Beware Easy Healthcare Fixes

It is generally accepted that we have a problem with healthcare in this country, but we had better make sure we fully understand the nature of that problem before we start enacting solutions that may exacerbate it. Otherwise we could find ourselves with a patchwork of well-meaning but ill-conceived legislation similar to the so-called Walmart healthcare bill enacted in Maryland last week.

For those unfamiliar with the new law, Maryland now requires any employer with more than 10,000 employees within the state to contribute at least eight percent of its payroll cost to health benefits. If they do not, the difference between what they pay and the eight percent cutoff must be paid into a state fund. Not coincidentally, Walmart is the only company affected by this legislation.

This legislation is dangerous on several levels. For one, though only Walmart is currently affected, it opens the door for expansion of the concept to include smaller employers and encourages similar measures in other states. While that may sound good to some, we must keep in mind that this unfunded mandate is essentially a tax on payroll. And one thing we know to be true is that we get less of what we tax. Thus, we’ll get less payroll – either through lower wages or fewer jobs. (If you disagree, consider that the arguments for higher cigarette or gasoline taxes include discouraging their consumption). The irony is that we could actually end up with more unemployed people who have no insurance and wind up on state Medicaid rolls – precisely the opposite of what the legislation is designed to do.

But another flaw in the legislation is that it treats all large employers as identical. But that is not true. For example, Walmart and Microsoft are both big companies. But whereas Microsoft earns a profit of approximately $210,000 per employee, Walmart earns only $8,300. Even fellow discount retailer Costco earns more than twice as much per employee as Walmart.

Why does this matter? Because it means that not all employers are equally capable of paying for increased benefits. We look at Walmart’s size and assume it has bottomless pockets, but their profit per employee leaves relatively little margin for additional expenses per employee. Legislation like that passed by Maryland further reduces that margin, making Walmart less competitive in the marketplace vis-a-vis competitors with greater margins.

But Walmart is not the only company with thin profits per employee. It is also true of far smaller companies, which brings us back to the concern that this may be just the opening salvo in the attempt to get employers to shoulder more of the healthcare burden. This legislation passed largely because only one employer was affected. That limited the lobbying effort against it. Next time, the state can go for a lower employee threshold without worrying that Walmart will oppose it since they would now benefit from having their competitors face the same requirements. It’s a divide-and-conquer approach that could be devastating for businesses on less sound financial footings. Ironically, it could be the Walmarts of the world who end up the real winners, as small businesses struggle under the burden of increased state spending mandates.

Healthcare is among the greatest challenges we face in the years ahead, but that challenge is not faced solely by the uninsured among us. Our employers also face a crisis in paying for the insurance they already provide. Legislating coverage is not a solution, but a mere band-aid that could do more harm than good. We need a serious discussion about costs, technology, insurance and expectations if we hope to avoid a real crisis. It’s a discussion I plan to pursue in the weeks ahead, but I fear there are no easy answers. Legislation like that passed in Maryland mistakenly leads us to believe there are.

Posted by Paul Szydlowski at January 20, 2006 1:16 PM
Comment #114948
Legislating [health care] coverage is not a solution, but a mere band-aid that could do more harm than good.

Legislating health care works with Medicare in this country, and in virtually every other Western industrial nation on the planet. (here come the anecdotal stories about waiting lists for elective surgery …)

So I don’t believe this assertion of yours. It’s frustrating that your piece is titled “Beware Easy Healthcare Fixes,” but then you only talk about the new law in Maryand and fail to mention any other place’s (Medicare, Europe) experience with health care legislation. Consider this fact: Europeans spend less on health care per capita than we do, yet live longer and healthier.

A few simple facts about Wal-Mart and the health care benefits it provides:

The annual deductible for the plan is $1,000. This in a company where the typical employee earns $14,000 per year. That means that Wal-Mart’s health plan doesn’t kick in to protect the employee until AFTER the employee has coughed up $1,000 of his meager annual wages.

To be eligible for the Wal-Mart health plan, a full time employee has to be employed for six months. A part time employee TWO YEARS. People in Management positions? Covered from day one.

So I’m not surprised the state of Maryland has basically told Wal-Mart, “your going to help pay for the health care problem inb this state — because you’re creating it.” If Wal-Mart wants to avoid the law, then they can give their employees SERIOUS health benefits. Not the Mickey Mouse system they have now.

Incidentially, one of the other companies covered by the law, but who doesn’t have to pay because they pay their employees better — a supermarket chain very similar to Wal-Mart. Been in business for over 50 years!

Posted by: Steve k at January 20, 2006 3:56 PM
Comment #114953

If I was Wal-Mart, I would close EVERY store of mine in Maryland overnight. No warning or anything.
If the govt wants to dictate how a PRIVATE company uses it money, then it should open its own store and run it the way it wants to.

Thanks for bringing this issue up Paul.

