Wal-Mart backs Democratic plan to cut healthcare costs

WASHINGTON Thu Aug 2, 2012 2:28pm EDT

Products are displayed outside a Wal-Mart Neighborhood Market store in Bentonville, Arkansas, May 31, 2012. REUTERS/Jacob Slaton

Products are displayed outside a Wal-Mart Neighborhood Market store in Bentonville, Arkansas, May 31, 2012.

Credit: Reuters/Jacob Slaton

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WASHINGTON (Reuters) - Wal-Mart Stores Inc, the largest private employer, endorsed a new Democratic proposal for controlling healthcare spending that would seek to keep the rising cost of medical services in line with wage growth.

The giant retailer said on Thursday that the plan co-authored by former Obama and Clinton administration officials contained "innovative methods" that could help slow healthcare spending and improve the quality of healthcare delivery.

With 1.4 million employees and retailing operations in all 50 states, the Bentonville, Arkansas-based company represents a major force on employer-related issues and was an early advocate of President Barack Obama's healthcare reforms.

Women who shop at its big-box superstores are also viewed as crucial swing voters in the 2012 election battle between Obama and his likely Republican challenger, Mitt Romney.

"These principles are a strong foundation that can set the U.S. healthcare system on a path of sustainable growth," Sally Welborn, Wal-Mart's senior vice president for benefits, said in a statement issued by the company.

"Businesses in particular have an immediate need for value and innovation so that we have a health care delivery system that rewards quality and efficiency," she added.

The proposal appeared in the New England Journal of Medicine, with 23 co-authors led by former Obama healthcare adviser Dr. Ezekiel Emanuel, and backing from the progressive think tank Center for American Progress.

In 2009, Wal-Mart joined with the Center for American Progress and the Service Employees International Union to urge the president to pursue reform partly to "remove the burden that is crushing America's businesses and hampering our competitiveness in the global economy."

Healthcare has become a major cost issue for employers in recent decades, with spending far outpacing economic growth and inflation until recent years.

The U.S. healthcare system, which is expected to generate $2.8 trillion in spending this year, is the world's most expensive at a cost of more than $8,400 a year for every man, woman and child.

While growth in healthcare costs has slowed in recent years, government forecasters warn that costs will accelerate to reach $4.8 trillion in 2021. Within 25 years, healthcare spending in the United States is expected to account for one-quarter of the economy and 40 percent of total federal spending.

Many U.S. employers have responded to rising healthcare costs by scaling back benefits and shifting a larger portion of the charges to their employees.

Wal-Mart trimmed some health coverage for its U.S. employees starting last January. The retailer no longer offers insurance to new part-time employees working less than 24 hours a week, charges tobacco users more for coverage and has cut in half the amount it puts in employees' healthcare expense accounts.

Obama's Patient Protection and Affordable Care Act includes provisions that aim to encourage lower-cost healthcare practices. But both Democrats and Republicans agree that new steps are necessary to contain costs.

The Emanuel proposal also calls on private insurers, Medicare, Medicaid and employers to negotiate statewide payment rates for healthcare providers that would limit per capita healthcare spending growth to local average wage growth.

It also calls for a more aggressive move away from fee-for-service medicine, greater price transparency, insurance plans that favor high-quality providers, wider use of non-physician professionals such as nurse practitioners and liability protections for doctors who practice low-cost, high-quality methods of delivering care.

The New England Journal of Medicine also published an article outlining proposals favored by Republicans that call for limiting tax advantages for employer-sponsored health insurance and moving the popular Medicare program for the elderly and disabled toward a premium support model that would help beneficiaries purchase private insurance.

(Editing by Dan Grebler)

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Comments (4)
MidwestVoice wrote:
‘Premium support model’ as Medicare replacement? That is rich! Why not open up Medicare to anyone who is not eligible for health insurance through an employer? I would love to be able to pay premiums for Medicare coverage rather than the mess I pay for now – that I my spouse can’t even purchase due to a bypass years ago.

Currently I have a $10K annual deductible (yes, if I fall in December I owe a new deductible in January even for the same injury) and my spouse only has a policy covering accidental injury. I can not imagine the premiums and high deductibles that would be associated with someone say, 85 or 90 years old!

But, I guess it must get worse before it gets better. Those lucky enough to have good employer sponsored insurance better hope they don’t get laid off and shift to the other side! I can only dream of an America where ALL citizens have access to basic healthcare and then have the option to buy upgrades if they feel it necessary. It would be much more efficient if all doctors/providers/hospitals knew what was covered and could provide it and electronically bill one central provider (rather than a million different insurance companies with differing requirements and coverages); patients requesting additional services or non-covered services could pay for those individually. It would make so much more sense than having Medicare, Medicaid, VA, and a slew of private coverages. Of course, that would de-fund a lot of very well paid CEOs which means its utterly out of the question in this country!

Aug 02, 2012 3:03pm EDT  --  Report as abuse
thausner wrote:
Excellent proposal by these authors. During a presentation at the Center for American Progress one of the authors cited that the Affordable Care Act has already lowered the rate of health spending. http://tinyurl.com/bvxn8hn please join our National and Maryland Health Care Reform Teams for Obama.

Aug 03, 2012 4:33pm EDT  --  Report as abuse
ArtAsInquiry wrote:
I give talks about how the healthcare law strengthens Medicare. I come in contact with many seniors.

The Ryan budget moves Medicare to a voucher program eventually. I can’t imagine the seniors I see shopping for a plan on the private market. The confusion would be great.

This shift to a voucher program would foist an unimaginable amount of stress into the lives of seniors. Really not good

Aug 05, 2012 2:09pm EDT  --  Report as abuse
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