Interesting piece in the Wall Street Journal over the weekend called “The Conscience of a Capitalist,” looking at Whole Foods CEO John Mackey. While the piece begins with a discussion of his recent Journal op-ed piece about health care – which created some controversy because he was dismissive of the Obama administration’s priorities, a position that outraged liberals who thought the founder of their favorite grocery store was more in tune with their political leanings – it also explores some of Mackey’s opinions on other issues.
Regarding his health care essay, Mackey says, "I honestly don't know why the article became such a lightning rod. I think a lot of people who got angry haven't read what I actually wrote. There was a lot of emotional reaction—fear and anger. I just wanted to get people to think about whether there was a better way to reform the system … President Obama called for constructive suggestions for health-care reform. I took him at his word … It just seems to me there are some fundamental reforms that we've adopted at Whole Foods that would make health care much more affordable for the uninsured … I regret the controversy that it caused for Whole Foods, but I don't regret writing it, because I think what I said is true and it needed to be said. I wasn't seeing anyone else saying it."
According to the story, “Mr. Mackey says that combining ‘our high deductible plan (patients pay for the first $2,500 of medical expenses) with personal wellness accounts or health savings accounts works extremely well for us.’ He estimates the plan's premiums plus other costs at $2,100 per employee, and about $7,000 for a family. This is about half what other companies typically pay. ‘And,’ he is quick to add, ‘we do cover pre-existing conditions after one year of service.’
“Whole Foods also puts several hundred dollars into a health savings account for each worker. This money can be used to cover routine medical expenses, like drug purchases or antismoking programs. If that money is not used in a year, the workers can save the money to pay for expenses in later years.
The primary focus, Mackey says, is not just to make the system more affordable, but also make the people it in more accountable for their own health., something that he believes many of the current proposals ignore. "The assumption … is that people don't care about their own health, and that somebody else has to—a nanny or somebody has to take care of me because people are too stupid to make these decisions themselves. That's not been our experience. We find our team members [employees], not surprisingly, seem to care a whole lot about their health."
While some liberals may find this to be anathema to their own positions, Macke also makes the case to the Journal about something he calls “conscious capitalism..” He describes it this way:
“It means that business has the potential to have a deeper purpose. I mean, Whole Foods has a deeper purpose. Most of the companies I most admire in the world I think have a deeper purpose … I've met a lot of successful entrepreneurs. They all started their businesses not to maximize shareholder value or money but because they were pursuing a dream."
He goes on: "I think that business has a noble purpose. It's not that there's anything wrong with making money. It's one of the important things that business contributes to society. But it's not the sole reason that businesses exist … just like every other profession, business serves society. They produce goods and services that make people's lives better. Doctors heal the sick. Teachers educate people. Architects design buildings. Lawyers promote justice. Whole Foods puts food on people's tables and we improve people's health … And we provide jobs. And we provide capital through profits that spur improvements in the world. And we're good citizens in our communities, and we take our citizenship very seriously at Whole Foods."
Regarding his health care essay, Mackey says, "I honestly don't know why the article became such a lightning rod. I think a lot of people who got angry haven't read what I actually wrote. There was a lot of emotional reaction—fear and anger. I just wanted to get people to think about whether there was a better way to reform the system … President Obama called for constructive suggestions for health-care reform. I took him at his word … It just seems to me there are some fundamental reforms that we've adopted at Whole Foods that would make health care much more affordable for the uninsured … I regret the controversy that it caused for Whole Foods, but I don't regret writing it, because I think what I said is true and it needed to be said. I wasn't seeing anyone else saying it."
According to the story, “Mr. Mackey says that combining ‘our high deductible plan (patients pay for the first $2,500 of medical expenses) with personal wellness accounts or health savings accounts works extremely well for us.’ He estimates the plan's premiums plus other costs at $2,100 per employee, and about $7,000 for a family. This is about half what other companies typically pay. ‘And,’ he is quick to add, ‘we do cover pre-existing conditions after one year of service.’
“Whole Foods also puts several hundred dollars into a health savings account for each worker. This money can be used to cover routine medical expenses, like drug purchases or antismoking programs. If that money is not used in a year, the workers can save the money to pay for expenses in later years.
The primary focus, Mackey says, is not just to make the system more affordable, but also make the people it in more accountable for their own health., something that he believes many of the current proposals ignore. "The assumption … is that people don't care about their own health, and that somebody else has to—a nanny or somebody has to take care of me because people are too stupid to make these decisions themselves. That's not been our experience. We find our team members [employees], not surprisingly, seem to care a whole lot about their health."
While some liberals may find this to be anathema to their own positions, Macke also makes the case to the Journal about something he calls “conscious capitalism..” He describes it this way:
“It means that business has the potential to have a deeper purpose. I mean, Whole Foods has a deeper purpose. Most of the companies I most admire in the world I think have a deeper purpose … I've met a lot of successful entrepreneurs. They all started their businesses not to maximize shareholder value or money but because they were pursuing a dream."
He goes on: "I think that business has a noble purpose. It's not that there's anything wrong with making money. It's one of the important things that business contributes to society. But it's not the sole reason that businesses exist … just like every other profession, business serves society. They produce goods and services that make people's lives better. Doctors heal the sick. Teachers educate people. Architects design buildings. Lawyers promote justice. Whole Foods puts food on people's tables and we improve people's health … And we provide jobs. And we provide capital through profits that spur improvements in the world. And we're good citizens in our communities, and we take our citizenship very seriously at Whole Foods."
- KC's View:
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The discussion about whether Mackey should have written the piece for the Journal is an old one, and I don't want to reanimate it here. There are good arguments on either side, and since the company’s stock price is up over the past month, let’s assume for the moment that he didn’t do any catastrophic damage to Whole Food’s fortunes. It isn’t the only measurement, of course, and there is still some grumbling out there about boycotts…but Whole Foods and Mackey seem to have survived the controversy.
There’s a lot that Mackey says about health care that makes a lot of sense, though I think it could be fairly argued that maybe Whole Foods’ employees are more motivated than most people to be accountable for their own physical well-being. That said, I think that people should have skin in the game – your insurance should be lower if you take better care of yourself. Of course, there should be exceptions, and insurance companies should be forced to cover pre-existing conditions and prevented from throwing people out of their plans when they get sick.
I suspect that a lot of American citizens are like me at this point – they are confused and frustrated by all the debate and argument, and suspect that when it all is done, things are going to be a bigger mess than before the debate began. And yet, most of also feel that while our health care system is a good one, our insurance system is lousy…and that something needs to be done about that to make sure that people who want to be covered are covered, and that people aren’t being bankrupted by health care costs.
To be honest, I have no idea how to get there. But my sense is that with all the debate going on in Washington and elsewhere, we’re not really getting closer to a solution that is going to solve the real problems.
As for “conscious capitalism,” I agree with Mackey that the companies and businesspeople I tend to admire are the ones who seem to have a vision or a dream…not the ones who pursue the buck for the sake of a buck. Those also tend to be the companies that have bred innovation into their cultures. There is much to be admired there.
