December 14, 2006
Safeway’s Burd Goes to Washington
Steve Burd, chairman, president and CEO of Safeway, has been calling for healthcare reform for years and now he has gone to Capitol Hill to draw increased attention to an issue he clearly feels cannot be put off any longer.
Mr. Burd said, left as is, healthcare costs will equal the net profits of companies as early as 2008. To address the problem he has come out in support of a proposal by Senator Ron Wyden (D-OR) to reduce the nation’s healthcare bill.
“Senator Wyden, with his commitment and passion for healthcare reform, has introduced an innovative proposal that lays a foundation to begin a serious discussion on healthcare reform in this country,” said Mr. Burd. “Our nation is facing a crisis that requires immediate attention. Working together, business, labor, government, consumer groups and healthcare providers can collectively solve this problem.”
Mr. Burd was supportive of a number of initiatives in Sen. Wyden’s proposal. These included: seeking market-based solutions; an emphasis on preventative care; incentives to encourage personal responsibility and healthy behaviors; and a broad commitment by individuals, employers, government and healthcare providers in dealing with the issue.
“The problems facing the current healthcare system can be solved, but it will take innovative leadership,” he said. “Without some dramatic change, not only will the uninsured population continue to grow but the American worker will become less competitive. We have a unique opportunity to solve this problem and instill market mechanisms that reduce costs, increase affordability and improve health by assisting individuals in making better healthcare decisions.”
Safeway has moved to a consumer-driven plan for its non-union workforce. The plan pays 100 percent of preventive care and offers incentives to employees to improve their healthcare decisions. Total healthcare costs for these employees have decreased 30 percent over the two-year period since the plan was first enacted. Most of those savings have been passed directly to employees in the program.
Discussion Questions: Is it time for the retail industry to join with Steve Burd on the healthcare reform issue? Does the industry have the size and
influence to move the healthcare reform agenda forward?
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It’s not just retail but all businesses. Health care is expensive. Family policies are around $10k or better per year and going higher. Considering all the new miracle treatments that save lives, it’s worth every penny. Retailers are under pressure because wages are kept so low due to health care being such a big part of the compensation package. Still there are a lot of people who want to keep the status quo. Maybe its worth $10-15k a year out of pocket of having the convenience of being seen by a doctor at my convenience and not standing on line behind the formerly uninsured.
Absolutely! This problem is huge and of strategic importance to all of us. It seems to me, however, that one idea may be to reverse the question from, does the industry have the size and influence to do something to, given who we are, what can we do, since doing something, i.e., making some progress is really going to be critical?
Definitely, the retail industry should be helping to define health care reform. Collectively, the industry employs more workers than any other industry. And it has disproportionate number of under-insured.
Since every retailer is obsessed with reducing costs and reducing employee turnover, health care is enormously relevant. The best ways to attack the cost issue is through automation and prevention. The retail industry can take a major step by standardizing employee medical records and the associated claim process. Starbucks has been a leader in offering health care to part-timers. Wal-Mart is now collaborating on health care records. These leaders should be followed.
Regarding prevention, my doctor friends tell me that their waiting rooms and hospitals are filled with people who smoke, drink excessively, take drugs or eat obsessively. As major employers, retailers can attack these abuse problems at the workplace. Work injuries are also a major source of health care costs. This is especially important to an industry where store-based employees are on their feet all day and often required to lift or move heavy boxes. What are the best practices in the retail workplace for taking breaks? Are employees taught how to relieve stress, to stretch? Are they encourage to get the right footwear for their long days on their feet?
Much work to be done and the time is right. National Retail Federation, it’s your move.
The thing that just amazes me about the whole healthcare system is that we keep thinking there are some kind of dramatic changes we can make that will fix it. Essentially, we are dealing with a “universal addiction,” called the “will to live.” Everyone understands that capitalism works best to allocate limited resources to meet demand. But when the demand is unlimited, capitalism has a problem. No amount of tweaking is going to change this.
But there are a lot of ways to make it better. We have all probably faced the need for some kind of medical services. Wouldn’t it be nice if there were some way to find out what the best course of action might be? Next, wouldn’t it be nice to know who can provide those services and what their qualifications and even their track record has been?
We talk about “fact based decision making” in our business choices, but what more important area exists than our medical decisions? It would seem that with the internet available there should be a much easier way to find out what the options are and who provides them. We have all the tools in place. There are professional organizations all over who should be able to compile this type of information, but unfortunately they are too often built to support the members rather than the clients. Instead of policing and certifying their members, they are teaching them how to maximize their professional income.
So, if we are going to give people more responsibility for making good healthcare decisions the first step should be to give them the tools they need to do it.
Just a couple of thoughts:
– Healthcare was not intended to be an entitlement. It was a fringe benefit assigned to attract quality employees.
– Anything free or cheap is certain to be abused… runs to the ER for the flu, elective surgery disguised as something else, ad nauseam.