Posted by: kctim at January 20, 2006 4:11 PM
Comment #114955

Steve K,

I have administrated health insurance for four different companies and your solutions are impractical. Deductibles of $1,000 or more are the only types of insurance that are even reasonably affordable. Go out and try to find what you think a “good” insurance policy should have for a family and you will be spending at least $800 a month.

Eligibility requirements vary from company to company. Walmart is not out of line with most industries, usually it relates to employee turnover. Most companies do not offer insurance to part time workers. Keep in mind, that the federal and state regulations for the admin of these plans is unbelievable.

What is this other company that was effected? All the news outlets say that Walmart was the only one.

Check out Marketwatch

This article also lists the potential problems that this legislation could have on the retail industry in general.

In conclusion, mandating employers to provide health care benefits is not a way to solve the health care crisis.

Posted by: Cliff at January 20, 2006 4:19 PM
Comment #114956

“This in a company where the typical employee earns $14,000 per year”

Why does the typical employee only earn 14 grand a year? Could it have anything to do with typical employees being students, housewives and retirees who only want to work a part-time job?

“That means that Wal-Mart’s health plan doesn’t kick in to protect the employee until AFTER the employee has coughed up $1,000 of his meager annual wages”

How much of these meager annual wages does the govt steal from their paychecks every month?

Posted by: kctim at January 20, 2006 4:19 PM
Comment #114957
I have administrated health insurance for four different companies and your solutions are impractical.

I’m missing something here. Medicare, National Health insurance a la UK, Germany or Sweden are “impractical?” How so?

Deductibles of $1,000 or more are the only types of insurance that are even reasonably affordable. Go out and try to find what you think a ‘good’ insurance policy should have for a family and you will be spending at least $800 a month.

And I am saying: Wal-Mart should be paying this, because SOMEONE has to. It’s either Wal-Mart or the government. Health care is not a discretionary item in people’s budgets. It’s a Necessity.

Eligibility requirements vary from company to company. Walmart is not out of line with most industries, usually it relates to employee turnover. Most companies do not offer insurance to part time workers.

How do the part time employees get health care?

What is this other company that was effected? All the news outlets say that Walmart was the only one.

Giant Foods has over 10,000 employees in MD. So does Johns Hopkins University and one other company. All of them provide decent health care coverage, so they won’t have to contribute to the state’s medicaid fund.

In conclusion, mandating employers to provide health care benefits is not a way to solve the health care crisis.

I’m in favor of Medicare for everyone funded by Federal income taxes, not mandating via employers. Now, wouldn’t employers actually LIKE that?

Posted by: Steve K at January 20, 2006 4:30 PM
Comment #114959

If you tax something and drive up the cost, you usually get less of it.

Maryland is always doing silly things like this. They are lucky Virginia is next door.

Posted by: Jack at January 20, 2006 4:34 PM
Comment #114962
This in a company where the typical employee earns $14,000 per year.

Employee pay is directly related to the profit each employee generates. In a low margin business, that profit is going to be less, thus pay is less. You may feel that $1,000 is a lot to ask for employee contributions, but the plan I’m on costs over $1,000 per month per employee. If Walmart’s plan is 1/4 cheaper, that means that Walmart pays about $8,000/year per employee for insurance, or an amount about equal to 57% of the employee’s pay. That’s huge.

Yes, we have employers with stellar health plans. They include Delphi (bankrupt), GM (nearly so), Ford (on its way). Healthcare is a crisis for employers and employees alike.

You mention that other nations have legislated their way to health coverage, but we 36% more per capita on healthcare than the next highest-spending nation. That discrepancy cannot be fixed by legislating more coverage - it’s a different problem entirely.

As for the other grocer that offers better coverage in Maryland (a unionized shop that lobbied for the law), I’ll be curious to watch both the company’s fortunes and the state of it’s health coverage in the years to come. Again, this problem is much more systematic than getting someone to pay for it.

These are all issues I plan to raise in future posts. As I said in my original post, healthcare is among our greatest challenges. Something must be done, but Maryland has not found the answer.

Posted by: Paul Szydlowski at January 20, 2006 4:43 PM
Comment #114963

A good article on who gains by attacking Wal-Mart.

Posted by: Jack at January 20, 2006 4:49 PM
Comment #114964
You mention that other nations have legislated their way to health coverage, but we [spend] 36% more per capita on healthcare than the next highest-spending nation. That discrepancy cannot be fixed by legislating more coverage - it’s a different problem entirely.

OK, what is the PROBLEM, and what do you recommend for the SOLUTION?

And if you start talking about all the research we do, etc. etc., then you also have to pullout of our cost calculations all the administration we do (private health care plans: 20%; medicare: 3%), plus all the advertising and other nonsense that doesn’t contribute to anyone’s health.

These are all issues I plan to raise in future posts. As I said in my original post, healthcare is among our greatest challenges. Something must be done, but Maryland has not found the answer.

I look forward to your future posts. And I agree that Maryland has not found THE answer. But I believe Maryland has found A PARTIAL answer for its health crisis among the poor.

