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Can GM Heal Thyself?

Sure, GM chief Rick Wagoner has plenty of problems he's currently battling. But the auto maker's real Achilles' heel, it turns out, may lie in the company's funding of retirees' health benefits. The Wall Street Journal turned its expert gaze to this issue in a story that ran yesterday and came up with some astounding findings. Currently, the company is spending about $5.6 billion to cover health costs for 1.1 million retirees. Obese beneficiaries, it's estimated, account for a full 26% of the people receiving care. Extrapolated out, that means obesity alone is costing the company about $286 million per year. That's some weighty stuff Wagoner's got to deal with. All told, the Journal estimates that health-care spending at GM totals roughly $1,525 for every vehicle produced. When you're talking about the difference between paying $20,000 for a car versus $18,475, that's a hefty chunk of change.

Of course, the retirees fully deserve the benefits they're now receiving for a lifetime of loyal work. However, GM's predicament certainly highlights the upside-downness of our current health system. On the one hand, health prevention is paid little more than swell-sounding lip-service. (For an excellent piece explaining why it's so hard to change lifestyle behaviors, be on the lookout for Alan Deutschman's cover story, "Change or Die" in the May issue of Fast Company). On the other hand, the pharmaceutical industry lives off the blockbuster drugs used to treat illnesses that have reached crisis point. This out-take from the Journal sums up the situation nicely:

"Robert Moroni, who runs GM's health plans, says drugs for cholesterol, high blood pressure and diabetes are among the highest-cost items for the car maker. Mr. Moroni is facing his own challenge. 'My doctor just told me that if I don't lose 25 pounds, he's going to put me on Lipitor,' he said, referring to Pfizer Inc.'s cholesterol-lowering drug.'" Call it a hunch, but I'm guessing Moroni doesn't shed the 25 pounds....

ADDENDUM: SCIENCE FRIDAY

Two science-related articles worth mentioning (just because they're fascinating reads--you know, if for some inexplicable reason quantum mechanics turns you on): First, Brian Greene, author of The Elegant Universe writes about Einstein's non-relativity work in the New York Times and Sharon Begley's column today in the WSJ (and no, despite overwhelming evidence, I'm not a paid spokesperson for the Journal) on the mathematically-mysterious Riemann hypothesis for prime numbers.