GM urges speedy overall of U.S. health care


LAS VEGAS, Jan. 30 (Reuters) - General Motors Corp. called for an overhaul of the U.S. health care system on Friday, saying mushrooming costs threatened the survival of the country's struggling manufacturing sector.

Gary Cowger, president of GM's North American operations, spoke of the health care crisis in a speech to an international automotive conference sponsored by J.D. Power and Associates, an influential industry research firm.

It was the latest public broadside on the issue from the world's largest automaker, which is also the biggest private buyer of health care in the United States and saddled with medical-related costs totaling $4.5 billion a year.

That's more than GM spends on steel and works out to a payment of about $1,200 for every vehicle it builds, Cowger said.

Cowger said Washington's recent Medicare reform legislation marked a "good first step" toward easing the burden of health care on all U.S. businesses that compete globally.

But he added that it would barely cover the inflation rate for prescription drugs and was "just one small part of a much needed overhaul" of the entire health system.

U.S. health care costs soared to nearly 15 percent of Gross Domestic Product in 2002, Cowger noted. But if left uncontrolled, with expenses rising 14 percent to 18 percent a year, he added that health care expenditures were on track to reach a whopping 17.7 percent of GDP by 2012.

That's a burden that GM -- which contributes 1 percent to U.S. GDP annually -- or anyone else can shoulder for long.

"Today, rising health care costs threaten the very health of our nation's manufacturing base and its viability," said Cowger.

"The cost, quality and delivery of health care are at the heart of manufacturing competitiveness."

Cowger proposed no solution to the health care problem in his speech but said it clearly needed to be "part of the national agenda during this presidential election year."



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