updated 7/13/2006 3:16:25 PM ET 2006-07-13T19:16:25

General Motors Corp. Chairman and Chief Executive Rick Wagoner said Thursday that Congress should consider a number of reforms to help business deal with mounting health care costs, pointing to his company’s record of innovations.

Wagoner told a Senate panel that Congress should support measures providing “a vigorous and robust” prescription drug market, implementing national health information technology and more focus on high-cost, catastrophic cases among a small number of patients that account for about 30 percent of health care expenditures.

“We need to get greater value for our health care dollar,” Wagoner told the Senate Special Committee on Aging.

U.S. automakers such as GM, Ford Motor Co. and DaimlerChrysler AG’s Chrysler Group have said that rising health care costs make it difficult for them to remain competitive with foreign rivals.
General Motors is the nation’s largest private provider of health care and spent $5.3 billion on health care last year for 1.1 million employees, retirees and their dependents.

About 530,000 of GM’s health care recipients are age 60 and over and last year, the company spent $1.9 billion on prescription drugs.
Sen. Gordon Smith, R-Ore., the committee’s chairman, said “steps can be taken to better manage their care and create efficiencies to ensure we are spending our health care dollars wisely.”

Sen. Hillary Rodham Clinton, D-N.Y., who once sought to overhaul the nation’s health care system, told Wagoner that U.S. companies “are being put in an impossible position when it comes to the global economy.”

“Companies like yours which essentially bear the social contract of the last 50 years are getting an especially bad deal because they’re paying for what are now considered retired employees,” Clinton said.

“Why is it that American business doesn’t just rise up and say there’s got to be a better way here?” Clinton asked.

Labor unions such as the United Auto Workers have sought a national health care system and pressed GM and other automakers to seek a universal system. But Wagoner did not express support for such a plan, describing a broad number of programs that GM has implemented to address the costs.

Wagoner said the automaker has developed programs that encourage disease prevention, seek the reduction of waste through information technology and push employees to buy generic drugs, which offer a reduction in cost without sacrificing quality.

He said GM supports legislation to provide a full range of pharmaceuticals, including generic biopharmaceutical drugs, and a bill pushed by Sens. Mike Enzi, R-Wyo., and Edward Kennedy, D-Mass., to use technology to make patient records available instantly as a way of reducing medical errors.

The committee also heard from Arizona Gov. Janet Napolitano, who described the steps her state has taken to contain health care costs.

“You can do those savings and still provide quality health care,” Napolitano said.
GM is engaged in a turnaround plan after losing $10.6 billion last year, hoping to counter losses in the crucial North American market. About 35,000 hourly workers recently agreed to retire or take buyouts, and GM has announced plans to close a dozen plants by 2008.

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