The Whole Foods Alternative to ObamaCare
By John Mackey, CEO of Whole Foods Market
The problem with socialism is that eventually you run out
of other people's money."
—Margaret Thatcher
With a projected $1.8 trillion deficit for 2009, several trillions more in deficits projected over the next decade, and with both Medicare and Social Security entitlement spending about to ratchet up several notches over the next 15 years as Baby Boomers become eligible for both, we are rapidly running out of other people's money. These deficits are simply not sustainable. They are either going to result in unprecedented new taxes and inflation, or they will bankrupt us.
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. 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.
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?
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
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.
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.
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.
Rather than increase government spending and control, we need to address the root causes of poor health. This begins with the realization that every American adult is responsible for his or her own health.
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.
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.
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.
Well if there were ever another reason for me to dislike Whole Foods, their CEO just handed me one. Mr. Mackey, I'd like to take a few moments to first thank you for offering (not on the whole but for the most part) a well-reasoned and earnest policy debate over health care instead of resorting to employing scare tactics and propagating myths in attempt to kill any reform effort. Your acknowledgment (if not your assessment) of the health care and deficit problems in this country enhances your credibility as a worthy debater. However some of your arguments and aspects of your approach unfortunately diminish it. I will respond to your assessment of the problems we face and your proposed solutions or "reforms." But before I do I would like to address a number of aspects of your piece that spurs in me a particularly impassioned response.
Astute raindancers will notice the seemingly blatant politicization of this debate with Mr. Mackey's snide use of the term "ObamaCare" in the title. But I would like to point out that Whole Foods Customer Service, in it's recently issued e-mail clarification of Mr. Mackey's op-ed, explained that while Mr. Mackey's title for his piece was simply "Health Care Reform," an editor at the Wall Street Journal "rewrote the headline to call it "Whole Foods Alternative to Obamacare," which led to antagonistic feelings by many." So I will not direct the following at you Mr. Mackey but to the irresponsible editor at the Journal who felt it reasonable to retitle your piece in such a fashion despite the fact that you never mentioned the President by name. I will take you at your word and assume the editor did not clear such a change with you beforehand.
Dear editor and all others who use terms like "ObamaCare:" This is the President's initiative and he welcomes his name attached to it, and welcomes championing it in the hopes that he may succeed where others before him have failed, provided it accomplishes what he knows must be done to fix our health care system. But let's not play coy; right off the bat, you chose to make this debate political in nature, not just practical. I will be one of many to say that I trust "ObamaCare" will do more to curb costs and benefit consumers than any form of smiley feel-good Republican-offered "let the free market win" NewtCare.
Sir, if the (supposedly unauthorized rewritten) title of your article doesn't reveal your overt politicking, the high-brow smugness of your chosen quote tips your hand. The one-liner sure has a nice sort of wise-crack wisdom to it, doesn't it? It reads as if it belongs on a bumper sticker. Nevermind that Mrs. Thatcher was (quite sagely) describing her socialist political opponents well to the left of what is considered viably left in this country. Nevermind that you and the rest of the frenzied opposition have usurped the meaning and use of the word "socialism" to describe nearly everything this President has proposed that doesn't include a tax cut delivered on a flat-bed Chevy hand-wrapped in an American flag. The more you use this word as a political prop the more silly and uneducated you sound.
It seems you would consider every single redistributive initiative by the government a form of socialist tyranny. Like how the taxes you pay from the highest income bracket go towards paying the temporary unemployment benefits of the thirty-one year old single mom Acme lays off during an economic downturn while she's applying for a part-time job at Whole Foods. Or how your tax money pays for after school programs for the kids down the street so they receive more care, attention, exercise, and schooling while their mom is out later looking for work; programs that perhaps help to steer them towards employment at a Whole Foods while keeping them out of troublesome activity such as loitering outside of say, Whole Foods, scaring away business. Or how your tax money is used to provide hefty (and in my opinion overly generous) subsidies to large farms across the country so that Whole Foods may purchase crops at lower prices and thus turn higher profits. Or perhaps the utmost form of Marxist oppression comes in the form of your taxed CEO salary going towards funding for a new road, park, street lights, and parking space in a quasi-urban community. This Soviet-style wealth redistribution effort just might result in increased property values, increased wealth, and decreased crime, rendering conditions ideal for the grand opening of a Whole Foods grocery store to service the yuppie socialists er sorry, socialites who carry their retail alliegances on their sleeves and who swear by your vegan-friendly
Alaffia antioxidant shea butter (available at all locations).
