Driving a Point about Health Care Reform

I’m mesmerized by this video, watching it over and over again while contemplating this current debate over health care reform.

To commemorate its 50th anniversary, the Insurance Institute for Highway Safety (IIHS) – the organization that conducts crash tests and issues safety ratings of cars – recently smashed together a 2009 Chevrolet Malibu and a gorgeous, mint-condition 1959 Chevy Bel Air.

Nothing is particularly remarkable about the Malibu or the Bel Air. Each represents the typical car of the era.

The collision between the old and the new starkly demonstrates the improvements in automotive safety design and fabrication that have evolved over the last 50 years.

Watching the slow-motion physics is startling. The front of the Bel Air crumples, thrusting the engine into the passenger compartment. You can see the front bench seat lift and separate from the frame. The driver’s door pops open, the windshield flies out. The driver bounces around the passenger compartment like a lottery ball in a Pick Four draw, striking the steering wheel in the head and chest.

By comparison, the passenger compartment of the Malibu – featuring restraints, air bags and modern design and manufacture – remains comparatively intact. The driver’s forward momentum is cushioned by the air bag deploying from the steering wheel.

The key to appreciating the significance of the video is this: The auto industry fought tooth and nail against all of those safety innovations.

The Bel Air was designed purely by the industry, while the Malibu has all the safety features that have been mandated by law ever since. You could label one car “Free Market” and the other “Government Regulation.”

Automotive safety began to gather steam in the U.S. in the early 1960s. In this respect, the country was well behind developments that had already occurred in Europe and elsewhere. Seat belts weren’t required on new cars until mandated in a law passed by Congress in 1966, which also created the U.S. Department of Transportation.

The auto industry didn’t want seat belts to be mandatory. Pardon me for summarizing decades of history, but there is a substantial body of literature for anybody interested in studying the background of the auto industry’s attitude and activities regarding safety.

Auto companies preferred to pack their cars with power steering, power brakes, power windows, more powerful engines. They argued that seat belts were an additional expense that consumers didn’t want. Seat belts were cumbersome and uncomfortable.

Stories circulated – today we’d call it a meme – that seat belts would kill you by interfering with your ability to escape a car in case of a fire or submersion.

Sound familiar?

The auto industry lobbied intensely against mandatory air bags (they’ll kill you!) and three-point restraints (the shoulder strap will break your neck or decapitate you!). Some even argued against mandatory child safety seats, since they put an additional burden on those least able to afford them.

The auto industry fought to kill legislation in Congress, water down standards, and delay implementation for years. They said the government has no business getting involved in automotive design, which should be left to car company engineers who, after all, know what’s best for consumers. They opposed the very idea of auto safety and crash testing.

Today, of course, we accept all these things as givens – air bags, passenger restraints, energy-absorbing designs, crumple zones. We don’t even think about it. We all know it’s built in.

When you get behind the wheel of a car today, you have some assurance that if an idiot plows into you the steering wheel won’t smash into your face and your toddler become a ballistic projectile.

Who do you have to thank for that? The U.S. auto industry? They could have done it on their own, but didn’t. The Swedish car company Saab introduced seat belts as a standard feature in 1958.

Left on their own, the U.S. auto companies would likely have delayed introducing safety innovations for many years. There is more money to be made in air conditioning and radios. Absent the law, if introduced at all safety features would been an option available only to people who could afford them.

Safety was not a big selling point. Only in recent years have car companies begun touting the safety of their products and showing crash footage in commercials. It’s hard to imagine a 1970s-era commercial for a Cadillac or Mustang in which the car is smashed to pieces. In general, it isn’t considered a good idea to associate your product with injury and death, which is why car companies would rather not talk about it.

According to IIHS, the driver of the Bel Air would have been killed instantly. The driver of the Malibu would have survived with an injured knee.

So when you’re thinking about health care reform and wondering who is looking out for your interests and those of your family, or you hear somebody say that government regulation never does any good, ask yourself this: Which car would you rather drive?


