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January 20, 2009

Health Care Reform Takes Center Stage for 2009 Proxy Season
    by Robert Kropp

Shareowner advocates at ICCR and other faith-based organizations detail progress in engaging corporations on the adoption of health care reform principles. -- Access to affordable, comprehensive health care insurance is one of the most significant social policy issues in America today. Nearly 46 million Americans, or 18 percent of the population under the age of 65, were without health insurance in 2007.

According to the National Coalition on Health Care, the nation's largest alliance working to improve America's health care, "Most Americans have health insurance through their employers. But, employment is no longer a guarantee of health insurance coverage." Manufacturing industries, traditionally a stronghold of health insurance coverage for employees, are shedding jobs. Because of increasing reliance on part-time and contract workers, fewer workers have access to employer-sponsored health insurance. And many small employers cannot afford to offer health benefits.

52% of the members of the Business Roundtable, which represents more than 150 of the country's largest companies, say health care costs represent their biggest financial challenge.

The Obama administration promises "affordable, accessible health care for all Americans, built on the existing health care system, using existing providers, doctors, and plans." Obama's proposed health care plan requires employers to contribute to workers’ health care insurance and offers small businesses a refundable tax credit of up to 50% on premiums paid by business for employees.

The nearly 300 socially responsible institutional investors at the Interfaith Center on Corporate Responsibility (ICCR), a faith-based coalition representing over $100 billion in invested capital, view 2009 as a year with potential for a breakthrough in health care reform. ICCR and others in the SRI community have urged America's corporations to adopt and publicly embrace principles for health care reform, and by January 2009 the number of corporations that have done so has increased to more than twelve.

The principles for health care reform were formulated by the Institute of Medicine's Committee on the Consequences of Uninsurance in a January 2004 report, which called upon Congress and the president to provide coverage for everyone in the country by 2010. The principles advocate universal and continuous health care coverage that is affordable for individuals and families, and affordable and sustainable for society as well. Health insurance should enhance health and well-being by promoting access to high-quality care that is effective, efficient, safe, timely, patient-centered and equitable.

The corporations that have publicly endorsed the principles for health care reform include Starbucks, Wal-mart and General Electric.

Sponsoring shareowner resolutions and engaging in dialogue with corporate management are two of the methods used by ICCR and other socially responsible shareowner groups to change the way companies conduct themselves as good corporate citizens, and on the issue of health care reform their strategy is no different. In the 2009 proxy season, the number of shareowner resolutions addressing health care reform at major corporations will rise to 26 from 12 in 2008.

The targets of shareowner resolutions include such corporations as American Express, Ford, Qualcomm, Staples and Verizon. A typical resolution asserts that "the 45.7 million Americans without health insurance result in higher costs for US companies providing health insurance to their employees."

Furthermore, "Increasing health care costs lead companies to shift costs to employees. This can reduce employee productivity, health and morale. (Shareowners) also believe rising health care costs borne by the company have an adverse affect on shareholder value."

At a press conference on health care reform hosted by ICCR and held on January 14, Rev. David Schilling, program director for human rights at ICCR, said, "ICCR and other faith-based investors have a history of being ahead of the curve on such important issues as climate change and subprime predatory lending practices. The crisis in health care is a social issue that is negatively impacting business. Health care reform is a moral and a financial issue. It is good for society and good for business."

Cathy Rowan, SRI consultant representing American Baptist Home Mission Society and Trinity Health, said, "Shareholder and public interest are very much aligned on the subject of health care reform. We hope to see representatives of corporations in attendance when Barack Obama signs into law a health care reform bill."

Sister Barbara Aires, coordinator of corporate responsibility for the Sisters of Charity of St. Elizabeth, detailed the precarious financial positions of all but a few hospitals. "We believe that access to affordable health care is a fundamental human right," she said. "We have been witnesses to a health care delivery system that has been unequal and dysfunctional for many years, not only for the people but for the economic fabric of our country. Health care consumes far too much of the Gross National Product."

"Corporations can play a crucial and positive role in the reform of the health care system. That is why we have used our investments to engage them."

Laura Shaffer, director of shareholder activities at the Nathan Cummings Foundation, said, "Because the issue of health care impacts corporate profits, we as shareholders want to be sure that the companies we invest in are positioning themselves in ways that are beneficial to themselves, to their employees, and to society. Corporations ignore the health care reform movement at their own peril. Adoption of the health care reform principles helps corporations position themselves to influence the outcome of this policy debate."

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