Sir, do not mistake my criticism of your misuse of the concept of socialism for a defense of the same. I no more empathize with this anti-American, human-subverting form of economic misthought which we fought (and beat) yesterday than I do with anti-American human-subverting terror-inducing extremism which we fight today. Socialism is degrading and reductive to the human spirit and its potential, not to mention entirely irreconcilable with the principles this country was founded upon. And it is for this very reason that I will not sit idle and quiet while people of your stature who ought to know better toss around a word that breeds more than healthy skepticism and doubt but dangerous fear and anger. Many before you used the same sticker to label Roosevelt, Truman, Kennedy, and Johnson, and each of their accusations was hyperbolic and irresponsible. These were men who understood, as did many of their learned conservative counterparts, that government intervention and regulation in markets can be a positive, corrective force while government inattention and inaction can yield inequalities and disequilibriums that are corrosive to the overall strength and well-being of the nation's citizens and its economic system. For every one of your bumper-ready slogans railing against the evils of socialism, facism, communism, or whichever is the "ism" du jour, there exists behind it a hollow and desperate attempt to villify those with whom you share honest disagreement through the reckless distortion of the facts. And enough is enough.
Now that I've gotten that out, I will address your points:
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.
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.
Excellent point. Obesity is at epidemic levels in America today. This is becoming a huge strain on our system and is unsustainable. And I'm glad the CEO of a major food provider is cognisant of these facts.
[Current and projected future] deficits are simply not sustainable and they are either going to result in unprecedented new taxes and inflation or they will bankrupt us.
D'accord.
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 moves us much closer to a complete governmental takeover of our health care system.
Annnd there you go. Sir, you clearly oppose new taxes being proposed to pay for health care reform, yet insinuate that the current reform package being considered is "unfunded?" It does not follow. This reform package will be paid for in full with a combination of delivery reforms, Medicare Advantage cuts, enhancing the government's ability to detect and deter fraud and waste, and yes, new taxes (teabags now on sale at participating Whole Foods!). And the reduction in insurance premium and health care delivery costs that will result from reform will create savings for the future, therefore reining in wild entitlement spending which you have highlighted. You cannot accuse the President or the Congress for attempting to drive another unfunded government initiative like the fiscally conservative deficit-hawk Republican Party did when it created Medicare Part D. If you acknowledge the need for a better health care system, you must acknowledge a price for it.
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.
Neither has the "right" to sleep safely at night. But here's what has existed nearly as long as this country: "We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."
Section 8 of the document ordained with the above preamble states "The Congress shall have Power To lay and collect Taxes, Duties, Imposts, and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States."
I for one have never believed that all Americans should have equal, comprehensive, complete, and thorough health insurance. But I do believe strongly and resolutely that all Americans should have access to affordable, quality health insurance, should never be dropped or denied because they are or were at one time too sick, should never lose coverage if they lose their job, and should never go broke to get healthy again. I believe in these things and others because I believe in forming a more perfect Union by promoting the general Welfare of the people.
For more on this, I yield the floor to Mr. Ezra Klein. Klein
writes "If you have more money, you shop for food on your own. And if you have a lot of money, you shop at Mackey's stores. That's pretty much the model we're looking at in this iteration of health-care reform. We're also laying down some rules so grocery stores -- excuse me, health insurers -- can't simply refuse to sell you their product, or take it away after it's already been purchased."
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.
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.
That's all very unfortunate (especially for my Canadian cousins who have their likes and dislikes about their system) though entirely irrelevant in this debate. Why? Because unlike what you wish to believe so ardently, the current health care reform proposal on the table will not result in a socialized, Canadian-style, government-owns-the-hospitals national health service. I know you want this to be the case so that you can effectively scare the living crap out of people with the horror story you detailed above. But the fact of the matter is proponents of health care reform have offered a uniquely American, private-public solution to a uniquely American private-public problem. Any talk of "CanadaCare" coming to the United States is absurd. The private sector will continue to drive the health insurance industry. The government's presence in the market seeks only to drive down costs by spurring competition, imposing regulations, and offering incentives to alter individuals' and providers' behavior.
1. 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.