6 Responses to “Driving a Point about Health Care Reform”

  1. david kadow says:

    Bruce. Great correlation here. The tipping point being when “a” company realizes and markets the value of compliance relative to its peers. Once that point is attained, then it becomes a horse-race for all companies in the market to out-do each other in “quality of compliance”. That’s the point at which we consumers start seeing real benefit.
    I think such tipping points would come sooner in our various regulated or semi-regulated markets if customers had a greater attention span, and if they actually sought out contrary assessments to their own, in order to make informed decisions and to apply pressure to manufacturers. Instead it seems that most folks fall for the meme, and simply parrot this sound-byte rather than digging-in to research the truth behind the bytes. In the case of our current Health Care debate, those who love Glen Beck only parrot his spew. And the same is true on “our side”…we all would benefit from deeper exploration of positions opposite our own, and exploration of facts rather than marketing. But since there are only so many hours in the day, we consumers rely on responsible journalism to cut through the weeds and reveal the truths. And finding sources for that can be a bit of a chore too.

  2. Bruce says:

    Health insurance isn’t like other consumer purchases. About 60% of Americans are covered by insurance provided by their employer. About 40% of group health is self-insured, with the insurance company acting as administrator by processing payments and managing provider networks. The real customer for health insurance is the employer, not the employee. A generous employer may offer two or three plans (HMO, preferred provider network, etc.). The choice the consumer has is based on what the employer offers as benefits. Less than 9% of the health insurance market are individual policies.

    The overriding determining factor in choosing a health plan (by employers and by consumers) is premium price, and to a lesser degree the provider network. Rarely do health insurance companies tout the speed of claims processing, customer satisfaction or other competitive factors. It’s all about the price. And for good reason, since premiums are increasing about 20% annually. Health care costs have doubled since 2000, and are expected to double again within 10 years. So money is very, very important.

    As with the auto companies, nothing prevents a health insurer from being a good corporate citizen and doing the right thing. At any time, any health insurer could break away from the pack and announce that they will no longer exclude pre-existing conditions or engage in rescission — the practice of dropping people when they get sick. The company that does this will have to raise its premiums by necessity and put itself at a severe competitive disadvantage. I just don’t see companies and consumers flocking to a health insurer that acts morally and ethically, but is more expensive. When the chief executives of three large health insurers testified before Congress last June, each one of them refused to voluntarily commit to ceasing rescission (http://tinyurl.com/yaenwtj).

    Government regulation is needed when there is no financial or other incentive for a corporation to do the right thing. A corporation won’t be browbeaten into cleaning up its emissions or ceasing deceptive advertising, for example. Imposing basic ground rules that apply to all insurers, prohibiting exclusions and rescission, etc., levels the playing field and allows companies to compete on price. In short, this is one of those things that health insurers won’t do on their own. Occasionally, some things have to be forced because it’s the right thing to do.

  3. Mark says:

    Damn, that’s the coolest car ever!

  4. Ken says:

    Video gone – TOS violation.

  5. Craig says:

    I’d much rather have the choice between a cheaper and a safer car, with appropriate insurance (except liability) limitations. My choice is my risk.

  6. Christopher--Atlanta, Ga. says:

    While this was good demonstration of advances in Automobile Safety that was decried from public demand and education through and by Government Regulation, there is vast difference between this and the health insurance correlation that you are espousing. Obvious Health Ins. reform has been needed for a long time. However, there is a critical difference between Government Regulations to prevent the two primary issues of pre-existing conditions and rescission, and the government forcing an individual to buy insurance, or to force me to pay more because another will not buy insurance. This is where I draw the line and there has to be this line. I am not referring to the safety net that we as a society want to provide to those who by no choice of their own need that assistance. There is not conflict here. Putting that aside, the harsh reality is that there are people who will always take advantage of things “given” and those who make the conscious choice to not take care of their own health. Moreover, why should I have to pay more for those that refuse to prioritize and take responsibility for their own life? My opinion is the Obama Administration has crossed the line and now we have a taxation law that I believe no one will want to live with nor will be able to afford. I see this entire health care law imploding in on itself. This is one of the biggest messes I think I have seen the government create next to the “affordable housing act”. Affordable Care…Affordable Housing. Both will have the same fate. (just my humbile opinion)

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