Saturday, February 16, 2008

Can Wal-mart and Large Businesses Solve the Healthcare Crisis?

Are large corporations like Wal-mart the answer to solving America's healthcare crisis? Certainly it and other organizations like Federal Express did far better than the government by resuming operations within days compared to weeks after Hurricane Katrina. A recent piece titled Wal-Mart: The New Washington is thought provoking. Excerpts from the NY Times article.

  • While Congress wrings its hands over higher health care costs, Wal-Mart vowed to save companies $100 million this year by processing their prescription drug claims. (It already sells generic versions of prescription drugs for just $4, well below the national average.)
  • Wal-Mart, H. Lee Scott Jr., said in an address to employees two weeks ago, “We live in a time when people are losing confidence in the ability of government to solve problems.” But Wal-Mart, he said, “does not wait for someone else to solve problems.”
  • “With their unique combination of scale and speed they are able to leave any government agency in the dust,” said Amory Lovins, chairman and chief scientist at the Rocky Mountain Institute, an energy research group.
  • “Wal-Mart is trying to assume the responsibility that their size confers on them,” said Len Nichols, health economist at the New America Foundation, which supports universal health coverage. “It’s a challenge to the government to step up to the plate.”
  • Take the case of electricity-sipping compact fluorescent light bulbs. Since Wal-Mart began heavily marketing them two years ago, it has sold 145 million bulbs, saving enough electricity, it says, to forestall the need for three coal-fired power plants in the United States.

Now Wal-mart hasn't been the perfect corporate citizen. In late 2005, the revelation of a memo reinforced the belief that it didn't care about its workers when it indicated slowing healthcare costs by discouraging unhealthy people from applying for work. Others have maintained with the low wages and skimpy employee benefits, that Wal-mart was simply using the state and federal Medicaid programs to pick up their employees healthcare costs.

Nevertheless, its recent behavior over the past few years (as well as the actions of other large corporations), seems to suggest that these companies are finding that being part of the solution whether healthcare or environmental concerns is not only socially responsible but also financially sound. An article in Fortune magazine titled Business is Back reviewed the rise of businesses and CEOs to step back into the public eye after being embarrassed by a variety of scandals (think Enron and MCI-Worldcom) and lack of public interest after 9/11.

In my opinion, any healthcare reform will require these large corporations, who purchase the vast majority of health insurance, not only to demand better care for their employees but also to teach the healthcare system on what can be done to improve the speed, reliability, and efficiency of a system too antiquated and failing on every conceivable measure with respect to quality, access and costs.

If our healthcare system can learn from large corporations and large corporations can continue to be mission driven and responsible corporate citizens, you will see a healthcare system far better than those of other countries as the final result will be a uniquely American solution.

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