Because most philosophies that frown on reproduction don't survive.

Thursday, August 13, 2009

Whole Foods Health Care

Whole Foods is headquartered here in Austin, TX, and I know a fair number of people who've worked there. The general consensus seems to be that it's a good company to work for (so long as you're comfortable with the "crunchy" culture) with especially good benefits for a food retail chain. So I was interested to see a piece in yesterday's WSJ by Whole Foods CEO John Mackey advocating an approach to health care reform more similar to the benefits Whole Foods provides its employees. Although Whole Foods is seen as a progressive employer, Mackey's suggestions are more along the lines of what innovative libertarians and conservatives have suggested for health care reform. (If the GOP scores a tactical victory in staving off the many bad ideas in the current health care reform proposal, one hopes they will exert themselves to actually bring something to the table this time, perhaps along these lines.) Extracting his main proposals:
Here are eight reforms that would greatly lower the cost of health care for everyone:

• 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.

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.

• Equalize the tax laws so 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.

• 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.

• 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.

• 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.

• 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?

• 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.

• 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.

On a side note: Aside from equalizing the tax benefits of individual and employer health insurance, is there any reason not to provide incentives for "voluntary solidarity organizations" (to attempt to coin my very own "social justice" term) to provide health insurance in the same large-pool way that big employers do?

For example, at the Fortune 100 company I work for, we have a choice of two insurance companies (Aetna and Humana) and several different plan options within each company. Everyone in the family is covered regardless of medical conditions, and the prices are based on the overall company population. Now, if I had the option to instead sign up the my parish, or better yet (larger pool) my diocese, or through the Knights of Columbus or some other Catholic organization like that, I'd be happy to do so -- even if the cost was a little bit more. (I know that the life insurance I have through the Knights is roughly in line with market prices, but I didn't worry about whether it was the lowest because there were non-monetary reasons for working with them.) Having an insurance pool administered by the diocese or the Knights would also provide an obvious mechanism for giving people who couldn't afford coverage lower costs, while making that up through donations from members willing (indeed, eager) to help cover the less fortunate.

I believe there would have to be some different regulations in place to support that kind of thing (right now, it's all pointed towards employer-funded care with a very small number of people covered individually, often under rather unattractive terms) but is there a practical reason it wouldn't work well? Perhaps combined with a trend towards a HSA/High Deductible Insurance type of insurance?


Lisa Stone said...

I think Mackey made a mistake voicing his opinion.

Bernard Brandt said...

While there is a bit of overlap between your proposals and mine, I would suggest that you also read my 'modest proposal':

That said, I think that a good number of the things that you suggest would be head, shoulders, belly, and groin above what I have so far read in the House Bill on Health Care reform (250 pages and counting).

Marie said...

What would stop voluntary associations is sticker shock.

The overwhelming majority of folks out there haven't the slightest clue how much their employer is paying for their health insurance. On COBRA, my family is paying $1100 a month. That's what our employer paid before. I talk to people who can't believe how much more expensive my premiums are than theirs, they can't work it into their minds that their premiums are the same or often more, it's just that somebody else has been paying them for years.
So if I see what is being paid, and pay $1800 for premiums and $6000 for deductibles and $2000 for out of pocket each year and I'm making under $60,000 a year, I'm likely to balk at paying even 10% more to sign up with the diocese instead of my employer. Maybe I'll do it anyway, but the fewer people who sign up the more expensive for each family who does.
So unless it's part of an overall plan like the one you detail above, your voluntary associations are going to have a rough go of it.
Nice if you can make it work, though.