May 11, 2008 - Outsourcing Health Care

I ran across a factoid not long ago that’s set me to thinking. In a Newsweek article by Fareed Zakaria, I came across this statistic: “U.S. carmakers now employ more people in Ontario, Canada, than Michigan because in Canada their health care costs are lower.”

Wow. That’s a telling snippet of information. The economy of the Detroit metro area – long the traditional heartland of the American automobile industry – has in recent years been devastated by layoffs and plant closings. I’ve heard that part of the reason for this – besides competition from Japan, Korea and other countries – is the heavy pension-and-benefits packages the big U.S. automakers have to bear, particularly for their retirees.

I never imagined, though, that these companies would find a way to outsource their medical benefits: by packing up their manufacturing plants and moving them lock, stock and barrel across the river to Canada.

Canada, of course, has a national health plan. Their workers’ health benefits are paid for by the government. The American auto executives, while urging “Buy American!” out of one side of their mouths, are whispering “Buy Canadian!” out of the other, with respect to health care.

It’s hard to imagine a more telling indictment of our health-care funding system than this. Our broken system has become a problem that’s bigger than the privations of individuals and families. It’s affecting the economic health of our entire nation.