business news in context, analysis with attitude

by Kevin Coupe
Like a lot of people, we found yesterday's story in The Wall Street Journal about Wal-Mart's health care policies to be fascinating, even depressing reading. (We're pretty sure that the United Food and Commercial Workers will be adding the piece to its sales brochure for why Wal-Mart employees need to be unionized.)

Let’s see if we can cut to the chase here…

According to the WSJ, Wal-Mart makes new hourly workers wait six months to get benefits, and doesn't cover its retirees at all. Its deductibles can be as high as $1,000, and won't cover pre-existing conditions in the first year of coverage. And Wal-Mart doesn't cover things like flu shots, eye exams, childhood vaccinations, and chiropractic services. As a result, Wal-Mart's spending on health care benefits for each of its employees was roughly $3,500, or a third less than the rest of the nation's retail industry.

And this was according to The Wall Street Journal - not some leftist rag looking to tear down a major US corporation.

At the same time, the WSJ notes that Wal-Mart's philosophy of preferring to cover 100 percent of catastrophic health care costs can result in some moving anecdotes - the child who requires millions of dollars in care, for example, mostly covered by Wal-Mart's insurance policies.

We recognize that there are varying points of view here, and that Wal-Mart probably would justify its policies by saying that it has a major responsibility to its shareholders to be the most profitable company possible, and keeping health care costs in line is one way of doing that. And we know that a lot of other retailing entities probably are envious of Wal-Mart's health care cost structure, and would like to emulate it.

But we're also fairly sure that if Lee Scott or any of the other top executives at Wal-Mart need to get their kids immunized, or get their eyes checked, or even just a checkup, their ample salaries and bonuses make it exceedingly possible.

That same ease may not exist for the hourly worker who has a couple of kids, and who is struggling to make ends meet. In fact, Wal-Mart is known for keeping the hours down on part-time workers so that they don't qualify for benefits. In places where Wal-Mart is the major employer, or even the only employer, what are the options?

Anecdotes that support catastrophic health care coverage are just that. They make nice news copy, and we don't doubt the fact that in certain cases, this kind of coverage really makes a difference.

We happen to know something about this, however, because for a long period of our life that's the only coverage we had for our family. We were freelancing, our wife wasn't working, and the only kind of health coverage we could afford was the catastrophic kind - it was expensive, and for day-to-day issues, it was useless. Luckily, we didn't face any major problems, ort we would have had a nice anecdote to share. No, we just had to deal with the flu, and viruses, and the various bumps and bruises of childhood that can send you to the doctor's office, but scarcely qualify for any kind of coverage.

The fact that Wal-Mart - the biggest, most profitable retailer in the world, and a company that trumpets its commitment to family values - takes this approach to covering its employees' health care costs seems unconscionable.

We're not suggesting that Wal-Mart lose all fiscal sense in changing its policies. (We don't think that anything short of broad unionization would force such a change, which is just one of the reasons the company fights the UFCW so diligently.) And we don't think that Wal-Mart is operating in a vacuum - it has been forced into this approach by a health care system that clearly is too expensive for many Americans - witness the sudden popularity of Canadian prescription medications.

But we see little compassion, little heart in the policies described by The Wall Street Journal. Which makes its public relations efforts and advertising campaigns that stress its small-town soul and people-oriented policies seem like so much hypocrisy.

It's all a crock. And it makes us despair about the future.
KC's View: