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$1.2 TRILLION LOST TO EXCESS HEALTH COSTS IN 12 YEARS, WORKING FAMILIES LOST $8,398, SM. BUSINESSES PAY $1,283 PER EMPLOYEE TOO MUCH

 $1.2 TRILLION LOST TO EXCESS HEALTH COSTS IN 12 YEARS, WORKING FAMILIES LOST $8,398, SM. BUSINESSES PAY $1,283 PER EMPLOYEE TOO MUCH
 WASHINGTON, Oct. 22 /PRNewswire/ -- Working families took the equivalent of a 5 percent pay cut in 1992 and lost $8,398 since 1980 because of our nation's failure to control health costs, according to a new study released today by the Service Employees International Union. And controlling healthcare costs would have reversed one of the most damaging economic trends of the last decade -- the decline in real wages for most workers.
 The study, based on calculations by the non-partisan health economics consulting firm Lewin-ICF, also showed that limiting healthcare cost increases to the rate of overall economic growth would save businesses an average of $1,015 per employee per year and cut the 1992 federal budget deficit by 27 percent.
 The total tab for excess health costs since 1980 -- the portion of health costs that exceeded GNP growth for the period -- is $1.2 trillion, according to Lewin-ICF.
 Lewin-ICF also conducts data analysis for the U.S. Department of Health and Human Services and research organizations on both sides of the political spectrum.
 "Working families have paid for our country's failure to control runaway health costs with squeezed family budgets and falling living standards, and these costs in turn are one of the most important causes of our sick economy," said John J. Sweeney, president of the Service Employees International Union, AFL-CIO, which commissioned the research by Lewin-ICF. Sweeney also chairs the AFL-CIO Committee on Health Care. The Service Employees Union, with 1 million members, is the fastest growing union and one of the most diversified in the AFL-CIO.
 Sweeney was joined by John Shepherd, vice president, government relations of Safeway, Inc., who pointed to the finding that one-third of business health costs in 1992 -- $1,000 per employee per year -- is attributable to excess healthcare costs. Safeway is an Oakland, Calif.-based company with 87,000 employees and 875 stores and is one of the major American corporations pushing for a solution to U.S. healthcare problems. Safeway is the country's third largest retailer.
 "If we had controlled costs the way the rest of the world does, American business would be spending, on average, $2,000 rather than $3,000 per employee per year," Shepherd said.
 "For small businesses, such as those providing products and services to Safety, the savings would have been even more dramatic," he said.
 "If health spending had kept in step with the economy, small businesses would be paying $2,579 instead of $3,862, a savings of $1,283 per employee per year.
 "The cost problems of individual companies add up to a major problem for the economic well-being of our country," said Shepherd.
 Although it is increasingly understood that rising employer health premiums have depressed wages, the new study -- titled "Out of Control, Into Decline" -- is the first detailed damage report of the impact of runaway healthcare costs on worker wages, corporate profits and government deficits over the past decade.
 According to the study, if health cost increases had been held to the rate of GNP growth (an average 8.3 percent annually) since 1980, instead of rising at 12.5 percent a year:
 -- Savings for an average working family could have totalled $12,000 if they had put the dollars lost in the bank;
 -- Health care in the United States would consume roughly the same proportion of GNP as it does with our major trading partners (instead of 1.5 to 2 times as much), boosting the competitiveness of U.S. companies;
 -- States would have an extra $34.9 billion available in 1992 -- enough to close all but $4.8 billion of the $39.7 billion projected total of state budget deficits;
 -- The federal government would have saved $79 billion in 1992 alone, enough to cut this year's federal deficit by 27 percent.
 "It is clear that economic rebuilding in the U.S. is not possible without stringent measures to contain healthcare costs," said Sweeney.
 Both the Service Employees Union and Safeway have endorsed the call for comprehensive, national healthcare reform issued last year by the National Leadership Coalition for Health Care Reform. The coalition coordinates the efforts of dozens of other companies, unions, consumer groups and associations of healthcare providers.
 The Service Employees Union has led the labor movement's drive for health reform. It is the largest union of healthcare workers in the United States.
 -0- 10/22/92
 /CONTACT: Denise Mitchell or Mary Herdoiza for the Service Employees Union, 202-842-3100/ CO: Service Employees International Union; Safeway, Inc. ST: District of Columbia IN: HEA SU: ECO


IH -- DC011X -- 3556 10/22/92 11:58 EDT
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Date:Oct 22, 1992
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