My response to John Mackey’s Alternative to ObamaCare

From: John Mackey: The Whole Foods Alternative to ObamaCare –

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.

Just because the $1.8 trillion deficit is mentioned on the same line as Medicare and SS, we should be aware that those two programs are, in fact, healthier than most IRA/401K portfolios and a better alternative to health care packages that are available to now laid off people.

We’ve had some years of warning about the direction of the economy. Instead of heeding those (and there are plenty of economists who were labeled as left-wing hacks for sounding warnings), we chose to increase spending, and decrease taxes.  The deficit was not the result of any health care reform, nor SS or Medicare or any other social programs. And just because we have a deficit doesn’t mean that health care reform shouldn’t happen.  Imagine if we decided to drop our entire Defense program because of the deficit?

Now, in the US, a HUGE portion of our tax dollars goes to defend the country. Do you ever hear that our defense budget is going to go bankrupt? Why not? And since your contribution to the defense fund goes to protect everyone, even the unemployed and the lazy couch potatoes, why do we not rail against socialized defense? Are we going to run out of other people’s money to pay for everyone else’s defense?

The difference is that the two industries, defense and health care, make their profits in different ways. Defense can only survive if the purchases are made by a single payer. You, as a citizen, aren’t going to go through a menu of choices and decide how many missiles you want pointed East, or how many armed people should defend your neighborhood. The decision has to be made by one entity, and those in the defense industry hope that that entity is friendly to their cause, or scared enough to spend your and my tax dollars extravagantly. (Expensive toilet seats, anyone?)

The health care industry, on the other hand, does best when the purchases of health care packages are done by more individuals. In fact, they’d even like it better if they could cut out businesses and go direct to people, because they’d rather not have customers large enough to be educated in the choices and options or who could actually throw their weight around. The fewer people making decisions on which insurance company to utilize, the more the insurance companies have to be competitive. If the government becomes the single-payer, then insurance companies would get squeezed.

Given the amount of profits involved (the CEO of United Heathcare made $3.2 million last year with stock options worth $700M+ and at one point, for every $700 spent on healthcare, he made $1!), you will see a lot of outrageous claims made to scare us from making changes that threaten them.

Now back to defense vs health care. You, me, our parents, siblings, children, are more likely to die of cancer than an attack from Eastern Europe, yet we spend more on combat readiness against Eastern Europe than on eradicating cancer. This year, 250,000 Americans will die of cancer. 65,000 will die of breast cancer, and those are mostly women around and younger than our age. It is a fallacy that we don’t have enough money to fund our health care, when we spend quite a bit per capita, every year, to makes sure bombs don’t fall on us. I say we should treat each death prior to the age of 65 (I picked a random number) as being the equivalent of a victim of foreign aggression or terrorism. How many years of 250,000 person deaths will we put up with if they were dying (horribly, and painfully) because of something that an imaginary country, say, Iraqistan, was doing?

And I’m not even going to get into the dangers of epidemics when diseases fester and go unchecked, and how that disease will seek out everyone, especially successful business people who jet around…

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.

It is sad that the CEO of one of my favorite stores uses these tactics to make his point. First of all, setting aside the context, let’s not mistake supply issues with a program’s merits. I could create a hugely successful toy company, yet be unable to meet the demand, despite profits. There may be waiting lists for my products and customers who actually grow up and move on while waiting to get one. Does this mean that my company is a failure? I probably want to do some fine tuning to make the company better, and reduce my supply – maybe by paying more for that supply.

Canada and England, and many other countries, and to some extent the US, have a shortage of doctors. Doctors in the US have, for at least the past two decades, seen their income shrinking, and it’s not because of health care reform – which hasn’t happened yet – but because of health insurance companies shifting the money from the doctors to their own pockets. When an insurance company denies a claim, the company makes a bit more of a profit, the doctor makes less money and the customer who’s already out the money, has to forgo treatment. The end result is that money that would have made it to a doctor, went into an insurers pocket. Don’t forget, these health insurance companies have been posting multi-billion dollar profits.

