Weeks ago (maybe months, the time is passing so quickly!) a Facebook friend approvingly linked to the notorious John Mackey editorial piece published in the Wall Street Journal. You will recall that Mr. Mackey is the virulently anti-union CEO of Whole Foods, Inc. His editorial piece was lauded by opponents of meaninful health care reform as an alternate way forward. Naturally, I had to write my FB friend and tell him that I strongly opposed most of the arguments in the editorial. I promised a detailed rebuttal.
Real life intervened in a big way, but I did finally finish my rebuttal, and while the Mackey ship has sailed in our part of the world (and has nearly completed its circumnaviation) I thought it might be useful if I posted my rebuttal here.
The original editorial is in italics, my comments in this typeface. It's rough around the edges (real life intervened while I was working on this, and I didn't have a chance to finish it) but I think you'll find it informative.
The Whole Foods Alternative to ObamaCare
And right off the bat, he starts with the inflammatory framing. You can see where this is going.
While we clearly need health-care reform, the last thing our country needs is a massive new health-care entitlement that will create hundreds of billions of dollars of new unfunded deficits and move us much closer to a government takeover of our health-care system. Instead, we should be trying to achieve reforms by moving in the opposite direction—toward less government control and more individual empowerment.
Right. Because look at how well the so-called "magic of the marketplace" has worked for health care in this nation. Less regulation? The major health care companies would spend their billions on mergers, acquisitions, CEO salaries, and the like while screwing ordinary Americans out of coverage--just as they have been doing, and will continue to do without meaningful reform.
Here are eight reforms that would greatly lower the cost of health care for everyone:
Yes, let's do. As we used to say in the Navy, stand by for a broadside.
•Remove the legal obstacles that slow the creation of high-deductible health insurance plans and health savings accounts (HSAs). The combination of high-deductible health insurance and HSAs is one solution that could solve many of our health-care problems. For example, Whole Foods Market pays 100% of the premiums for all our team members who work 30 hours or more per week (about 89% of all team members) for our high-deductible health-insurance plan. We also provide up to $1,800 per year in additional health-care dollars through deposits into employees’ Personal Wellness Accounts to spend as they choose on their own health and wellness.
Ah, high-deductible health insurance plans--just thinking of them makes me a jolly good fellow. (NOT) Let's start with the basic concept: the "savings" in "health savings accounts". By its very nature an HSA requires the participant to start a savings account. The home finance experts tell us that everyone should have one, in theory, but as anyone who has lived on the wages offered by Whole Foods can attest, it is very difficult to pay the bills and start any form of savings on $13.75 an hour, let alone wages lower than that. A young employee in excellent health, who may only need to see the doctor once a year for an annual checkup, can arguably benefit from HSA, if he or she stays in good health and nothing happens. The problem is, stuff does happen. Chronic conditions can manifest themselves later in life, or an accident may happen that necessitates hospitalization. Then our $13.75-an-hour employee is suddenly responsible for his part of the medical bills, and I can tell you from personal experience that $1,800 is just a drop in the bucket if hospitalization is involved!
I mention this from personal experience. I had to put Nancy in the hospital last year, just weeks after purchasing our high-deductible plan, due to unrelenting and severe abdominal pain. Thankfully, the attending MD in the emergency room correctly diagnosed her condition (Crohn's Disease) and she was treated appropriately over the weekend in the hospital. I have no complaints about her care--but the bills were another story. By my calculations we were left with almost $7,000 in bills, between meeting our deductible and paying our percentage for hospitalizations and procedures. Even on a professional's salary, that's tough going. I ended up using my vacation time from my regular job to work relief at another clinic, instead of using vacation time for, well, vacation. With all that, we're still the lucky ones, because we could keep up with our bills. Now think again about our $13.75/hr Whole Foods employee, and consider if they could manage this. Odds are, they can't.
Money not spent in one year rolls over to the next and grows over time. Our team members therefore spend their own health-care dollars until the annual deductible is covered (about $2,500) and the insurance plan kicks in. This creates incentives to spend the first $2,500 more carefully. Our plan’s costs are much lower than typical health insurance, while providing a very high degree of worker satisfaction.
Except that when Whole Foods moved their employee's plans entirely to high-deductible/HSA, there was quite a bit of resistance and anger. Of course, with Mr. Mackay being virulently anti-union, there was no union, and thus organized opposition, to push back against this plan.
•Equalize the tax laws so that that employer-provided health insurance and individually owned health insurance have the same tax benefits. Now employer health insurance benefits are fully tax deductible, but individual health insurance is not. This is unfair.
It seems unfair, and my first instinct was to agree with Mr. Mackay--this would have been the one thing we agreed upon--but on reflection, even a tax savings from being able to deduct health care premiums would not offset the annual rise in health care premiums, which have been rising much faster than the rate of inflation for the past decade. That rise in health care premiums is effectively a rise in taxes for all of us who have to pay all or part of our coverage.
•Repeal all state laws which prevent insurance companies from competing across state lines. We should all have the legal right to purchase health insurance from any insurance company in any state and we should be able use that insurance wherever we live. Health insurance should be portable.
