Interesting excerpt I came across today in Fareed Zakaria’s book The Post-American World (which, by the way, is an excellent read) :
For a century after 1894, most of the cars manufactured in North America were made in Michigan. Since 2004, Michigan has been replaced by Ontario, Canada. The reason is simple: health care. In America, car manufacturers have to pay $6,500 in medical and insurance costs for every worker. If they move a plant to Canada, which has a government-run health care system, the cost to the manufacturer is $800 per work. In 2006, General Motors paid $5.2 billion in medical and insurance bills for its active and retired workers. That adds $1,500 to the cost of every GM car sold. For Toyota, which has fewer American retirees and many more foreign workers, that cost is $186 per car. This is not necessarily an advertisement for the Canadian health care system, but it does make clear that the costs of the American health care system have risen to ap oint that there is a significant competitive disadvantage to hiring American workers. Jobs are going not to countries like Mexico but to places where well-trained and educated workers can be found: it’s smart benefits, not low wages, that employers are looking for.”
Thoughts?
Comments
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Jake,
The problem with our health care system isn’t so much a problem with the free market, as it is a problem with having a lack of competition. Recently the AMA made mention of this when they released data showing that most health insurance markets are dominated by only one or two major health insurance companies. What happens then is these major groups have, essentially, a cornered market. What complicates things is that many politicians - mainly those who blame free markets for failure to provide coverage - think the answer is more of a government-based program. However, Canadian and UK models have proven to provide poor quality of care outside of basic preventative care visits. Recently in the news is the case about UK’s national health care system only finally approving coverage of some proven cancer drugs, but this is only for select patients and not as widely accessable as would be elsewhere.
Here’s info on the AMA’s statement about insurance markets.
http://www.ama-assn.org/ama/pub/news-events/news-events/health-insurers-consolidate.shtml