Posted by: Steve K at January 20, 2006 4:53 PM
Comment #114967


I will begin by saying that the American Enterprise Institute is not exactly what could be called an “objective” organization in terms of analysis offered. However, their point as to the employee threshold is well-taken; I think it was unfair to target Wal-Mart by mandating a 10,000 employee mark. But, something does need to be done. Either business needs to get behind a universal health care system, or they need to stop whining and understand that people must come before short term profits; healthy workers translate to long term stability and profit.

Posted by: ant at January 20, 2006 4:57 PM
Comment #114966

Walmart seems to have a few choices :

1. Pay the amount that Maryland has mandated by law and suffer the profit loss/product.
2. Close all installations in Maryland immediately.
3. Shelve all plans for any expansions in Maryland.

I say this not because I am opposed to everyone getting all the help they can on healtcare but, because it should not IMO be mandated by State Law.

Posted by: steve smith at January 20, 2006 4:57 PM
Comment #114969

Great discussion; our garden club ladies said “Isn’t it wonderful Inglewood said no to Wal-Mart”
I said no, and pointed out my son is in management program without college, a way to move up the economic ladder, where else but Wal-Mart.

Posted by: Greg T at January 20, 2006 5:02 PM
Comment #114972
Either business needs to get behind a universal health care system, or they need to stop whining and understand that people must come before short term profits; healthy workers translate to long term stability and profit.

Well said ant.

I too read the AEI article cited by Jack and found it quite biased. The article spoke almost exclusively about the work of Unions and said ABSOLUTELY NOTHING about the health care issue except for the glib comment “The specter of Wal-Mart employees … hurt health-wise because of a lack of insurance is sheer fiction.”

AEI and others want to look at this problem as politics. I want to look at this problem as a serious crisis in public health. Many Americans simply do not have access to health care in this country because they are too poor. I know Paul and others disagree with me about National Health Insurance. That’s fine if they present a genuine plan that provides quality health care to EVERYONE. Proposals like “health savings accounts” don’t cut it for me (perhaps that’s where Paul’s headed), but I will read with an open mind about any alternative as long as its universal and affordable.

That said, I’m outta here Good Shabbas everyone …

Posted by: Steve K at January 20, 2006 5:12 PM
Comment #114976

Yeah, as if healthcare in this country could get any worse than it is. Have you even gone to the doctor lately? There is no continuity of care, almost no availability of low-reimbursement visits, millions of people without adequate access, and we pay more per capita (including those with no care) than any other developed nation. Just how could we screw it up any more than that?

Posted by: Mental Wimp at January 20, 2006 5:28 PM
Comment #114979

“millions of people without adequate access, and we pay more per capita (including those with no care) than any other developed nation. Just how could we screw it up any more than that? “


“Beware Easy Healthcare Fixes”

Hmm…Wait wait…I know the answer to the question!

Posted by: chantico at January 20, 2006 6:06 PM
Comment #114982

I have been to the hospital in several countries. Two of my children were born overseas (Norway & Brazil). We should not be too fast to trash our system. In most U.S. states, those without health insurance go to the county (public) hospitals. The care there is not as good as in private hospitals. In countries with socialized medicine, people go to the county (public) hospitals. Everyone gets similar levels of care, that is true.

I liked the way health care was distributed in Norway, but I pride myself on being a kind of no frills, ignore the pain kind of guy, who has missed only one week of work in the last 21 years (after being hit by a car). Most Americans would not accept it.

