Wagoner asks for modest health reforms
GM CEO tells Congress of health cost challenges, stops short of asking for comprehensive changes.
NEW YORK (CNNMoney.com) -- Despite prompting from two Democrats, General Motors CEO Rick Wagoner stopped short Thursday of asking Congress to take a broad-based reform of the health care system.
Wagoner testified before a Senate committee about the problems his company and other automakers face paying for health care coverage. He told the Committee on Aging that the company spent $5.3 billion on health care coverage for its U.S. employees, retirees and their dependents in 2005, which he said is more that the company spends on steel in its cars.
But the reforms he spoke of were relatively modest - legislation to encourage more use of information technology in the health care sector, and disclosing all Medicare data on the cost and quality of physicians and hospitals across the country. He also called for with an undefined "better public/private effort" to focus on high-cost cases. Wagoner said 1 percent of Americans with chronic or serious illness account for 30 percent of the nation's health care spending.
What he did not call for is any significant shifting in health care costs from the private sector to government, even though in response to questions from Sen. Hillary Clinton, D-N.Y., he admitted that GM faces competitive problems due to government-paid health insurance in some other countries.
Japanese automakers such as Toyota (Charts) and Honda (Charts) do not have to pay for health care for their Japanese workers due to government-paid health care. And their U.S. plants, while paying for health care for active employees and dependents, do not provide the health care coverage for retirees and their families as does GM (Charts), Ford Motor (Charts) and DaimlerChrysler (Charts).
Clinton, who had led a government task force when she was First Lady that pushed for universal health care and more government control of health care spending, pushed Wagoner as to whether he and other businesses would get behind comprehensive health care reform.
"I think American companies are being put in an impossible position in regard to global competition," said Clinton. "I have become increasingly convinced we're getting a bad deal in America. GM is getting a bad deal. I don't think this is sustainable.
"Why does American business take such a bad deal?" she asked Wagoner. "Why do you not only bring your market power to bear but your political power?"
Wagoner said that GM and other automakers are interested in being "proactive" on health care reform, without addressing what changes it would support. In response to questions from Sen. Ron Wyden, D-Ore., he said he wanted to see the U.S.. health care system be "market-based." And he said GM wanted to concentrate on reform measures that had broader political support.
"There are things that Congress can act on right now that gets to the broadbased issue of reducing health care costs," he said, adding, "We should really push to get on those things everyone can agree on."
Next up: Nissan-Renault talks
Wagoner is due to meet Friday with Carlos Ghosn, the CEO of both Nissan and Renault, about a possible alliance between GM and those two companies. After his testimony, Wagoner told reporters that he wants to move "expeditiously" in reviewing a possible alliance with Renault and Nissan Motor Co. but would not predict the outcome of talks.
"Everyone would want to move to a yes or no decision promptly on something like this," he said, declining to elaborate on a possible time frame.
Wagoner said GM did not need an alliance to be successful.
"We have a good plan, we're turning the business," he said. "We're going to be in a position to be a successful business."