High-deductible plans such as the one you've described and offer your employees succeed in keeping premium costs low and work great. That is if you're generally pretty healthy, don't need regular prescription drugs, don't have many or any pre-existing conditions, don't need more thorough coverage, and can afford to pay high out-of-pocket health care expenses to the tune of $2,500 a year. So basically, if you're a young, healthy twenty something working 30 hours at Whole Foods to pay your way through law school, this plan isn't awful. But should you need to refill your prescription for your blood medicine to treat your heart condition, things are a bit different under this plan. The money set aside in one's HSA must certainly be spent, as you put it, "carefully." With such a high deductible, it's possible and probable that people will in this case not seek proper medical treatment for illnesses or conditions they may deem minor or "livable" in order to save money for the "big" problems. People who forgo basic preventative care or choose to live with a health problem rather than seek medical treatment are not healthier people. As you said in an
interview, high-deductible plans mean employees "have to think twice about going to the emergency room for a hangnail in the middle of the night." Recall the infamous "take a pill" line and the right-wing bludgeoning the President took over it. He was talking about the need to encourage more end-of-life counseling to determine the kind of care seniors would like to receive in the event of serious illness and was advocating for comparative effectiveness research to determine which treatments actually make grandma healthier and which will not in order to curb costs both private and public. You are talking about a plan that will force employees to determine what is in fact "necessary" care based on a financial disadvantage. While this might reduce the number of late-night hangnail cases in emergency rooms, couldn't it also be called a form of "rationing," sir? High deductible plans may work for the young and healthy members of the Whole Foods team but they force those with more thorough care needs to pay hundreds and thousands of dollars in preventative, prescription, and premium costs. Silver bullets these plans are not, and while I know you do not suggest as much, these plans only cater to a very specific demographic that is unlike the majority of Americans.
2. Change the tax laws so that that employer-provided health insurance and individually owned health insurance have exactly the same tax benefits. Right now employer health insurance benefits are fully tax deductible for employers but private health insurance is not. This is unfair.
I'm not quite sure what you mean here. Employer provided insurance is tax exempt and individual insurance is not. You are proposing both enjoy the same tax benefits. I don't know if you mean to tax employer based insurance (a position held by Senator John McCain and one that I have recently come around to but one that the President has effectively taken off the table given his pledge to not raise taxes on individual incomes $250,000 or lower) or if you mean to exempt individual insurance from taxation. I will assume, given your indicated sensibilities, that you intended the latter. If so, this will have to be met with significant spending reductions in order to make this proposal "deficit neutral" as I'm sure you'd so desire, lest the deficit become even larger.
3. 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 health insurance wherever we live. Health insurance should be portable everywhere.
In theory, I'm right with you. In practicality, not so much. Allowing for the sale of health insurance across state lines would have already been done if it could be done easily. It would clearly be in the interest of insurance companies to sell services across state lines. But why aren't they allowed such mobility? Well, each of the 50 states in the union have different laws and regulations pertaining to the sale of insurance. Opening the sale of insurance across these lines would create great confusion for consumers, especially individual buyers, who would have to sift through scores of regulation law to find the best deal (theoretically consumers could rely on a third party service vendor to do this work on their behalf. But of course, this would come with a price its own). Health insurance companies could easily set up shop in states that have the loosest insurance regulations and offer low-cost, low-coverage plans across the nation. Young and healthy people will surely buy these plans, since most in these demographics don't think they'll need more thorough coverage. What will result is the sicker, older population seeking insurance will gravitate to more comprehensive and expensive plans, raising the cost of premiums for all in this demographic. Kansas Insurance Commissioner and former president of the National Association of Insurance Commissioners Sandy Praeger
opposes the sale of insurance across state lines, saying the "race to the bottom" that will inevitably result from such a change would result in plans that offer “very few consumer protections" which "don’t cover the benefits that people need."
I agree that health insurance should be portable. That's why I believe if one should choose to change jobs or if one should lose his or her job, one should never have to worry about losing his or her coverage. Simple.
4. Repeal all government mandates regarding what insurance companies must cover. These mandates have increased the cost of health insurance many billions of dollars. What is insured and what is not insured should be determined by individual health insurance customer preferences and not through special interest lobbying.
