Innovating Toward Health Care Reform, the Whole Foods Way

With the health-care debate bogged down in mindless town hall confrontations and the President reassuring us his plan for health care reform will work—just as soon as he creates it—where can Americans turn for innovative ideas in health care? Having organically grown his business from a failing granola shop in Austin into a nationwide phenomenon, Whole Foods CEO John Mackey knows a thing or two about running a solvent business while taking care of his people. And when it comes to health-care reform, Mackey says, the President and Congress are moving in the wrong direction.

"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," Mackey wrote in this morning's Wall Street Journal. "Instead, we should be trying to achieve reforms by moving in the opposite direction—toward less government control and more individual empowerment."

So how would President Mackey empower the people? For one, he writes, make it easier to create high-deductible insurance plans and health savings accounts. At Whole Foods, the company pays 100% of premiums for all employees working 30 hours per week or more (89% of them). Employees also receive additional dollars to be spent on their own health, up to $1,800 per year, in a Personal Wellness Account that rolls over each year if unused. But the annual deductible for the plan is high—about $2,500 dollars—creating an incentive for employees to spend their health dollars wisely. The plan's costs are low, the employees are satisfied, the care is excellent, and the waste is minimal.

Institutional inefficiencies also plague the current system. Employer benefits are tax-deductible, while individually owned plans are not, an incongruity that makes owning one's own plan far more daunting. State laws that prevent insurance companies from competing across state lines make most insurance non-portable. Government regulations mandating what insurance policies must cover take choice away from the individual and drive costs through the roof, while tort law allows for crippling lawsuits that drive the costs of health care even higher. Meanwhile, Medicare, which never offered much in the way of patient empowerment, hurtles toward insolvency.

By rectifying wasteful government practices that drive the costs of care up while simultaneously easing the creation of high-deductible health plans and health savings accounts, the market can find a middle that offers good care at a rate that won't hamstring the nation with insurmountable deficits. How does Mackey know this will work? He's asked the people. "At Whole Foods we allow our team members to vote on what benefits they most want the company to fund," Mackey writes. "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."

Asking the people; now there's an innovative idea.

[via Wall Street Journal]

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5 Comments

  • Clay Dillow

    The point is, with some government reform in the other direction (that is, government getting out of the health care business, where it is not supposed to be in the first place) costs won't be higher 10 or 20 years from now.

  • John Vasko

    Right, I'm sure all companies will follow suit with Whole Foods and provide $1,800 of personal health dollars with a $2,500 deductible to use their insurance. All companies will do this I'm sure after ready the article in WSJ from the CEO of Whole Paycheck. And what will be the cost 10 years or 20 years from now when costs are even higher than they are now with insurance and pharma companies becoming even more profitable?

    Every time I read something like this, I become sad about the state of the nation we live in. Maybe a leading insurance company can just buy Whole Foods.

  • Scott Case

    John Mackey has an underlying goal here that doesn't seem to be accurately captured in the regurgitation of the WSJ article (and apologies to a fellow Wildcat for that characterization). Two postings from DailyKos (one of which is actually up there as I went searching for the last comprehensive diary on the issue by one of their editors):

    http://www.dailykos.com/storyo...
    http://www.dailykos.com/storyo...

    I'm rather fond of Mackey's quote on unions: "The union is like having herpes. It doesn't kill you, but it's unpleasant and inconvenient, and it stops a lot of people from becoming your lover."

    I'm not union, but still find that to be a rather disgusting use of phrase, especially coming from somebody in the CEO's chair.

  • Linda Flood

    GREAT IDEA. My deductible is twice this one and I pay my own premiums... still a great idea!

  • Jeff Toister

    Great article! Your auto insurance doesn't pay for oil changes and your home owner insurance doesn't pay for a kitchen remodel, so why do we expect our health insurance to pay for everything? The high-deductable, HSA approach creates much more of an incentive for people to actively manage their own health care, shop for the best deals, and maintain a healthy lifestyle.