Actual Article Week 3

Actual Article Week 3 - Health care In need of desperate...

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Health care In need of desperate remedies  Oct 16th 2008 | NEW YORK From  The Economist  print edition Could the financial crisis speed efforts to reform  America’s troubled health system? Illustration by S. Kambayashi TOMMY THOMPSON, a former secretary of health who made his name  spearheading health and welfare reforms when he ran Wisconsin, is convinced  that “2009 will be the biggest year for the transformation of health care.” On the  face of it, it seems a strange assertion, given the global financial mess that is  sure to dominate the next president’s first year. After all, that financial panic shows obvious signs of spreading into the real  economy, as the parlous state of Detroit’s car manufacturers makes clear (see  article ). But soaring health costs are one of the big factors that have brought  those car firms to the brink in the first place. Detroit’s automobile manufacturers  claim they spend over $1,500 per car on health costs, far more than is paid by 
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foreign firms from countries with taxpayer-funded health care. So a coming  recession may end up as a powerful impetus for health reform. Thanks to a pact made by big business and labour half a century ago, most  Americans receive their health coverage through their employers. Government  has encouraged this compact by not classing company-provided health cover as  a taxable benefit; people who buy their own, by contrast, have to do so with post- tax dollars. Economists criticise this tax concession, which is reckoned to cost  the federal exchequer over $200 billion, for a variety of reasons: it favours the  rich, discriminates against the self-employed and hinders labour mobility. But companies are starting to rebel. Tax break or no tax break, increases in  health costs, which have long outpaced inflation, have meant that employers are  spending ever greater amounts on providing cover. Those costs have nearly  doubled this decade alone, and a new report by Towers Perrin, a benefits  consultancy, forecasts they will surge by another 6% in 2009. This, firms argue, 
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This note was uploaded on 10/07/2009 for the course ACC ACC300 taught by Professor Jones during the Spring '09 term at Central Pennsylvania.

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Actual Article Week 3 - Health care In need of desperate...

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