Posted by: Jack at January 20, 2006 6:44 PM
Comment #114992

It’s good to see some republicans actually putting more and more effort into this issue, that has been typically a democratic one. Those of us who are pro-big business, have began to realize that it is hurting our economy. Toyota, after building manufacturing plants in the U.S. has started to focus on Canada, due to health care costs.
This post has raised many questions, but really hasn’t given us any answers. I’m looking forward to your future posts on this topic to see what you feel the solutions are, because few republicans actually give a solution, they just bash everyone else’s. I think that the Maryland idea isn’t perfect, but I applaud them for actually trying to do something about their situation. It takes guts to try to find a solution, and few politicians have guts anymore.
I have a solution that I have been working on in my mind, and I would like to know what others think. I work in Nuclear Medicine, and I’m working on a graduate degree in health care admin. Not that this qualifies me anymore then anyone else, but I think about this and hear about these problems daily. Every side in the health care industry is playing unfair. Insurance companies have 500 page booklets about their policies that are there to confuse you. You can only go to certain hospitals, but if they take your blood you have to make sure that they send your labwork to someone else or they won’t pay. This is a typical example, I think that it is a joke that you have to read a novel to figure out what will and won’t be covered if you have an organ transplant, etc. Patients are playing unfair with frivilous lawsuits that is skyrocketing the cost. Hospitals and physicians order unnecessary exams because they receive kickbacks for the business they bring in, they also have to practice defensive medicine. I can’t even begin to count how many nuclear medicine examiniations I have done just because Dr’s want documentation to show that this is not a problem, in the 0.001% chance that it is the problem and they don’t want to end up in court if it is. Vendors are totally corrupt, things have changed a little, but if you want to see why your prescription drugs cost so much, hang out with a pharmeceutical sales rep for a couple days. Anyways, we have proven that all sides are playing unfair, you can point your fingers to either side, but you need to have that finger point to you as well.
Basically, people want you to believe that their are only two solutions, socialized medicine, or extremely high costs. I think that there is a comprimise to be found within these two choices. We’ve all heard the horror stories about socialized medicine, I lived in Canada for a couple years, and there are some definite disadvantages to socialized medicine, but I personally believe that this would be a better solution then what we currently have. I think the best solution would be this. The first thing that needs to happen, is that George W. Bush’s bill to cap malpractice payments should be passed. I wish he would spend more time pushing this bill. This caps pain and suffering payments at 300K. The family who lost a father would be compensated for the fathers income, and medical bills would be still be paid, it just caps what you get above and beyond that at 300K. I think that when you have an industry that plays “unfair” government needs to regulate it. i think there should be a price index, which would set specific amounts to how much a hospital could charge for a specific procedure. Obviously the hospital in New York City is going to have procedures that cost more then in Boise Idaho, due to labor and real estate being more expensive, so that is why a price index would be required due to geographical region. The next thing the government needs to regulate is insurance companies. The government should require insurance companies to offer three different plans that are easy to understand. Maybe a 70%, 80%, and 90% coverage with decent deductables and copays to discourage people getting unnecessary treatment. Hospitals should be required to bill a certain amount and insurance companies should be required to pay a certain amount,none of these 300 page plans. Anyways let me know what you think.

Posted by: Ivan Mitchell at January 20, 2006 7:14 PM
Comment #114997

Just a couple of thoughts:

1. Drug companies lobby doctors almost as hard as the Washington crowd. What a waste of money.

2. Advertising drugs to the general public: this has got to be the worst (and most expensive) idea yet. Trying to get patients to pressure their doctors for some drug or other.

3. The money from these two endeavors could be used for research and development and/or to reduce the overall cost of the drugs.

4. The fact that the US pays through the nose while other countries enjoy the benefits for much less from the drug companies is bizarre.

5. There should be a panel to review any case going for malpractice before it goes to trial. I’m not sure how this could be set up equitably, but I think it could. Similar to the ethics committees for Congress?

6. Medicare or medicaid should be made available to anyone who is not covered by a health plan through employment. Medicare recipients pay for the privilege, medicaid could be set up that way too, for those not eligible for free.

Just some random, off the cuff ideas.

Posted by: womanmarine at January 20, 2006 7:37 PM
Comment #115005

This is just another socialist attempt to be fair to everyone, at the expense of the producers of the country. Brain dead Government employes have never failed to ruin anything they touch in the name of fairness. When are you people going to wake up and vote for smaller more efficent government which does what the founding fathers expected of it. Which is to protect us from forign attack and from domestic violence? Nothing else. The people can take care of the rest of it ourselves.

Posted by: comander jc at January 20, 2006 8:43 PM
Comment #115007

Healthcare went down hill the minute third party payers got involved. Again, it started as a perk to hire the best and brightest, now as seen in Maryland, it has become an entitlement. This is ludicrous.

First, why should an employer be forced to compensate a worker with health insurance for the 16 hours a day they are at home making their own life decisions. The offering of plans should be as voluntary as the use of them.

Your health decisions are none of my business unless you come to me to get reimbursement. The same goes for national socialized health care. The issue is subsidizing lifestyles. Why should, as in Jack’s pesonal example, someone who does not use the system pay for someone to live with a devil may care attitude.

It is a matter of personal responsibility. We already have socialized health care. It is called the emergency room. Ability to pay is discussed after services are rendered.

When is the last time you asked the healthcare professional what the fee was? (not the co-pay, or the deductible payment).

I do agree that healthy workers are an economic benefit. But staying healthy and going to work is just as benificial for the worker.

Currently, the tobacco companies and the government are paying billions for health programs related to smoking. I am amazed we haven’t tapped the oil and auto companies to pay for driving related issues. After all, a corvette at top speed can’t be any less dangerous than a pack-a-day habit. Then next we can go after the sporting equipment industry to help pay for sports injury programs.

I will agree to one type of government system. It is thus: as we have been warned, social security is going bankrupt and so is medicare. Why not combine them and alleviate social security for those of us under 45. We keep paying until the age of 65 and/or retirement if you choose to work longer. Then free healthcare period. No more meager poverty sustaining SS checks but then no medical bills. Up until retirement, there should be three choices-work sponsered health plan (providing group discounts), private health plans or a Health savings account (with a major medical policy as a backup).

