Wal-Mart and Healthcare

WAL-MART AND HEALTHCARE….Wal-Mart Watch has gotten its hands on an internal Wal-Mart memo that outlines the company’s plans to cut its spiraling healthcare expenses. The full memo, reproduced here, lists “nine ‘limited-risk’ initiatives and five ‘bold steps.’ ”

The memo, after noting that Wal-Mart workers “are getting sicker than the national population, particularly in obesity-related diseases,” proposes that Wal-Mart should take steps to discourage unhealthy people from working for them. Here is “bold step” #3:

Redesign benefits and other aspects of the Associate experience, such as job design, to attract a healthier, more productive workforce.

….Design all jobs to include some physical activity (e.g., all cashiers do some cart gathering.)

….It will be far easier to attract and retain a healthier workforce than it will be to change behavior in an existing one. These moves would also dissuade unhealthy people from coming to work at Wal-Mart.

The New York Times is all over this today, but the funny thing is that I can’t really blame Wal-Mart very much for this. Corporate healthcare costs are a big deal, and it’s only natural that an HR executive would look for ways to reduce them. Attracting healthy workers and discouraging unhealthy ones is an obvious strategy.

And that’s the problem. In fact, it’s the whole point behind the discussion of perverse incentives in America’s current disjointed healthcare system. In any system that doesn’t cover the entire population of a country, each individual insurer has an incentive to cherry pick only the healthiest workers and leave the sick ones to someone else. This problem is rarely stated as baldly as it is in the Wal-Mart memo, but it’s always there. Our entire system is built around an incentive to make sure that it’s always someone else who’s responsible when someone gets sick.

So sure, as Nathan Newman says, “Wal-Mart has hopefully bought itself a nice Americans with Disabilities Act class action lawsuit.” But really, that’s just a consolation prize that will accomplish little except to make sure that nobody is ever foolish enough to say anything like this in memo form again. The plain reality is that the only way to solve Wal-Mart’s problem is for the United States to adopt some form of universal healthcare. It eliminates the perverse incentives inherent in our current healthcare system, it dramatically reduces paperwork costs, it provides greater heathcare choice for nearly everyone, and it’s pretty much the only chance we have of seriously reining in the skyrocketing healthcare costs that are currently borne disproportionately by private sector corporations.

When will Wal-Mart and the rest of the business community figure this out?