– Free markets would dictate that those who use the system more frequently should pay higher costs. There is then the incentive to prevent rather than cure.
– EVERY employee should have to pay for healthcare costs, sharing in premiums as well as deductibles.
– If we follow common sense guidelines and responsible behavior, the resources will exist to care for the uninsured, and healthcare costs will decline.
– Getting the government involved and increasing entitlements is like leaving the bank vault wide open and going home.
Who has more human traffic than retail stores? Certainly not churches or schools. There are 1.1 million retail locations in America. If only 5% of those locations collected 100 signatures each on a petition for simple healthcare reforms, that would be 5 million voters. Think politicians would ignore 5 million voters’ names and addresses?
More and more elections are being decided with ultra-narrow margins. And what if 10% of the retail locations collected 250 signatures each? That would be 27.5 million signatures. It’s easy to ignore a few CEOs. How easy is it to ignore millions of voters?
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It’s not just retail but all businesses. Health care is expensive. Family policies are around $10k or better per year and going higher. Considering all the new miracle treatments that save lives, it’s worth every penny. Retailers are under pressure because wages are kept so low due to health care being such a big part of the compensation package. Still there are a lot of people who want to keep the status quo. Maybe its worth $10-15k a year out of pocket of having the convenience of being seen by a doctor at my convenience and not standing on line behind the formerly uninsured.
Absolutely! This problem is huge and of strategic importance to all of us. It seems to me, however, that one idea may be to reverse the question from, does the industry have the size and influence to do something to, given who we are, what can we do, since doing something, i.e., making some progress is really going to be critical?
Definitely, the retail industry should be helping to define health care reform. Collectively, the industry employs more workers than any other industry. And it has disproportionate number of under-insured.
Since every retailer is obsessed with reducing costs and reducing employee turnover, health care is enormously relevant. The best ways to attack the cost issue is through automation and prevention. The retail industry can take a major step by standardizing employee medical records and the associated claim process. Starbucks has been a leader in offering health care to part-timers. Wal-Mart is now collaborating on health care records. These leaders should be followed.
Regarding prevention, my doctor friends tell me that their waiting rooms and hospitals are filled with people who smoke, drink excessively, take drugs or eat obsessively. As major employers, retailers can attack these abuse problems at the workplace. Work injuries are also a major source of health care costs. This is especially important to an industry where store-based employees are on their feet all day and often required to lift or move heavy boxes. What are the best practices in the retail workplace for taking breaks? Are employees taught how to relieve stress, to stretch? Are they encourage to get the right footwear for their long days on their feet?
Much work to be done and the time is right. National Retail Federation, it’s your move.
The thing that just amazes me about the whole healthcare system is that we keep thinking there are some kind of dramatic changes we can make that will fix it. Essentially, we are dealing with a “universal addiction,” called the “will to live.” Everyone understands that capitalism works best to allocate limited resources to meet demand. But when the demand is unlimited, capitalism has a problem. No amount of tweaking is going to change this.
But there are a lot of ways to make it better. We have all probably faced the need for some kind of medical services. Wouldn’t it be nice if there were some way to find out what the best course of action might be? Next, wouldn’t it be nice to know who can provide those services and what their qualifications and even their track record has been?
We talk about “fact based decision making” in our business choices, but what more important area exists than our medical decisions? It would seem that with the internet available there should be a much easier way to find out what the options are and who provides them. We have all the tools in place. There are professional organizations all over who should be able to compile this type of information, but unfortunately they are too often built to support the members rather than the clients. Instead of policing and certifying their members, they are teaching them how to maximize their professional income.
So, if we are going to give people more responsibility for making good healthcare decisions the first step should be to give them the tools they need to do it.
Just a couple of thoughts:
– Healthcare was not intended to be an entitlement. It was a fringe benefit assigned to attract quality employees.
– Anything free or cheap is certain to be abused… runs to the ER for the flu, elective surgery disguised as something else, ad nauseam.
– Free markets would dictate that those who use the system more frequently should pay higher costs. There is then the incentive to prevent rather than cure.
– EVERY employee should have to pay for healthcare costs, sharing in premiums as well as deductibles.
– If we follow common sense guidelines and responsible behavior, the resources will exist to care for the uninsured, and healthcare costs will decline.
– Getting the government involved and increasing entitlements is like leaving the bank vault wide open and going home.
Who has more human traffic than retail stores? Certainly not churches or schools. There are 1.1 million retail locations in America. If only 5% of those locations collected 100 signatures each on a petition for simple healthcare reforms, that would be 5 million voters. Think politicians would ignore 5 million voters’ names and addresses?
More and more elections are being decided with ultra-narrow margins. And what if 10% of the retail locations collected 250 signatures each? That would be 27.5 million signatures. It’s easy to ignore a few CEOs. How easy is it to ignore millions of voters?