbinger of what’s to come in Canada if our health-care crisis is not addressed,” Payne said. “Privatizing medicare or allowing more for-profit medicine does not reduce costs, it transfers those costs to the private sector economy and to employers and workers.”

Too much of the Canadian health-care debate has centred on increased private-sector involvement, as politicians and think-tanks battle over ideology rather than efficient health policies. And employers have too often sat on the sidelines in this debate — the lack of employer input during the Romanow Commission’s information and opinion gathering stage was woefully inadequate. If Canadian employers want to avoid putting more money and effort into health-plan management, they should speak up and defend the good deal they’re getting from the public system.

If employers are content to let governments increase private-sector involvement at the expense of a comprehensive publicly funded system, then business will pay for it at the labour bargaining table.

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