Remove Legal Obstacles to Allowing High Deductible Plans

August 30 2009

Social responsibility meets politics meets economics. John Mackey, the CEO of Whole Foods, wrote an op-ed piece that appeared in the Wall Street Journal on August 12, 2009.[1] Mr. Mackey’s piece was about the proposed legislation to reform health care, a piece that focused on “less government control and more individual empowerment.” Mr. Mackey included in his piece several suggestions for reform that were largely contrary to the House bill pending:

·  Remove legal obstacles to allowing high deductible plans

·  Equalize tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits

·  Repeal all laws that prohibit insurance companies from competing across state lines

·  Repeal government mandates on what insurers must cover

·  Enact tort reform

·  Make costs transparent

·  Enact Medicare reform

·  Revise tax laws to provide deductions for those who want to contribute to help others obtain health insurance

In the same piece, Mr. Mackey also admonished Americans to eat healthier food, lose weight, and, as a result, be healthier. Of course, Mr. Mackey’s chain focuses on a theme of healthy eating, a theme that distinguishes the chain in its marketing and merchandise.

Mr. Mackey allows his employees to vote on the types of health benefits they want and noted that his Canadian and British employees opt for supplemental health care coverage so that they can purchase better care than their governments provide.
Mr. Mackey does provide health care coverage for all of his employees and is known as a model CEO for his willingness to accept a salary of $1, instead relying on increase in value of the company’s stock for his compensation. Mr. Mackey is also well known and respected in the social responsibility community and investment funds. He has been singled out by many groups for his ethical business practices.
However, as a result of his op-ed piece, there are both online and on-site boycotts of his stores by those who favor the government option in health care reform. The backlash has been strong with long-time Whole Food customers halting their patronage of the store. On the other hand, Mr. Mackey has gained customers from those who favor his types of reforms.

How would Milton Friedman respond to Mr. Mackey’s actions in writing the editorial? Is there a socially responsible approach to health care? Is it the government option? How does that option compare with Mr. Mackey's proposals? Is it ethical for customers to boycott? Is there a risk for businesses and executives when they become involved in social and political issues? Evaluate the constitutional law issue in this situation: the flaws in the “free speech” responses to the boycotts of Whole Foods.

FOR MORE INFORMATION

John Mackey, “The Whole Foods Alternative to ObamaCare,” Wall Street Journal, August 12, 2009, p. A15.

[1] Mr. Mackey has appeared in the Website updates before for his foray into sock-puppeting. July 10, 2007. For more information, see Andrew Martin, “CEO of Whole Foods Extolled His Stock Online,” New York Times, July 13, 2007, pp. C4,