Before you come unglued at me for what seems a lack of compassion. I can speak with some knowledge on the lack of health care in this country. I am under 45, six years ago I had my own mild MI (heart attack)-drove myself to the local hospitals Doc-in-the-Box and was transferred immediately to the cardiac wing at the hospital. Three days and 30 grand later I was out and on my way to cardiac rehab. All paid for by my then wifes’ health plan from her job at the very same hospital. My heart incident was from poor eating habits-cheeseburgers, pizza, fried foods etc., one meal a day and although I work hard and am not obese, I wasn’t excersizing either. Now after a divorce and since I am self employeed, Health insurance is up to me. I have explored all options and by far the cheapest is Cash, and personal responsibility. I have been turned down by the best and worst companies. There is a plan in California sponsored by the government but the cost is such, it is cheaper to get sick and work out the payment with the health provider later. In fact, the local hospital here in town will discount the bill %50 for cash customers just because of the lack of overhead expense for processing the required re-imbursement paperwork. The other option is for me to hire someone, pay the rest of the b.s. overhead involved with employees and get a group plan where I can’t be turned down. Still more expensive than cash and personal responsibility. I now ask first about any procedures, I base my drug needs on cost as well as effecacy and I am still here, able to eat, sleep and have a computer. Can I afford the $1,0000 dollars for a stress test that my cardiac doctor ordered-not at the moment, however, I did ask him if he wanted to go running with me and listen to my heart afterwards. Cost-$90 for a new set of running shoes. I buy all of my medicine cash-even the lipitor. Still cheaper than insurance.

In conclusion, Healthcare is not a right nor a priviledge, it is a personal responsibility. I do not want you to pay for me or feel bad for me in anyway. But then agian, I am free to live life my way as long as my creditors stay happy.

Posted by: Scott at January 20, 2006 8:57 PM
Comment #115009

Scott, well said! I do not have the life experiences you have had, but I have long believed the problem with health care is the fact that the average consumer has no idea of the costs, all he cares about it how much he has to pay. If everyone actually paid their medical expenses out of pocket, the demand would decrease and then so would the price. Personal responsibility is the best way for any problem to be dealt with!

Posted by: danny at January 20, 2006 9:24 PM
Comment #115125

Steve K said:
I’m missing something here. Medicare, National Health insurance a la UK, Germany or Sweden are “impractical?” How so?

And I am saying: Wal-Mart should be paying this, because SOMEONE has to. It’s either Wal-Mart or the government.

1) Medicare is for the elderly. Medicaid is for the poor. There is a difference. The folks without health insurance will be covered by Medicaid.
2) Regardless of #1, do you REALLY think that there is no problem with either of the government plans?
3) Do you really think that Wal-mart or the government is who is paying for insurance?

The simple fact of the matter is that the reason why the health care system needs to be fixed is because people do not have control over it. They are paying for it without having any say in how the money is spent. If the cost of hiring an employee goes up, either the cost of the products the company offers must rise or, more importnatly, the wages paid must go down. Less $ in the pocket means less $ to spend on other essentials and wants.

Posted by: Rich at January 21, 2006 12:51 PM
Comment #115132

What the Sate of Maryland is doing is putting it’s own version of national health care in place. But insted of the state picking up the tab it’s going to make the employers pick it up. This will only up the cost of doing business and guess who’s going to pay for it. Your right, the consumer.
I don’t know about the cost per employee in other states because of benifits and state and federal mandated taxes. But it cost me about twice as much as I pay my employees to have them on the payrole. The adverage pay in my company is $13.50/hr. It cost me including their pay $25.96/hr. This includes my part of their health and dental insurance which is about $1.62.5 an hour. While that may not sound like much concider that comes to $65 a week per employee. Muliply that by 50 and it comes to $3,250 a week and $169,000 a year. This is only what I’m paying. My employees are pay as much. This is with $800 per year deductible. I’d like to add eye care onto this but at these rates I really cann’t afford to. In fact I’m going to be forced to go to $1,000 deductible just to keep the same rates I have.
If the state were to mandate heath insurance the insurance companies would most likely double that in very short order. Just like they did with manditory auto insurance. I’m sure that they will this for Wal-Mart up in Maryland.

Posted by: Ron Brown at January 21, 2006 1:10 PM
Comment #115137

It’s a very dicey issue. Is comes down to who pays for it all… and what should be charged for each service.

I have 4 employees, and I spend $16k a year for their basic insurance ($2000k deductible.) We then also cover 80% of the medical expenses up to their deductible… they pay 20%. That’s a lot of money… I cover my health insurance (same deductible) but pay all the out of pocket costs. Wow, what a revelation. When I see $450 paid for wasted tests, just because that’s they way things are done, that bothers me. The tests in this case (for a very routine surgery - no more babies kind of thing… I know, too much info.) was to make sure that the doctor removed what they should’ve removed. If they’re not sure, why do I have to pay extra for their lack of confidence? I also had to test to make sure that the surgery worked. Don’t you think one test would’ve covered things? Why both…? (Cause I pay for it, that’s why.)

People do not care what their health care costs, because they never pay those bills. In fact, it kind of feels good if you receive more services than you pay for… but there’s an obviously shortfall this that. We’ve removed the free market impact from health care because the costs are regulated (by HMOs & Health Professionals) and they are hidden from the consumer.

