Wal-Mart Expands Healthcare Benefits

Discussion
Feb 24, 2006
George Anderson

By George Anderson


Harry Whittington could have learned a lesson from Wal-Mart. A moving target is the hardest to hit.


The world’s largest retailer has quickly responded to criticism over its healthcare benefits program and the passage of the so-called Wal-Mart bill in Maryland by reducing the timeframe required for part-timers to join the program, extending benefits to associates’ children and expanding the availability of the lowest-cost plan the company offers to half of its associates by next year. It also announced it would build 50 health clinics in its stores this year.


Wal-Mart’s CEO Lee Scott is due to make a speech before the National Governors Association this weekend, according to a Dow Jones Newswire report, where he will call for “a new commitment from leaders in government and business to help solve the healthcare challenges facing America’s employers and working families.”


Mr. Scott will say that the need for government action is clear because, “The soaring cost of healthcare in America cannot be sustained over the long term by any business that offers health benefits to its employees.”


While Wal-Mart is the focal point for criticism in much of the healthcare debate, Mr. Scott will tell the governors that his company is “already among the largest providers of private-sector health insurance in the nation — with more than 1 million covered lives.”


Wal-Mart’s critics were not swayed by the announcement. Paul Blank, campaign director for WakeUpWalMart.com, said in a released statement, “While Wal-Mart’s proposed changes to their health care plan are certainly long overdue, and we certainly support expanding benefits to part-timers, the Wal-Mart health care crisis infecting America cannot be solved by publicity stunts. Wal-Mart’s proposed changes are clearly designed to try and salvage a faltering public image, rather than make substantive changes to improve health care benefits for its employees.”


Moderator’s Comment: Do you agree with the statement: “The soaring cost of healthcare in America cannot be sustained over the long term by any business
that offers health benefits to its employees.” If so, how should the retail industry be responding to this situation? Are there any individual companies that you can point to
that have created unique responses to deal with this challenge?

George Anderson – Moderator

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9 Comments on "Wal-Mart Expands Healthcare Benefits"


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Mark Lilien
Guest
15 years 7 days ago

Since so many retailers offer lousy or no health benefits, those who do can be choosier about whom they hire. My understanding is that Costco has decent benefits and pays superior wages in exchange for being able to recruit and retain the best people. Retailers whose goal is to pay the least with the least possible benefits get the staff who can’t qualify for the choosy employers. Wal-Mart sees recruitment and staff retention similarly to how it sources merchandise: find the lowest cost possible. The company’s fastest growth occurred when the compensation included great appreciation on the stock price, which made many employees into millionaires. That is why the Wal-Mart pioneers accepted lousy wages and lousy benefits. More recently, the stock hasn’t been very exciting, so why should the best people work at Wal-Mart?