I remember when I worked for Banfield, the Pet Hospital, a national practice based in Portland, that they wanted to start a national pet insurance program, and they went so far as to develop a brand and a logo (spending millions in the process)--only to come afoul of insurance boards and their differing requirements in each state. Getting 50 states to repeal their laws is unrealistic in the extreme, but I think encouraging streamlining of state requirements and ensuring that, at a federal level, that insurance is portable is a worthy goal.
•Repeal government mandates regarding what insurance companies must cover. These mandates have increased the cost of health insurance by billions of dollars. What is insured and what is not insured should be determined by individual customer preferences and not through special-interest lobbying.
OK, so let's throw everyone that has heart disease, diabetes, epilepsy, Crohn's Disease, and any number of other chronic conditions to the curb and not cover them. That's already happening now in the for-profit medical insurance industry. The only way that these conditions will be covered by private insurance is to mandate by law that they be covered, even if they are pre-existing conditions. Whenever we've had to do anything dealing with Nancy's condition, my first concern has been for her--but a very close second has been, how much will insurance cover, and will they even cover it at all? It's not a good way to live.
•Enact tort reform to end the ruinous lawsuits that force doctors to pay insurance costs of hundreds of thousands of dollars per year. These costs are passed back to us through much higher prices for health care.
Ah yes, the magic of tort reform. AARP quoted a Congressional Budget Office study showing that if tort reform was enacted on a national basis, the overall savings in health care costs to the consumer would be......1/2 of 1 percent, or statistically insignificant. Minnesota has tort reform, and is the home of the world-renowned Mayo Clinic, in Rochester. The Mayo Clinic has one of the lowest Medicare reimbursement rates in the nation, at $6,688 per person on average in 2006. By contrast, McAllen, Texas, another state with strict tort reform laws, has the second-highest federal reimbursement rates for Medicare, amounting to about $15,000 per person--and this is in a state that passed tort reform limiting pain and suffering awards to $250,000. I would add that the Mayo Clinic, at less than half the average medical spending of McAllen's medical facilities, is getting better patient outcomes. In the end, the cost savings being seen at the Mayo Clinic (and in the Grand Junction area of Colorado) is due much more to the medical culture in those areas, which are evidence- and outcome-based, than in McAllen, which appears to have a culture of graft and corruption with certain practitioners and facilities.
•Make costs transparent so that consumers understand what health-care treatments cost. How many people know the total cost of their last doctor’s visit and how that total breaks down? What other goods or services do we buy without knowing how much they will cost us?
I would be fine with that for myself, but I have medical training, so could pretty much figure out what those designations are on the itemized list. The average person cannot, so I don't see how this would help most people.
•Enact Medicare reform. We need to face up to the actuarial fact that Medicare is heading towards bankruptcy and enact reforms that create greater patient empowerment, choice and responsibility.
Meaning go high-deductible with Medicare, just when the demographic (65 years and up) needs medical care the most, and has the least amount of disposable income to pay for it. This is a brilliant idea, and I can't wait to get on board with it. </snark> Reform the whole system, and Medicare will be taken care of.
•Finally, revise tax forms to make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance and aren’t covered by Medicare, Medicaid or the State Children’s Health Insurance Program.
Oh sure, that will be a big help, when most everyone is stretched out to the limit just taking care of themselves and their families. Americans are very generous and giving as a rule, but as we have seen with the most recent economic downturn, charitable giving goes down significantly in a recession or depression, just when the services that the charities support are needed most. It would be much better to have these services available to the public in the first place.
Many promoters of health-care reform believe that people have an intrinsic ethical right to health care—to equal access to doctors, medicines and hospitals. While all of us empathize with those who are sick, how can we say that all people have more of an intrinsic right to health care than they have to food or shelter?
I would put health care on an equal footing to the right to food and shelter.
Health care is a service that we all need, but just like food and shelter it is best provided through voluntary and mutually beneficial market exchanges. A careful reading of both the Declaration of Independence and the Constitution will not reveal any intrinsic right to health care, food or shelter. That’s because there isn’t any. This "right" has never existed in America.
It is true that health care is not mentioned in either of these documents. The Founders did state that the government is to provide for the general welfare; one can argue, that given the state of medicine in the late 18th century, that not including health care in the mix was arguably providing for the general welfare. We're obviously not practicing 18th century medicine now, and given the proven benefits of offering preventive care at the very least, it would seem to me that a universal health care system would certainly fit in with providing for the common welfare. Opining that this or that isn't in the Constitution or the Declaration has too often been a catch-all statement of opposition from conservatives to any social program, especially those that might benefit all.
I would also add that existing social programs such as Medicaire and Medicaid, which, by the way, are government-run, single-payer health care systems, have been in operation for over forty years without a significant Constitutional challenge. This would indicate that these systems pass Constitutional muster, and thus a widening of health care coverage for all Americans is possible under our system.
Even in countries like Canada and the U.K., there is no intrinsic right to health care. Rather, citizens in these countries are told by government bureaucrats what health-care treatments they are eligible to receive and when they can receive them. All countries with socialized medicine ration health care by forcing their citizens to wait in lines to receive scarce treatments.
