Unions lay down marker on healthcare costs

On the frigid dark Tuesday morning, the only warmth provided by barrels of fire, Patrick Ryan picked up a picket sign at the General Electric plant in Lynn, Mass., and fired what he believes is the first salvo in a renewed fight to preserve American workers' healthcare benefits.

"This isn't just about GE, it's about the healthcare system in the country as whole," says the 22-year veteran of the aircraft engine plant. "It's radically broken and people are beginning to recognize that."

Mr. Ryan is one of more than 17,000 workers nationwide taking part in a two-day national strike to protest a hike in out-of-pocket expenses at one of the nation's largest and most profitable corporations.

With healthcare costs spiraling upward into the double digits once again, thousands of companies like GE - recent surveys suggest as many as 75 percent of American businesses - are now asking workers to share a larger burden of the costs. That's pushed healthcare benefits to the top of the list in labor negotiations across the country. And experts say today's strike is a harbinger of many more demonstrations to come.

Indeed, the labor unrest over health costs is expected to prompt calls for a major reform of the healthcare system, just as it did in the late 1980s when the increasing cost of healthcare first jumped from the negotiating table to the picket lines. That spurred the first major effort at reform of the healthcare system in a generation. But, with a potential war on Iraq, terrorism, and daunting budget deficits, this time it could be several years before healthcare again rises to the top of the nation's agenda.

"I see things deteriorating and lots of [GE-style] stories over the next few months," says Robert Blendon of Harvard's School of Public Health in Boston. "But I don't see government stepping in until the 2004 elections and then voters would have to say they want a more activist government on healthcare."

The ostensible reason for the strike is GE's Jan. 1 decision to increase workers' copayments by between $200 and $400 a year. But union leaders contend there's a larger symbolic goal: to put management on notice that when contract negotiations come around this summer, workers won't tolerate paying more for healthcare.

From their perspective, management and corporate America in general are failing to deal with the real problem, which is the nation's broken healthcare system. Instead, they're simply passing the increased costs along to workers. That's a prescription, union leaders contend, guaranteed to cause the system to unravel even further, leaving more Americans uninsured and insecure.

"This is a downpayment on the future," says John Hovis, president of the United Electrical Radio & Machine Workers of America, one of the two unions leading the strike. "We're trying to get people to understand the real need for healthcare reform."

General Electric doesn't disagree that the healthcare system is broken. But spokesman Gary Sheffer says there's "no magic pill" to fix it and the company's immediate goal is to cope with rising costs. Since 1999, the amount that GE pays for healthcare has jumped 45 percent, from $965 million to $1.4 billion.

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