Another perspective I have from owning a business is that I pay whatever North Carolina tells me I have to pay to do business in this state. They are quite free to tell me to pay for my employee’s health care (they don’t do that yet.) It’s my choice to do business in this state or not. I don’t see why anyone should cry for Wal-Mart… they have profit levels that their employees could never dream of having. So, if you make money by doing business in a state, then you should expect to leave some of that money in that state.

Should government pay for the health care… they do, in many ways. But I can guarantee you if Wal-Mart does not pay for it’s employee’s health expenses, the government will end up footing the bill, and that means the taxpayers will end up paying in the end.

I guess we all have to face the fact, we will pay - one way or another - for people’s health care. Either through higher costs at the store or higher taxes.

To me, if someone makes money in my state, then the should expect to help cover costs associated with the operation of that state. I also think that there should be some reasonable control on health care/health insurance expenses. Both of those industries are making records profits as well… They need to share some of the burden as well.

Posted by: tony at January 21, 2006 1:49 PM
Comment #115153


Although your subject is healthcare, you wind up complaining about how a certain law hurts Wal-Mart. It’s not healthcare that bothers you; it’s the way Big Business is treated.

Poor Big Business!

There are no healthcare problems for the rich and famous. They can get excellent care whenever they need it. Healthcare problems for the poor and middle class is another matter. They are suffering. If you want to address healthcare, tell us what we should do to help those who need it.

Posted by: Paul Siegel at January 21, 2006 2:43 PM
Comment #115162
Walmart earns only $8,300. Even fellow discount retailer Costco earns more than twice as much per employee as Walmart.


It is interesting that you compare the earnings per employee of Wal-Mart with Costco. You say Costco earns more that twice as much as Wal-Mart per employee, but you fail to mention that Costco also pays their employees twice as much as Wal-Mart and pays 92% of its workers’ health insurance. So, tell me, if Costco can pay it’s employees a living wage and pay the bulk of health insurance premiums and still earn twice as much per employee as Wal-Mart, then that sounds like a management problem at Wal-Mart.

Management philosophy at Wal-Mart and Costco are night and day. While Wal-Mart’s philosophy is sell as much product as cheap as possible on the backs of their employees, Costco has followed the philosophy that a happy employee is a loyal and productive one.

Strong union representation isn’t the only reason Costco jobs are so well compensated; the company itself has an unusually forward-looking corporate philosophy.

Costco CEO Jim Senegal has said: “We pay much better than Wal-Mart. That’s not altruism. It’s good business.”

Chief Financial Officer Richard Galanti explained: “From day one, we’ve run the company with the philosophy that if we pay better than average, provide a salary people can live on, have a positive environment and good benefits, we’ll be able to hire better people, they’ll stay longer and be more efficient.”…

…By compensating its workers well, Costco also enjoys rates of turnover far below industry norms. Costco’s rate of turnover is one-third the industry average of 65% as estimated by the National Retail Foundation. Wal-Mart reports a turnover rate of about 50%.

With such rates of employee retention, Costco’s savings are significant. “It costs $2,500 to $3,000 per worker to recruit, interview, test and train a new hire, even in retail,” said Eileen Appelbaum, Professor at Rutgers University’s School of Management and Labor Relations. “With Wal-Mart’s turnover rate that comes to an extra $1.5 to $2 million in costs each year.”…

…Besides the efficiency of its workforce, another reason Costco can afford to pay more is that it cuts the fat from executive paychecks. The overall corporate philosophy is that workers deserve a fair share of the profits they help generate — not just a pat on the back or a new job title like “associate.”

For example, while CEOs at other major corporations average 531 times the pay of their lowest-paid employees, Sinegal takes only 10 times the pay of his typical employee. His annual salary is $350,000, compared to about $5.3 million awarded to Wal-Mart’s Lee Scott…

Health Plan Costs
Wal-Mart: Associates pay 34% of premiums + deductible ($350-$1,000)
Costco: Comprehensive; employees pay 5-8% of premiums

Employees Covered By Company Health Insurance
Wal-Mart: 48%
Costco: 82%

Instead of government intervention, perhaps the solution is consumer intervention. We need to look at more than just low prices when deciding where to spend our dollars. When we as consumers start hitting the bottom line of companies that are poor corporate citizens and start rewarding companies that are a positive contributor to society, see how long it takes for leach companies to turn over a new leaf.

It amazes me that we debate the role of government intervention on poor corporate citizens when we as Americans belong to the largest union in the world- “We the People”. If we want to effect changes in government and the market, we need to get organized and make it happen. The best way to do that is get the word out. How many people in this country actually know how big a leach Wal-Mart really is, and how much a good corporate citizen like Costco has to offer to society as a whole? When are we going to wield the power we have been given to clear out the criminals running this country? When are “We the People” going to raise the bar on what is expected from our leaders and force corporate America to become our ally instead of our enemy?


