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Mackey Takes a Stand on Health Care

John Mackey, the chairman and chief executive officer of Whole Foods Market here, says he has some ideas for health care reform. And yes, he does believe reform needs to occur, despite his well-known preference for limited government and free-market forces. We need health care reform because the current system the way it is managed and regulated is

Mackey Takes a Stand on Health Care

AUSTIN, Texas — John Mackey, the chairman and chief executive officer of Whole Foods Market here, says he has some ideas for health care reform.

And yes, he does believe reform needs to occur, despite his well-known preference for limited government and free-market forces.

“We need health care reform because the current system — the way it is managed and regulated — is getting more and more expensive,” he said in a recent interview on Reason.tv.

The interview followed his controversial August editorial in the Wall Street Journal, in which he called for more personal responsibility in health care and less government involvement. In it, he listed eight suggestions to improve the nation's health care system, mostly by reducing current government restrictions.

“We need to empower individuals and markets to drive down costs,” he told Reason.tv.

In the interview, he explained how the company-funded health insurance plan implemented in 2003 works at Whole Foods, using a combination of health savings accounts and high-deductible insurance to keep costs low and incentivize workers to be judicious in their use of health care.

Whole Foods pays the premium in full for all workers who put in 30 hours or more per week, and funds up to an additional $1,800 per year per worker for a “personal wellness account,” which employees can use for their health care needs as they wish. The insurance itself costs Whole Foods about $2,200 per year for each single worker and $5,000 per year for families, making it much cheaper than most business insurance premiums, Mackey explained.

The deductible is about $2,500, meaning that employees pay for most minor treatment themselves — and thus become more careful users of medical care, he said.

More than 90% of the company's workers make no use at all of the insurance, Mackey said during the Reason.tv interview.

Although he conceded that the insurance strategy Whole Foods deploys is not by itself an answer to reforming health care, Mackey said it could be applied to about 10 million people in the U.S.

“High-deductible insurance and health care spending accounts are a robust combination,” he said.

Obviously, as a leading retailer of natural and organic products, Whole Foods also takes its health and wellness merchandising seriously. Although it does not offer pharmacies in any of its stores, it carefully monitors the ingredients of its products, and prohibits a range of chemical additives.

In an extended version of his letter to the Wall Street Journal, posted on Whole Foods' website, Mackey cited research showing that “a diet consisting of whole foods which are plant-based, nutrient dense and low-fat will help prevent and often reverse most of the degenerative diseases that are killing us, and becoming more and more expensive to treat through drugs and surgery.”