Vol. 12, No. 2,856W - The American Reporter - March 18, 2006

Market Mover

by Mark Scheinbaum
American Reporter Correspondent
Boca Raton, Fla.

BOCA RATON, Fla., Oct. 19, 2005 -- The sarcastic joke has become reality: General Motors and Ford are large health care and pension companies which happen to make some automobiles and trucks.

Even opponents of "national health care" or "socialized medicine" are learning that without massive changes, health and pension costs will bring down autos they way they are grounding airlines, and grinding big steel.

In 1933, Dr. Sidney Garfield was looking for ways to cover Los Angeles aqueduct workers - most of whom had no health insurance, when he got a phone call from industrialist Henry J. Kaiser. Kaiser would go on to become one of the true American heroes of World War II. Even after the war machine was winding down, his popular "Henry J," and Kaiser-Frazier cars, evolved to a legacy of community service. So, the pioneer health care consortium which bears the name "Kaiser Permanente" proves that influential Americans don't necessarily have to sit on their hands when the nation is in crisis.

Don't be lulled by news stories of pythons eating alligators, co-eds missing in Aruba, or gas stations pumping unleaded regular at 40-percent-higher costs than a year ago.

Nothing in the U.S. unbalanced see-saw called a budget - even Iraq - threatens working class savings, hopes, aspirations, and confidence, like a busted healthcare system.

Without violating any confidences, let's just say I sat in a room with 15 other supposed financial professionals this week and listened to the No. 2 guy at a renowned insurance company explain why he went shopping for a merger partner. He definitely didn't admit this, but it sure sounded like his portfolio managers "lost about $100 million that were not under our control" when allegedly investment grade bonds became pure junk. His defense that lots of insurance companies lusting for investment gains and more cash flow to meet rising costs had the same problem, seemed true, but somehow lame.

Henry Kaiser soon had this additional problem: how do you provide health care for 6,500 construction workers on the Grand Coulee Dam in the State of Washington? We're not talking about Blue Cross or an HMO for clerks and teachers. We're talking about muscle men-cum-gymnasts scaling palisades of concrete and steel in constant peril.

You can go to the "news media" section at kasierpermanente.org and get all of the minute details, but Dr. Garfield put any personal gain aside, and even when the Dam was completed in 1941 he and Kaiser were well into the "prepaid preventive health care business."

Kaiser did not invent the concept, but America did.

I'll get some arguments, but in my teaching days at the University of South Florida in Tampa, research into the life and times of Cuban patriot-poet Jose Marti in the Ybor City part of town was revealing: socialized medicine is actually as American as apple pie, or at least arroz con pollo.

In Ybor City the cigar workers who had fled Havana for Key West, and then to Tampa for better and larger working and living conditions, needed health care. A system of "mutual benefit" was established not only for health and dental needs, but drugs, and fire protection (volunteer or "mutual aid") service.

To this day (or at least the last time I visited a few years ago), in the basement of El Circulo Cubano (the old Cuban club with an upstairs veranda which served as a pulpit for Marti during visits), elderly Tampans still pay their weekly or monthly fees and receive prescription drugs. At the turn of the 20th Century the fee was a low as a dime a week.

The team approach or HMO approach, or mutual benefit approach now attempts to cover millions of Americans.

As long as basic, quality health care is viewed as a "benefit" or a "fringe" or an "individual" coverage issue, the entire system is doomed.

At the most basic level the problem is the single mom, valued for doing a great job, who is worried out of her mind because her 12-year-old son, with no insurance, broke his leg at soccer practice. If somehow she has a relative to help care for the child or pay the bills, every hour on the job she is worried about medical bills and her child. The number one proximate cause of personal bankruptcy in the United States is medical cost. Period.

From a construction site to Kaiser's shipyards in California, to the public in the San Francisco Bay area, Dr. Garfield had a hard time retaining doctors (only about 12 of his 75 physicians stayed to work in the clinic setting after the War), but he kept with the plan. After a decade he had 300,000 members in Northern California. Organized labor, used to pooling resources for the common good, served as a big catalyst for Kaiser Permanente's success.

My dad's old union, the Retail Clerks International Union was part of the reason for the success. Did it change lives and families? I'm not sure, and maybe this would be a negative for some families today, but on two or three occasions my dad turned down the higher-paying supervisory jobs because of inferior job security and health benefits. His health benefits with two often sick kids made the decision easy.

In my former life as a syndicated national radio talk host, I often reflected that as long as folks such as Ted Kennedy and Hillary Clinton are the most articulate speakers for some health reform, all reform is doomed. They are magnets of criticism because of their personal lives, personal choices, family histories, and political baggage.

Ironically, and perhaps facetiously, I figured there would be quality basic coverage for all working Americans when a Newt or a Strom-type stands up and drawls: "It ain't a pinky-Commie thing. I just think that the hard workin' folks in Moultrie should get the same darn benefits the members of the You-nited-states Senate give themselves, or the insurance they've got for those big boys up thar on Wall Street!"

I also heard from many listeners who hated "federal give-away" programs. They'd say, "I work hard, I built a business, I pay for health insurance for my family, and I saved and scrimped and cut back on luxuries to do it, if other Americans can't do the same thing, well, tough! Why the hell should I pay for them with my tax dollars?"

It sounded like a pretty good, pioneer, American spirit argument, until the same callers or their clones, had the same comment about, "I pay for my kids to go to private schools, why should I. . . . .?" At that point it dawned on me that this was the democracy hit squad, and the logicial or illogical conclusion would eliminate public libraries, sanitation service, and the fire department.

Maybe today some Congressional committee should take the entire VA, Ford, GM, all surviving airlines with union contracts, and the Pension Benefit Guaranty Fund, and start over. Call in Chile, or Spain, or Canada and keep what's good and delete what's bad.

Then again, when you're sitting home at night grabbing the remote from your spouse, maybe you should click right by Donald, and Martha, until you find - somewhere - a Henry J.

AR Correspondent Mark Scheinbaum, a former UPI newsman, is chief investment strategist for Kaplan & Co., members Boston Stock Exchange, NASD, SIPC.

Copyright 2006 Joe Shea The American Reporter. All Rights Reserved.

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