Stephan Kouzomis
Guest
Stephan Kouzomis
15 years 7 days ago
Well, isn’t it a coincidence how public pressure and state governments can assist corporations to rethink their medical / health insurance coverage program? Wall Street has to give some relief to the “hit the number” mentality that it comes up with for business entities… unbelievable; and it assists in some executives to act illegally (don’t need to mention any companies). Outrageous…. The corporations, with all their cost cutting and multi millions paid to some executives, must seek ways to offer reasonable medical / health coverage. There is so much waste in corporations anyway. Corporate brats know this to be the case. Consumers today question how multi billion dollar corporations say “THEY CAN’T COVER MEDICAL / HEALTH COSTS.” Just think of the smaller firms who have offered innovative methods, like a share program. Interestingly, Wal-Mart is finding the way, even though it could do more. Wall Street, Corporations and Medical / Health / Care entities better find new and innovative ways. Or, you may see more states forcing certain percent levels of corporate sales to be… Read more »
Gary Joyner
Guest
Gary Joyner
15 years 7 days ago
Interesting that health care providers seem to be able to operate with impunity in terms of pricing their services, passing along costs on a direct basis, regardless of inefficiencies in their business. Even with insurers setting standard reimbursable amounts for various services, the consumer has borne the difference with a sort of “oh well” attitude, seeming to accept that the progression of costs is inevitable albeit unjustifiable. I mean, we all need health care, right? And we all want the best, right? And the best costs money, right? Of course, on a comparative basis, we in the US don’t always score at the top of that pyramid. At the same time, when companies in the retail or manufacturing segments balk at covering those skyrocketing costs, they are labeled as the bad guys in the equation. Yes, there have been abuses and there has been exploitation on the part of businesses in every sector, Wal-Mart included. It would seem that the pressure for change should be applied not only in the direction of those who fund… Read more »
David Livingston
Guest
15 years 7 days ago
Most retailers offer about the same level of benefits. Higher paying retailers don’t get the criticism because more of their employees can afford them. However, they are also a bit more selective on who they hire. What Wal-Mart is doing doesn’t really impress me. Sure they can get more people on the insurance rolls but this watered down plan has watered down benefits. This could actually hurt employees. Most state sponsored plans will boot people off if an employer sponsored plan is offered to them. These state sponsored plans offer superior benefits. The Wal-Mart plan only benefits those who have absolutely no insurance at all. It should not be a replacement for Medicaid and such. Yes, I agree with Mr. Scott’s statement. With a family health plan costing about $11,000 a year for most people, only the most productive retail employees are worthy of the benefit. Given the nature of retail which relies on high turnover and low wage employees, retailers end up looking bad because they cannot afford to provide benefits. Mark pointed out… Read more »
Ed Dennis
Guest
Ed Dennis
15 years 7 days ago
Healthcare is a major problem but there are ways to combat what would seem to be “out of control costs”. 1. Join a health care plan at the very highest “out of pocket” level. WHY – this reduces your premium cost to the lowest possible level but still provides you the benefit of the insurer’s negotiated cost on procedures. Example: I had some minor surgery and the combined cost was $4000. However, the negotiated cost for the procedure was $980. I had to pay it all but saved $3020 on the procedure. 2. Ask the providers if they will accept cash payment in advance at 70% of the negotiated rate. This would reduce cost on the $980 above to $686. Many physicians will agree to this because insurance companies hold up payment for months. Some even approach doctors and offer to pay a fraction of what they owe them immediately in exchange for delayed payment of the full amount owed. 3. Take care of yourself, quit smoking, buy prescriptions from COSTCO, drink moderately. The easiest… Read more »
Larry Garascia
Guest
Larry Garascia
15 years 7 days ago
The USA is the only country in the free world that does not provide government sponsored health care. The US has too many uninsured citizens, including children. This is a shame! As a result, we pay too much for health care. The national and state governments need to come together with the business community and draw up plans for a national health care system which can be one third funded by companies, one third by the employee and one third by the state and federal government through some type of taxation program. And, it can be very high quality health care. My contribution for company provided health care is $230 each month and it goes up every year. Where does it end? If I loose my job and have to go on COBRA, I would be paying $825 a month! The upwards spiraling cost of health care has to be contained. Employers cannot continue to absorb the increasing expenses and at what point does an employee, who is also a consumer, quit spending money to… Read more »
Murtok SIx
Guest
Murtok SIx
15 years 7 days ago

Here is my take. People on state healthcare (as many Wal-Mart employees apparently are) follow this thinking when needing healthcare services. I know people who, when they need a refill, make it a point to go to the emergency room. Their reasoning is since it’s all covered, why should they have to (gasp!) wait at an in-store clinic. These low-income consumers (many or whom work for Wal-Mart) have no intention of changing their thinking. SO, if these people get Wal-Mart insurance, they will continue to do the same thing.

I know someone who doesn’t like to make concrete appointments, so it’s “better for me” (her words) to use urgent care or the ER. This is the same person who went to the ER for dry skin. They told her to buy skin cream at Walgreens.

Chuck Chadwick
Guest
Chuck Chadwick
15 years 6 days ago

Globalization is an importance component. Many countries have national healthcare and pension programs. This factor impacts U.S. companies’ competitiveness. It isn’t whether or not it’s fair, but the question is how do we address this issue so we create a level playing field for our companies?

Daryle Hier
Guest
Daryle Hier
15 years 6 days ago

Healthcare is definitely a problem because we have a society that is told it must be taken care of (I believe several failed socialist countries thought the same). The US is the only country in the free world not providing government-sponsored healthcare? … Not technically true but essentially it doesn’t and thank goodness. Every citizen can walk into a hospital in the USA and receive care – and they don’t have to wait!

Take care of yourself and I agree with sales_pro who has the right idea as I’ve the done the same myself. How healthcare became a right; what a shame indeed. Government is never the right answer.

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