Employer Mandate: The Wal-Mart Surprise Regarding Health Insurance

Today the Wall Street Journal and the Twitterverse are buzzing about Wal-Mart coming out in favor of an employer mandate on health insurance.  This news interests me on several levels.  Leaving aside the cynical observation that Wal-Mart is simply seeking to avoid more onerous legislation, this news raises several questions, including the following:

  • As the largest private employer, Wal-Mart has the kind of clout that no other private US employer has: 1.4 million employees is a large pool over which to spread risk. It would be interesting to know to what extend this pool includes young and healthy employees vs. older employees with more extensive healthcare needs.  It may also be interesting to know to what extent Wal-Mart employees fit the stereotypical health profile of low wage earners.  According to a Wal-Mart sourced graph in the WSJ, only 52% of its employees get their insurance through Wal-Mart.  This begs the question “why do the other 48% go elsewhere?”   Does it have to do with coverage being better elsewhere?  This is a real question – I am not trying to imply anything here.
  • With roughly 700,000 lives to cover (50% of 1.4 million), Wal-Mart can offer some efficiencies to insurers that they would not have if all these policies had to be managed within the Individual Market: one standard policy for hundreds of thousands of people, without the need for an underwriter to talk to each one of them.  Does this make an argument in favor of “single payor” and “coverage for everyone?”  After all, the law of large numbers implies that the bigger the pool, the more likely we can determine the “true average” of medical costs.
  • Given its size, Wal-Mart is in a unique position to negotiate price breaks – whether they are for insurance coverage or employee health services (think preventive screening, health education, etc.). Small businesses can’t keep up with that, yet they employ the majority of employees in this country and are at greater risk for increased healthcare costs due to their smaller “pool” of employees.  If small companies are eventually exempted from a mandate, what have we really gained by requiring employers to pay for health insurance?

Philosophical Meanderings

The crux of our healthcare debate lies in the fact that we have a very desirable product, but not enough resources to provide the full extent of this product to everyone.  Doctors have the knowledge and expertise to cure many more diseases and they can extend the lives of many more patients than in the past.  That comes at a cost. By default we are currently rationing access to this product based on who has access to health insurance or who can pay for it through other means.  There has to be a better way.

So, what can we do? First of all, let’s cut through the rhetoric of ideology and political posturing.  As with so many things in life, the real answer falls somewhere between “market forces” and “socialized medicine.” Everyone needs to give a little and everyone needs to take a little more responsibility. By “everyone” I truly mean everybody – because to some extent we are all involved in this debate, regardless of whether we are a taxpayer, patient, provider, insurer or someone engaged in the many industries that support or deal with health care.

Many of us have already started down this path.  I notice more and more discussion about appropriate end-of-life care, whether the expense of a treatment is justified by the expected outcome, whether it is necessary to see a doctor for a particular ailment, how individuals can make healthier life style choices, what role primary care doctors should play in healthcare, and on and on.  Some examples that have recently caught my attention can be found in the “Additional Reading” section at the end.

Looking at all these discussions it seems that the “market forces” are grappling with the “socialized medicine forces” to come up with a blended solution.  That sounds like a promising deal to me – as long as we actually get there.

Additional Reading

Quality of Death: End of Life Care in America

Posted by CommonHealth
Sunday, April 26th, 2009


Candidates Aplenty for Spending on Comparative Effectiveness

June 30, 2009, 4:04 PM ET

WSJ Health Blog


An Open Letter to Dr. David Blumenthal

June 26, 2009
The Health Care Blog


an article pleading for more user-friendly EHR software (EHR: electronic healthcare record) and related discussion

One Reporter’s Painful Decision

by Richard Knox
June 15, 2009
NPR Health Blog

http://www.npr.org/blogs/health/2009/06/by_richard_knox_i_broke.html – deciding when (not) to see a doctor

Advance Directives, Living Wills, and End-of-Life Issues
Up to Date
KCUR Radio
April 16, 2009

Podcast Link: http://archive.kcur.org/kcurViewDirect.asp?PlayListID=6484

Link Source: http://www.practicalbioethics.org/cpb.aspx?pgID=1080

“Guest host Stephen Steigman talks with Center for Practical Bioethics senior fellow Bill Colby and Dr. Karin Porter-Williamson, an assistant professor, section head and Medical Director for Palliative Care services at the KU Medical Center about advance directives and living wills: what we need to have ready, who needs to know it and how to ensure our wishes and those of our loved ones are carried out.”

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