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Consuming Industries Survey
Tuesday | 18 January, 2011 | 3:09 am

Rising costs

By Lauren Duensing

January 2011 - In 2004, a small percentage of survey respondents to Modern Metals' Second Annual Consuming Industries Survey mentioned health care costs as one of their top concerns. In fact, it was lumped in with margin health, currency manipulation, taxes, government and changing technology under "other."

Times have changed. Sixty-three percent of OEM, 57 percent of service center and 65 percent of fabricator respondents to the Ninth Annual Consuming Industries survey cited health care as one of the top challenges they will face in 2011.

"Health care insurance is the largest overhead expense on our income statement," says David Cox, president and COO of The Bradbury Co. Inc., Moundridge, Kan. "We are fortunate to have great hospitals and doctors in our country, and our citizens should have full access to this health care. Private enterprise is better suited to run the health care industry than the government. The American people seem to believe the bill was passed and we are off to the races. However, the Department of Health and Human Services has yet to write the rules which will drive implementation of the bill. Our costs have already gone up by adding the uninsured adult children of our employees and eliminating co-pays. I'm certain we will end up with even higher health costs as more regulation comes out. The result will be rethinking how and who pays for health insurance."

"The ultimate growth rate of the cost of delivering health care in the United States cannot exceed the industrial productivity growth rate over a long period; otherwise, it will become economically unstable as a private activity," says Mark Breckheimer, executive vice president, Namasco Corp., the U.S. subsidiary of Klockner & Co. "If this happens, only the wealthy will receive it. The prospect of the legal imposition of an ill-conceived, politically motivated, economically irrational solution to this problem should be a major concern of shareholders and employees alike, as a result. Businesses cannot bear an ever-increasing percentage of the cost of providing health care as a benefit because it would eliminate profitability, so unless a change is made in either cost or expectation, individuals of average means will be forced to work and allocate most of their wages to pay for it. To avoid this, and in order to make health care available to the majority of U.S. citizens, we need to eliminate the cost redundancies of excessive legal settlements and the like, together with multiple layers of cost duplication in the existing delivery system. The sooner we set about this, the better." MM

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