Health-care debate: Wal-Mart's support of mandate rankles other retailers

July 14, 2009|By David Greising

The nation's love-hate relationship with Wal-Mart is taking an unexpected turn now that the "Beast from Bentonville" is endorsing a plan to require employers to provide health coverage for all workers.

The National Retail Federation on Monday directly criticized Wal-Mart for endorsing mandated health care. Such a plan, the retailers lobby said in a letter to members, "would be catastrophic for our industry."

The debate, then, shapes up something like this: The stridently anti-union Wal-Mart, which is not a member of the federation, has teamed with the Service Employees International Union to endorse the Obama administration's plan to require some form of employer-provided insurance. The rest of the retail industry is on the other side, arguing they have the right to not offer health coverage to millions of people in their employ.

"Mandates would drive up costs for retailers while doing nothing to address waste, inefficiencies and lack of competition" in the health-care system, wrote Tracy Mullin, president of the retail federation.

Sounds like a scary scenario. But then, Mullin is writing about Wal-Mart, a company that has defined itself like no other for its ability to squeeze out waste and inefficiency. Once Wal-Mart decided in 2005 -- later than it should have -- to bear a fairer share of the cost of its employees' health-care expenses, the company began attacking some of the unnecessary costs and inefficiencies that are built into the system.

Today, more than 50,000 employees participate in a Wal-Mart program in which their health records are automated, searchable and even transferable should they leave their jobs. Automation of record-keeping is a centerpiece of the Obama administration's health-care plans and is expected to deliver billions of dollars in savings.

For doctors and other health-care providers, Wal-Mart through its Sam's Club stores in April began selling a hardware and software package that automates record-keeping at doctors' offices.

It is a paradox of modern times that manila folders with hand-lettered notations still are the main method of record-keeping in thousands of doctors offices nationwide. For the people on the front lines of the health-care industry -- doctors in their white coats -- automated record-keeping is a long-overdue step into the modern world of the information economy. Automation saves money in part by reducing duplicate testing and preventing costly errors.

Next, there is the question of the health-care plans Wal-Mart offers its employees. This, of course, is a touchstone of controversy, given Wal-Mart's reputation for denying decent benefits to employees through most of its history.

Wal-Mart boasts that its policies are accessible to all employees. The least expensive one costs a single employee with no dependents as little as $12 a month and has a $1,000 deductible.

A legion of critics argues that Wal-Mart's health-care plan is inadequate, with benefits that are not worth having. The retail federation says, for example, that only 43 percent of Wal-Mart's employees sign up for the company's health plans. The Food and Commercial Workers Union in a letter to President Barack Obama noted that Wal-Mart's employer contribution falls short of providing at least 75 percent of the cost of family coverage, an industry standard.

Wal-Mart claims that 51.8 percent of its employees participate in at least one of the company's health-care plans. That is higher than the 45 percent average participation rate reported in a study by the Kaiser Family Foundation.

Wal-Mart is a handy villain. Whether it is battling to keep unions out, squeezing suppliers, putting mom-and-pop stores out of business or taking over the nation's grocery business, Wal-Mart is a magnet for controversy.

But Wal-Mart is not the world's largest retailer just because it has lots of stores. It has grown so large because Americans -- and, increasingly, people around the world -- just can't resist the company's ability to roll back prices, by whatever means necessary.

Wal-Mart's competitors do not like the idea that the company is turning its attention to health care, and they're right that the move is a transparent effort by Wal-Mart to influence the debate and put itself at a competitive advantage while trying to keep unions at bay.

"We simply cannot afford to be put in a box of Wal-Mart's and the SEIU's design," said Neil Trautwein, employee benefits counsel at the retail federation. "We believe the employer mandate would bite, chafe and produce gangrene in our industry."

It is easy to talk about the need for change, and tempting to back away once someone puts specifics on the table. Wal-Mart and the SEIU at least are laying out an idea they think can work. The National Retail Federation cannot contribute to the debate simply by saying no.

Just because Wal-Mart is for the employer mandate does not make it a bad idea.


More online: To read previous columns by David Greising, go to chicago