It just doesn’t get better than this. An internal memo sent to Wal-Mart’s Board of Directors proposes how to minimize health care spending while limiting damage to the Company’s reputation. Click here to read the New York Times account which includes a link to the actual memo. So much here to digest, and so little space. Some tidbits… (“Associates” is Wal-Mart’s euphemism for “workers.”)
“Most troubling, the least healthy, least productive Associates are more satisfied with their benefits than other segments and are interested in longer careers with Wal-Mart.”
“Associates rank health insurance as the most important benefit Wal-Mart offers, but they also say it is the one with which they are least satisfied.”
“Healthcare is one of the most pressing reputation issues facing Wal-Mart. Survey work done last summer shows that people’s perception of our wages and benefits is a key driver of Wal-Mart’s overall reputation. … Moreover, federal and state governments are increasingly concerned about healthcare costs, and many view Wal-Mart as part of the problem.”
“Our healthcare offering is also vulnerable to attack. … our critics are correct in some of their observations. Specifically, our coverage is expensive for low-income families, and Wal-Mart has a significant percentage of Associates and their children on public assistance. … In 2004, 38 percent of enrolled Associates spend more than 16 percent of the average Wal-Mart income on healthcare. … In total, 46 percent of Associate’s children are either on Medicaid or are uninsured.”
“While critics have not yet harnessed all of these facts, they are successfully exploiting those they do have, suggesting that, when discovered, the others will also become effective ammunition.”
“Consumer-driven health plans are particularly attractive to the healthy, productive Associate segment … Moreover, a growing number of companies are implementing such plans, providing Wal-Mart with more political cover. … The primary reason for making this transition would be to reduce future benefits costs…Wal-Mart will also face reputation challenges in implementing this change given that progressives view such plans as the ‘Republican answer.’”
“We need to be more proactive in the public arena. Three efforts are needed here … Address the Medicaid issue head-on by reframing the debate (e.g., this is everyone’s problem, not just Wal-Mart’s) and by offering some type of counterproposal or compromise. This first effort is critical because Wal-Mart is under serious attack from state governments with regard to the number of Associates on publicly funded health insurance. These attacks show no signs of abating – in fact, they seem to be accelerating – and elected officials are proposing increasingly costly solutions. … Become more engaged in the national healthcare debate in general and on access (e.g., individual mandates) and affordability (e.g., bringing IT to healthcare) in particular. Establishing Wal-Mart as a leader on this critical issue will put us in the position to help shape the outcome of the public debate about the healthcare crisis in a way that is at least somewhat advantageous to our interests.”
Exhibit #5 is titled: “Significant Portion of Associates and Their Children Are Uninsured or on Government Insurance.” Among children of Wal-Mart Associates: 27% are on Medicaid/SCHIP and 19% are uninsured.
Rarely do we see such an unadulterated look at the real thinking of corporate America. Let’s hope this document gets around to policy makers.