You have some good points about personal responsibility, but what you are suggesting would make the situation much worse and you even mention it in your comment: “It is a matter of personal responsibility. We already have socialized health care. It is called the emergency room.”

I work in an emergency room, so I know a little about this. By law, an emergency room cannot turn anyone away because of inability to pay. That is great if you are having a heart attack or a stroke, but that is not what the modern emergency room has become. Every year the emergency room becomes used as a personal doctor’s office for things that are not emergencies. Stubbed toe, can’t afford the doctor’s visit? Wonder if your pregnant but face the dilemma of whether to spend your last few dollars on an EPT or cigarettes? WHAT DO YOU DO? What do you do??? Go to the emergency room, and don’t worry about paying!

The other problem of this is that when you present to your physicians office that you have built up a relationship with and has your past medical history at hand, he is able to treat you much more efficiently and cost effective than an ER. When you present to the ER, for whatever reason, we do not have access to your prior medical history, and due to malpractice we must consider your condition as emergent, whether it is or not. That means that expensive tests must be done. Who pays for that?

I agree with Paul, the Maryland solution is no solution at all. We ARE facing a health care crisis that will only get worse as aging baby boomers test the strength of our system. If we continue on the path we are on, it will be like trying to carry a watermelon on a wet paper towel. Something will have to be done. The idea of national healthcare may not be ideal, but I have not seen any better proposed, yet. If someone has seen a better way, please post it. I, and others here, I’m sure, would be interested in seeing it.

Posted by: JayJay Snowman at January 21, 2006 3:17 PM
Comment #115170

I really think that making healthcare a right and not a privilage is the way to go. At least if we are our brother’s keeper. So let’s tax companyies as individual entities, (Corporations)without all of the loop holes. Let,s say we tax the monies and profits earned by the employees and the companies in a manner of logical order. Index it. You make a million, you pay 250,000; you make 14,000 you pay nothing. The details in the middle can be designed in a short time. I guess my plan would not work if you were a person with the belief of “more”. I need more and more and more with less and less rsponsibility to my brother or sister. We blame the other countries for causation of our loss of wages and profits. I believe it is our belief in “more is better” that is the causation of much of our loss.

Posted by: Marv E. at January 21, 2006 3:48 PM
Comment #115189


Thanks for pointing out The flaw in my comments. Let me first say that you are correct about the emergency room being the buffer or first place to go. I did not mean to imply that this was the best option especially in non-life threatening situations. In fact, your comments play into what I am trying to convey about the third party pay system. It is known that ability to pay is not a discriminating factor in emergency room visits. So as is with most freebies, it is abused.

I gotta go back to personal responsibilty. Creating a larger ponzi scheme is not the solution. Until the paradigm on daily lifestyles in this country changes, the costs associated with healthcare will continue to skyrocket.

Diseases come in several categories, inheritance, air borne transfer-species to species contact, and lifestyle. Almost all of them share a certain amount of preventability. The old standbys-eat right, excersize, good nights sleep, still work. Some of the comments above point to europe and their system which shows healthier longer lives. Look past the numbers and at the reasons. They take some responsibilty for their lifestyle. Stay home eating with fresh foods etc. This is changing as we continue to export our foodstuffs and way of life. (eating out, skipping meals, eating premade preservative foods, etc.) Once the demand for healthcare increases so will the costs in those countries as well.

Please folks, live, breath, smoke, drink, drive fast etc.,it is your life have at it. I am not perfect, just paying enough attention. Read the food labels. Can you pronounce everything? If not why is it going in your body? or that of your children? Absolutely it tastes good and I have and can become a good friend to a box of ritz crackers, half gallon of ice cream washed down with a beer while watching a three hour sports event on television.

The most recent talking points on television point to Spongebob on Poptart boxes as the latest scourge to fatten up our kids. (the effects of media on people is another good future topic.) But the direction seriously being considered is some sort of legislation etc. Wonderful, more work for the beauracrats and food police plus another tree gets chopped down to make 300 to 400 new pages of law when two letters would solve the whole thing—N.O., said it to my six year old yesterday at the store. Sky did not fall, earth didn’t open up and the whole thing was a non issue by the time we got back to the car.

I am not ignoring those who truely need and can not by any means afford to pay. In fact, the positive of taking responsibility leads to healthier people, less waste, lowering of costs due to lack of demand and the ability to actually pay for these folks with the current programs in place.

Posted by: Scott at January 21, 2006 4:31 PM
Comment #115203


I agree with your assessment of being personally responsible for lifestyle choices. The problem is that the food producers in this county have made it very difficult. They peddle foods that are cheap to produce, have an infinite shelf life and the largest profit margin, and they have the government right there in their pocket. The new food guide recently released by the government is an improvement on the previous. But look at the foods that these guidelines push especially the last food pyramid. Refined, nutrient deficient, cheap to produce foods with long shelf lives.

As controversial as the Atkin’s diet was, it did do a lot of positive things. One thing it did was made it profitable to produce high fiber, low carb processed foods (good for diabetics, also). We suddenly saw an influx of high fiber in breads and pastries, even ice cream, and milk. Unfortunately, when the Atkin’s diet fad passed so did those healthy high fiber foods.

It is not just the food producers. Healthcare today takes a “we’ll see ya when you’re sick!”. Healthcare needs to take a pro-active approach to prevent illness, which is much cheaper than treating disease after it has set in.

You mentioned marketing used to sell poor quality foods to kids. There is also a marketing campaign used by Pharmaceutical companies. Feel bad; tell your doctor you want to take our miracle pill! Result: people taking medications they don’t need, passing unnecessary costs onto payers. Also, notice all those very quickly read disclaimers in drug commercials? Guess what? All those side affects, lead to a vicious medication cycle. You take drug A for a condition, then you have to take drug B to counter the side affects of drug A, drug B counters some of the positive affects of drug A, so you’ll need to take drug C to make up the difference, etc. etc. So for one condition, you have people taking multiple medications, not related to that condition, but to counter the side affects of other medications. I have seen patients that have medication lists that are pages long, full 8x10 multiple pages!

The healthcare system is sick and some of the healing needs to come from the system itself, but it needs to be a collaborative effort by payers, out of control government regulators, providers, and consumers.

Posted by: JayJay Snowman at January 21, 2006 5:21 PM
Comment #115302

The insurance companies are to blame to some extent for the problems we face. But the out of sight cost of malractice insurance is the biggest culprit. Two years ago while traveling in South America my traveling companion had to be hospitalized for 24 hours. We thought he had had a stroke. The care he received was excellent. Drs and nurses all competent and compassionate people. It only ended up costing him about $600 USD, including 3 units of blood, his room, IV’s, meals, and all the tests they ran. It’s because the people there do not have the habit of suing one another at every turn and for any reason.

I wish I had a solution for this. As far as I know this is the only country where you have to have so much liability insurance as a business owner or property owner. But what the doctors pay is extreme. That’s why so many of them have gone to work for the HMO’s when they would love to remain in practice for themselves. And the patient is the greatest loser in the equation. The human factor goes by the wayside along with compassion and common sense.

Posted by: Monica at January 21, 2006 9:11 PM
Comment #115342

People complain about the cost of healthcare, well I work in the healthcare field and I can tell you why it has risen so much. Far too often there are people who receive medical that cannot pay for the care. As a result, it is you and I and others like us who pay for our healthcare that end up covering the cost of the healthcare of others. Medicaid/Medicare only allows for certain testing to be reimbursed depending upon the complaint/diagnosis of the patient. Sometimes disease/illness does not follow a well-laid out path, and additional testing is needed. Well this testing is not covered, the patient cannot pay for it as a result, the hospital increases it cost on all care across the board to recompensate for this loss in providing care.

A hospital cannot refuse treatment to anyone who needs it. People come into the emergency room, have their illness or injury treated and then go home, only to receive a bill later. Medical care is the only system that works in this manner. If your car breaks down and you go to the mechanic, he will not fix it until you can pay, the same is true of the electrician and plumber.

I am not saying that the answer is pay as you go health care. However, anyone seeking treatment should have to pay some kind of visit fee. Far too often, people show up in the emergency room for minor illness and injuries that the local clinic or doctor can treat. Instead of waiting for an appointment, they stroll into the ER. They have no financial obligation, and thus they go to what best suits them, instead of going to what best suits their injury or illness.

If you wish to correct the problems in medical cost, the first step is educating people on what constitutes a visit to the emergency room. It is not convenience. The second step would be instituting a copay for all visits. If someone has a financial interest in their decision making process this would cut down on the misuse of facilities. Even for those on Medicaid/Medicare a meager fee of $5 for a doctor’s office visit or a $25 fee for an emergency room visit would help to correct the problem. Many believe that since their healthcare is free, they can use the system for whatever they like. This is the problem that has caused healthcare cost to increase, and what has made it unavailable to those who struggle financially.

Posted by: David Korkowski at January 21, 2006 10:53 PM
Comment #115347

We’ve been spammed ROFL

Posted by: womanmarine at January 21, 2006 11:23 PM
Comment #115353

Jay and David K.,

Right on the nose! I think we are preaching to each others choir. It is hard to be responsible. I would much rather get or eat say schwan’s ready to eat meals than stand and cook at the end of the day. (and I love!!!!! to cook.) But with some effort and an eye toward prevention, it can be done. Also, the food companies, Con-agra, tyson, cargill etc. would change if the demand and/or incentive was there. You are correct, I believe The medical community is set-up much the same as law enforcement. Good to have but really only effective when there is a victim. (ie-restraining orders against an abusive a-hole partner-feels good but paper never stops a weapon or the insane.)

It is to bad because reaction is always more expensive than prevention. A lesson that I have learned the hard way.

You all have a good weekend.


Posted by: Scott at January 22, 2006 12:16 AM
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