Sighting: The Whole Foods Alternative

[From the weblog of John Mackey, co-founder and CEO of Whole Foods Market, Inc.]

"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 and 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 moves us much closer to a complete governmental takeover of our health care system. Instead, we should be trying to achieve reforms by moving in the exact opposite direction — toward less governmental control and more individual empowerment.

Here are eight reforms that would greatly lower the cost of health care for everyone:

1. Remove the legal obstacles which slow the creation of high deductible health insurance plans and Health Savings Accounts. The combination of high deductible health insurance and Health Savings Accounts 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, and provides up to $1,800 per year in additional health care dollars through deposits into their own 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 team member satisfaction.

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.

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.

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.

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.

6. Make health care costs transparent so that consumers will understand what health care treatments cost. How many people know what their last doctor's visit cost? What other goods or services do we as consumers buy without knowing how much they will cost us? We need a system where people can compare and contrast costs and services.

7. Enact Medicare reform. We need to face up to the actuarial fact that Medicare is heading towards bankruptcy and move towards greater patient empowerment and responsibility.

8. Permit individuals to make voluntary tax deductible donations on their IRS tax forms to help the millions of people who have no insurance and aren't covered by Medicare, Medicaid, SCHIP or any other government program....

All countries with socialized medicine ration health care by forcing their citizens to wait in lines to receive scarce and expensive treatments. Although Canada has a population smaller than California, 830,000 Canadians are waiting to be admitted to a hospital or to get treatment. In England, the waiting list is 1.8 million citizens.

At Whole Foods we allow our team members to vote on what benefits they most want the company to fund on their behalf. Our Canadian and British team members express their benefit preferences very clearly — they want supplemental health care more than additional paid time off, larger donations to their retirement plans, or greater food discounts; they want health care dollars that they can control and spend themselves without permission from their governments.

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