By gosh, I certainly agree with that last sentence. But surely a man of your stature is not naive enough to think this can be accomplished by simply trusting insurance companies to do the "right thing" by the customer? What insurance companies must cover is either determined by the insurance company itself or by the legislator who is lobbied by the insurance company. The former process is effortless. In the latter scenario, I'm willing to at least allow for aggressive lobbying rather than accept the goals of this lobbying effort as fait accompli. Government mandates might be excessive in some cases in that they may address
recurrences instead of risks. But these mandates were created in the first place because insurance companies refused to cover expensive treatments for expensive diseases, leaving even the moderately secure family to suffer financially. Mandates on coverage prevent even the well-to-do from going bankrupt just because they became seriously ill.
5. Enact tort reform to end the ruinous lawsuits that force doctors into paying insurance costs of hundreds of thousands of dollars per year. These costs are ultimately being passed back to us through much higher prices for health care.
100% positively agreed. Let's do it. I know a former half-governor endorsed the idea on the Facebooks. But where are the House and Senate Republicans on this? Where is the leadership from the Republican brass? Instead of allowing an unemployed moose hunter to tweet on their behalf about Chairman Obama's death panels, why not demand that any reform package (and they do support a reform package, so they say) that comes out of Congress include this crucial ingredient of true reform?
7. 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.
Wow, I've seen quite a few passes in my day, but this is just egregious. Care to follow up there? Offer up some details? See here's the rub: conservatives will persistently (and rightly) sound the alarm over the exploding costs of entitlement programs like Medicare. But when it comes to making some hard choices concerning Medicare, conservatives have so far resorted to accusing the President of advocating for assisted suicide for elderly folks to curb costs. The President has proposed cutting $500 billion (some from waste and abuse, some from eliminating pointless government subsidies to private insurance companies through Medicare Advantage, some from delivery reforms, but none from cuts to entitled benefits) out of Medicare and redirect that money to pay for the upfront costs of reform that will bring down delivery and premium costs in the long-term (such as electronic medical records). Some Democrats and yes, even many Republicans favor offering increased funding for long-term and transitional care services like home nurses for seniors that will help reduce the billions of dollars wasted by Medicare through far more expensive unnecessary institutionalized care and the rehospitalization of seniors within thirty days of their initial visit (a figure that stands at around 18-20% on average, according to AARP). Rather than acknowledge the tough choices needed to reduce the cost of Medicare, Republicans have decided instead to scare old people. It's exactly what the Republicans accused the Democrats of doing to President Bush's plan to partially privatize Social Security. While the Democrats rightly opposed a bone-headed reform plan, they didn't offer any better ideas, and the problem remained unsolved. Well sir, where's the better plan? Or will you use Washington-speak to wiggle out of the details when it comes to "Medicare reform?"
8. 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.
Ah, beautiful. Just let all those rich folk make "donations" to pay for cancer treatments for the middle class. Sir, I don't know anything about your personal history nor do I have any knowledge of your roots and how humble or privileged they were. But this last point sounds as if it comes from a man who will never have to watch a loved one suffer from a treatable yet terribly expensive disease because they cannot afford to meet such dreadful costs. You may never have to suffer the indignity of re-mortgaging or perhaps even selling your own house just so you can pay for your child's radiation treatments. And for those reasons you may never realize why treating the case of a dying, uninsured family member who cannot afford to get better as if it were some kind of charity that people can simply feel good about "donating" to is horribly, despicably insulting. Why don't you start doing the "right thing" and place donation boxes in every Whole Foods store in the country? I'm sure you'll have enough to save a grandma somewhere.
I thank you once more Mr. Mackey for answering the President's call for a rigorous debate on this important issue. I also admire (though I'm sure your shareholders may have reservations) your willingness to speak your ideas boldly with the knowledge that in doing so you would undoubtedly alienate and/or offend many in your consumer base. For my part, more so because your competitors are located closer to me than any concern of mine over your company's profit margins, I'll be buying my butter at other fine food market establishments. One can only hope their CEOs choose as well to stand up and defend America against the evils of isms.
Step into the rain: secondrain.blogspot.com
Dole accurately assesses the state of play on health care reform with the sage wisdom of having spent over three decades playing the game himself in Washington. He makes a strong case for the White House to do what I'd wish they'd done all along; introduce a White House resolution that establishes exactly what the President wants in his reform package and allows the debate, which has so far been errant and unfocused due to the confusing, "choking" array of legislative drafts by various congressional committees, to center around the President's central tenets of reform.