To change the supply, we need to pay doctors better. And we need to take those brilliant pre-med and medical students, and give them scholarships or trade their loans for work where the supply is least. The pharma industry could use reform too.

Now, as for stats. 45 million Americans are currently waiting to get insurance coverage, so they could see a doctor instead of waiting till the need is dire and going to an emergency room, risking a bigger infection, or possible bankruptcy from the hospital bills that ensue. That is about 15% of the US population. 830,000 Canadians are 2.5% of their 33,744,000 population. 1.8M British are about 3% of their 61,612,300 population. Now you tell me which stats are better. And keep in mind, there are people in the US with insurance who are waiting to get treatment or admitted to a hospital too. I personally remember a battle my dad had years ago with Kaiser over his treatment. I don’t understand why people seem to think that these things only happen in Canada when we in the US all have had some interaction with insurance companies who have denied or delayed coverage. If our current health care system was perfect or close, then I’d say, “yeah, those in Canada are sooooo screwed!”. Frankly, while I am lucky to have good health care coverage, there are 45 million with no insurance and many of them could use, and be well served by a system like Canada’s.

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

Same with water. Yet we’ve decided as a society that water should be provided in a manner that isn’t meant to profit, or cause hardship. The individuals who work for the water company get paid according to their skillset and local rates. Yet, somewhere along the line we decided that since doctors made a nice chunk of money after years of hard work and study, that we should create a system that would leach off of them and in fact, bleed them and the “customers” dry. There is no intrinsic right to feed off the misfortune of others either. Yet some do it and fight hard to make it seem like they deserve to continue.

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.

Neither does the “right to be terrorism free”. Yet, I bet few of Mr Mackey’s employees want to spend their supplemental dollars on gas masks and kevlar vests. What he doesn’t say is what the employees use those supplemental dollars for. Braces? Full-body scans? Cosmetic surgery?

And yes, even with a future universal health plan in the US, his company could provide the option of supplemental health dollars. Why is that a problem? If basic health care covered the basics, then supplemental health care could provide braces, or removal of unsightly birthmarks, treatment for ED or balding, or… Even today, for someone like myself who has a good health plan, it can take me two weeks to see a doctor. I now hear that there are doctors who charge outside of plans in order to give some patients earlier appointment times. You see, you don’t have to look to Canada to complain about health care. Ours sucks way more.

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.

Those are wise words, as long as all companies can be like Whole Foods, where workers are not getting laid off due to poor business decisions which they had nothing to do with. You see Mr. Mackey, when a company lets someone go, no matter how responsible and wise, that person loses their health insurance. In an economically thriving society, we could expect that person to find another job with similar health care benefits. In the reality of today’s environment that individual may remain unemployed and, that individual, and the individual’s similarly responsible spouse and children, will go uninsured. Personal Wellness Accounts or tax breaks aren’t going to replace the lost health care.

Doing so will enrich our lives and will help create a vibrant and sustainable American society.

One of the biggest challenges to the American society IS the fact that 45 million and more each day go without insurance. Mr. Mackey must have gotten out-of-touch with what American society really is about. In fact, one of the single biggest and fastest rising expenses for corporations is the health care costs. Automakers are citing it as a reason for their impending doom. Our small company has endured year after year of 20%, 30% or 40% rate increases, which we have reluctantly passed onto employees, first as an increase in dependent fees, then in deductibles and co-pays, etc. In fact, for many this increase has negated any tax reductions that they got during the Bush era. And frankly, at small or large companies, it is the healthy who pay for the health care of the others – in other words, “other people’s money” is paying a good portion of a company’s health insurance bill.

Removing the health care dilemma will, in fact, make it easier for more Americans to focus on what they do best: create success and wealth and happiness.

Next up: I respond to a CEO who claims that there is no intrinsic right to education and each child should pay for their own education, instead of having “other people” pay.


~ by mz on August 13, 2009.

Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: