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POLICY: Wal-Mart caught with hand in cookie jar — affixs grin, and says “Look over there!”

So just two days ago, Wal-Mart, which as I’ve pointed out in THCB before, has never really been serious about offering health benefits to its workers given that it makes higher profit margins when it doesn’t, apparently had a change of heart. The change of heart involved giving basically minimum wage the chance to pour their huge amount of extra savings into an HSA, and also to get health insurance (without a maximum benefits cap of a massive $25,000) after only one year of employment — ignoring the fact that Walmart deliberately has some of the highest turnover rates of any large corporation. But while Don McCane from the single payer crowd was not impressed, at least one usually non-free market loony blogger was somewhat convinced. (Note the somewhat jaded comment on Joe’s post from yours truly, in which I said that he was an optimist).

Why was he an optimist?  Because any large or small employer that depends on a low income workforce will do better financially by letting that workforce turn-over quickly and keeping their benefits as low as possible. The Costcos and Starbucks are exceptions and their margins suffer in comparison. Of course when you’re talking about health benefits, you’d also do well to try to get your employee population to be younger and healthier than average, or else America’s former largest employer may be your future model. (as Uwe says, GM is an insurance company that builds cars to defray its health care  expenses). So what did you really expect from the Beast of Bentonville.

Well of course it doesn’t take long to realize that Wal-Mart can’t help but trip over its feet in the PR department, event though it’s barely out of the glow of the minuscule positive spin it was getting. The NY Times gets its hands on the memo that tells the reality: Wal-Mart Memo Suggests Ways to Cut Employee Benefit Costs. What’s the rationale?  Get the unhealthy employees out of there, and also eighty-six the ones that stick around and might collect those benefits. And of course hire McKinsey to tell you about that strategy, because you really need $700 an hour consultants to tell you how to reduce your health care costs using those techniques!

In some ways I have a smidgen of sympathy for Wal-Mart. After all they weren’t even around when the ridiculous employer-based system was created. But it’s only a smidgen. Given that employment based insurance is  what we’ve got, and given that Wal-Mart is one of the planet’s most profitable companies, it could easily take the high road. Alternatively, it  could easily use its political muscle to push for genuine universal health insurance in which everyone (including big corporations) pays a fair share. Instead it just wants to get out of any notion of responsibility, and dump everything on some one else–usually its employees and the taxpayer.

And apparently it’s a family trait.

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Online Doctor AppointmentPatient Health Recordseric NovackJim GlinnRon Greiner Recent comment authors
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Guest

Good article. Very informative

Patient Health Records
Guest

Nice blog

eric Novack
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eric Novack

Jim- 1. The concept of algorithm based care exists in many ways today– except that every physician tends to use his or her own algorithm. While I agree that some better way of getting “best practice” data out to patients and providers, it is complex when there are over 10,000 diagnoses listed in the current CMS diagnosis book (and over 40,000 in the updated version, not yet utilized!). Those who want more of this must include protections to providers who follow the algorithm from nearly all liability. This piece tends to be missing from the plans of those who want… Read more »

Jim Glinn
Guest

Ideas: 1. Begin to embrace technology more for disease management. Every time my daughter (I am a new parent) has an illness (fever, cough…) I can look up on the internet any number of possible diagnosis’ as well as what to do and when to seek care from the Physician or ER. For so many other costly disease processes (musculoskeletal dysfunction, neurological disease and cardiac related disease) it seems much more difficult to find sound information. How about algorithm based care provided for many diseases/conditions over the internet. Citizens can use technology to decide when and why they should be… Read more »

Jim Glinn
Guest

Ideas: 1. Begin to embrace technology more for disease management. Every time my daughter (I am a new parent) has an illness (fever, cough…) I can look up on the internet any number of possible diagnosis’ as well as what to do and when to seek care from the Physician or ER. For so many other costly disease processes (musculoskeletal dysfunction, neurological disease and cardiac related disease) it seems much more difficult to find sound information. How about algorithm based care provided for many diseases/conditions over the internet. Citizens can use technology to decide when and why they should be… Read more »

Eric Novack
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Eric Novack

Hope- I imagine I cannot afford your rates!!
I really want to thank you for pleasantly responding to my requests for additional information, and being willing to engage in a true ‘dialogue’.

gadfly
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gadfly

//You miss the point of my original post completely. I pose the question that Hope has courageously working through: HOW do you propose to improve the system?// I didn’t miss the point: I’m not remotely qualified to make proposals about how to fix the health care system. What I represent here is the relatively intelligent voter who understands maybe 1/4 of what the experts on this blog have to say about the economics of health care. The only reason my response might be interesting for you is it might shed light on why a proposal you favor does or doesn’t… Read more »

hope
Guest

Ron – thanks for looking up my blog but I decline the invitation to argue with you. I’ve read enough of your comments on THCB to believe that you are willing to argue but not to discuss. Which is fine, you have a strong opinion – I just don’t have the energy. Erik – I would make it a private non-profit, yes. Prior auth requirements, yes, although don’t ask me to give you an exhaustive list. I would permit specialists to be the PCP for people who have chronic and complex conditions if they and the provider agree it is… Read more »

eric Novack
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eric Novack

Hope- first, thank you for your continued dialogue! Your regional MCOs- funds obtained through taxation (presumably progressive- ie. income based) then redistributed to the region MCO for the total delivery of care for that population. Since the MCO is non-profit, I assume you will not have the employees governmental- ie. a private non-profit? Would you leave control over reasonable care to the executives/ board of the non-profit? Could patients or physicians go outside of the nonprofit for care paid out-of-pocket? If the MCO ‘denies’ a service like a test or surgery or exam and a bad outcome occurs, will the… Read more »

Ron Greiner
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Ron Greiner

hope, you wrote, “By the way, when you switch to a Health Savings Account and a high-deductible product, you’ve removed yourself to some or other degree from both sharing your resources and from being able to count on the resource pool in times of great need.” Are you sure this really means something? Are you suggesting that my HSA clients who have heart attacks have been removed from your so-called resourse pool? I think the $25,000 max on Walmart’s HSA plan is much more troubling than the $1,000 deductible. Also it’s still employer-based so employees will be terminated after a… Read more »

hope
Guest

I would only have one non-profit MCO per region, so not exactly competition. I would just make sure that a variety of entities ran MCOs throughout the country so that if one turned out to be crappy another could come in and take over. Eliminate Medicaid and Medicare (or think of them as consolidated and expanded). Fund it through taxes on personal and business income. Instead of paying a premium to an insurer, you pay it to the feds who turn it back to the MCOs. Could be payroll, could be annual. Require states to roll back their own personal/business… Read more »

Eric Novack
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Eric Novack

John- very funny… but a little silly.
Hope- you appear to be recommending “managed competition”. How would you fund it? Would you eliminate the employee deduction (which would, if same dollars spent,-big, big if- bring in $200 billion approx)? Would you have a dedicated payroll tax (ie medicare)? VAT? national sales tax? What would you do with assets (hospitals, surgery centers, imaging centers) that the MCOs deem ‘duplicate’ or not needed? Should anyone be compensated? Would you eliminate medicaid? Medicare?
Should the MCOs be for-profit? Not for profit?
Please expand.

hope
Guest

Also meant to include health and long-term care related outcomes up there (in the part about paying MCOs), upon a re-read I see I forgot.

hope
Guest

Erik- Here’s how I would reduce costs for all those groups. I would stick everyone into regional risk pools. Every person in a given region would be in a single risk pool, regardless of age or health/disability status. I would contract with a risk-bearing managed care organization to administer all health, behavioral health (BH) and long-term care services for the region, so that multiple funding streams were merged into a single pot of money within the MCO in each region. The MCO would have interdisciplinary care coordination teams consisting of a nurse, a social worker, a BH clinician and a… Read more »

John Pluenneke
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John Pluenneke

Okay Eric: I’ll take you up on that. “How would I reduce spending in all three areas at once?” I’d write a cool little computer program that would look for wasteful spending, fraud and abuse in those trillions of dollars. Then, with the political climate being the way it is, I’d create a quasi-private corporation to oversee my cool little program and make sure it’s allowed to do its thing. If somebody tried to block my clever little scheme by saying I didn’t I’d nationalize Mark Lanier and have him file a really big class action lawsuit again them. Alternatively,… Read more »