Pop quiz: how many of you have gotten in to see a surgeon or specialist right away for a non-emergency procedure? Show of hands? Guess what--specialists in our nation are usually heavily booked and waits of weeks or even months are common under our system. Mr. Mackay provides no context for this statement at all, which is obviously intended as a smear of the other nations' systems.
Although Canada has a population smaller than California, 830,000 Canadians are currently waiting to be admitted to a hospital or to get treatment, according to a report last month in Investor’s Business Daily. In England, the waiting list is 1.8 million.
I assume this is the same Investor's Business Daily who hilariously opined that Stephen Hawking "wouldn't have a chance in the U.K., where the National Health Service would say the life of this brilliant man, because of his physical handicaps, is essentially worthless." Dr. Hawking, in fact, is a British subject who has benefited greatly from the nationalized health care system in Great Britain: "I wouldn't be here today if it were not for the NHS," ... "I have received a large amount of high-quality treatment without which I would not have survived." It would seem that IBD was more interested in pushing an anti-health care reform agenda that doing the most basic research on the editorial, which makes me question the both the numbers and the context of reporting that Mr. Mackay so approvingly is quoting.
The British, in fact, are so dissatisfied with their health care system that Atlanta Journal-Constitution blogger Jay Bookman, in response to a query about the NHS, recieved Tweets such as the following:
" I’m alive because of the NHS. I doubt I would be if I had to pay for the treatment I recieved."
"'[I] went private when I was rich, used NHS when I’ve been poor. No diff in level of care whatever. Happy to pay taxes for it."
"Way the go guys! Rooting for the NHS deserves a thumbs up! The NHS does a brilliant job day in and day out"
Yep, the Brits truly hate their nationalized health care system, which, by the way, was promoted and protected by PM Winston Churchill, who was many things, but was most certainly not a liberal! Recent criticism of NHS with regard to the silly IBD editorial has elicited pushback from the leaders of both major political parties in Britain--and yes, that includes Margaret Thatcher's Tories.
At Whole Foods we allow our team members to vote on what benefits they most want the company to fund. Our Canadian and British employees express their benefit preferences very clearly—they want supplemental health-care dollars that they can control and spend themselves without permission from their governments. Why would they want such additional health-care benefit dollars if they already have an "intrinsic right to health care"? The answer is clear—no such right truly exists in either Canada or the U.K.—or in any other country.
I'm not sure what planet Mr. Mackay resides on, but access to health care has been a right of all citizens in the U.K. and Canada since the inception of their state-run medical programs. The other industrialized nations have made health care for all of their citizens a priority as well.
Unfortunately many of our health-care problems are self-inflicted: two-thirds of Americans are now overweight and one-third are obese. Most of the diseases that kill us and account for about 70% of all health-care spending—heart disease, cancer, stroke, diabetes and obesity—are mostly preventable through proper diet, exercise, not smoking, minimal alcohol consumption and other healthy lifestyle choices.
Again, he cites a statistic that is unsubstantiated; if diet could fix everything, don't you think everyone would be doing it? There are plenty of people who do everything right--good diet, exercise, no smoking, minimal to no drinking--who nonetheless come down with diseases from the list he gives above. It is true that conditions such as obesity can predispose a person to heart disease and type 2 diabetes, but much of the obesity epidemic, particularly for poorer Americans, can be attributed to poor access to nutritious foods. Read on:
Recent scientific and medical evidence shows that a diet consisting of foods that are plant-based, nutrient dense and low-fat will help prevent and often reverse most degenerative diseases that kill us and are expensive to treat. We should be able to live largely disease-free lives until we are well into our 90s and even past 100 years of age.
Mr. Mackay makes a good point about personal responsibility in maintaining our own health; I will give him that. But again, he preaches "responsibility" from the standpoint of being able to afford the very foods he touts as being beneficial to a healthy lifestyle; the way the food system is set up in this nation, (and especially at Whole Foods, which has derisively been called "Whole Paycheck" more than once due to its high prices) it is much more costly to buy fresh produce, meats, and unprocessed foods than the preprocessed stuff, and guess what, the rates of obesity in this nation roughly correlate to the relative wealth of the individual states--meaning the poorer states have more obese people than the wealthier ones. Improving access to good food, and improving things such as education in nutrition and physical education would go a long way to fixing the obesity epidemic. "The magic of the marketplace" certainly hasn't done it.
Health-care reform is very important. Whatever reforms are enacted it is essential that they be financially responsible, and that we have the freedom to choose doctors and the health-care services that best suit our own unique set of lifestyle choices. We are all responsible for our own lives and our own health. We should take that responsibility very seriously and use our freedom to make wise lifestyle choices that will protect our health. Doing so will enrich our lives and will help create a vibrant and sustainable American society.
Pretty much that's what we've been advocating with the strong public option. Status quo is unacceptable, as Mr. Mackey states, but his solutions strike me as wrong-headed, and would add to the problems, rather than solve them. Government CAN do things right, and we need for them to.