By David Lazarus

The dismal state of the U.S. health care system will be an uninvited guest at the table when representatives of SBC workers and management sit down this week to attempt to avert a crippling strike.

The talks, to be held at a Pleasanton hotel, will focus to a large extent on whether telecom giant SBC will be able to stick employees with a portion of the company's almost $2 billion in annual health care costs, according to sources familiar with the matter.

SBC's regional contracts with nearly 100,000 employees nationwide expire in April. Officials at the employees' union, the Communications Workers of America, say a strike is virtually certain if SBC tampers with existing medical benefits. Union locals are already signing up workers for possible strike assignments.

For its part, SBC told company managers in a recent internal memo that they must be prepared to take over key operations in the event of a strike. Managers' vacations scheduled for April and beyond have been canceled.

All this rancor could be avoided if the United States abandoned its broken system of corporate welfare and switched instead to a Canadian-style system of publicly funded universal health care.

And that's essentially what labor leaders representing about 30,000 California and Nevada workers plan to tell SBC when the two sides meet in Pleasanton on Thursday.

"Universal health care is the ultimate solution," said Bill Harvey, a union negotiator. "SBC and other major corporations should be fighting side by side with us to tackle health care problems."

Corporate America is gradually waking up to the fact that runaway health care costs are having a devastating impact on companies, workers and customers.

General Motors, the largest purchaser of private health care coverage in the country, spent $4.5 billion in 2002 to insure 1.2 million active and retired workers. That expense in turn is passed on to buyers of GM cars and trucks.

Bill Ford, chief executive of Ford Motor Co., has responded to the increasingly costly problem by asking his company's vice chairman, Allan Gilmour, to study proposals for a national insurance system. But few other business leaders are being as pro-active.

"Ford gave an early cry for help," said Quentin Young, national coordinator of Physicians for a National Health Program, a Chicago advocacy group with more than 10,000 members throughout the country. "Most others have been slow to recognize the importance of this."

That importance can't be overstated. More than 43 million Americans now lack health insurance and account for as much as $130 billion in annual economic losses resulting from poor health or early death, according to the influential Institute of Medicine in Washington.

Meanwhile, businesses and other insurance providers have faced double- digit increases in health care costs for the past four years.

The California Public Employees' Retirement System, one of the largest purchasers of health insurance, raised premiums for its 1.2 million members this year by an average 16 percent.

In SBC's case, union negotiator Harvey said that "there is very little wiggle room" as far as health care goes.

"Health care is clearly the No. 1 concern of our members," he said. "It's the biggest and most powerful strike issue."

Attempting to keep workers' tempers in check, SBC told employees last week that the company has promised union leaders it will continue providing health benefits even during a strike. The union in turn said it would give 30 days' notice before any walkout.

Walt Sharp, an SBC spokesman, declined to comment on the company's position on health care before this week's negotiations begin. Similarly, he wouldn't say how SBC would respond to a call from union negotiators for closer cooperation in promoting universal health coverage.

"We're open to all proposals," Sharp said.

Pressed to at least say whether SBC is willing to adopt a leadership role in the business community on this issue, he noted only that the company is a member of the National Coalition on Health Care, a nonpartisan alliance of business, labor and consumer groups.

For its part, the coalition says that the U.S. health care system is in dire need of reform. But it doesn't endorse a specific plan to fix things.

Instead, the group says it will present a series of options to lawmakers next month, ranging from creation of a national health insurance scheme to overhauling the existing system so that coverage can be extended to all.

"We're going to leave the decision to lawmakers and the public," said Pat Schoeni, the coalition's executive director.

In other words, don't hold your breath. Meanwhile, companies like SBC will continue to squabble with employees over health care costs, and employees will continue threatening to walk off the job if their benefits are reduced.

As I've written before, these problems instantly disappear under a national insurance program (along with the squandering of an estimated $400 billion a year on bureaucratic overhead in the health care industry).

Under a proposal championed by Physicians for a National Health Program, a payroll tax of about 7 percent would replace all other employer expenses for medical costs, and an income tax of about 2 percent would replace employees' current insurance premiums, co-pays, deductibles and other out-of-pocket expenses.

This is a workable solution, especially when coupled with regulatory safeguards to ensure quality of treatment and cost controls. Or we can just let relations between companies and their workers keep deteriorating to the point of economic disaster.

Is that such a tough choice?

David Lazarus' column appears Wednesdays, Fridays and Sundays. He also can be seen regularly on KTVU's "Mornings on 2." Send tips or feedback to dlazarus@sfchronicle.com.

©2004 San Francisco Chronicle