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How Whole Foods Market Innovates in Employee Health Care

Harvard Business Review

Providing employee health care has become a real challenge for businesses, especially in the United States, where costs keep rising inexorably. Though I regret my poor choice of words in describing Obamacare as fascism, clearly something needs to be done to bring affordable, quality healthcare to everyone in this country. I simply think that free enterprise — where people voluntarily exchange for mutual benefit — is a better answer than any government-mandated or -controlled program.

Companies can make a big difference for their employees — providing good health insurance and promoting good health — all while keeping costs down. I call companies who operate this way "conscious businesses" because they understand that health care should not be only about containing costs — it should be about helping people lead healthy, vibrant, fulfilling lives. I have tried to build my own company on these principles. For example, Whole Foods Market is combating rising health-care costs through a range of innovative health-care and wellness plans:

Health insurance plan: As a self-insured company, we spent over $200 million in fiscal 2011 on health care for our team members (this is how we refer to "employees" at WFM). The fact that we are self-insured — the company itself pays their health claims, not an outside insurance company — makes us prudent about our costs. Our plan is based on two programs that work together: a high-deductible plan to pay for catastrophic needs and a personal wellness account (funded by the company either as a health reimbursement account or a health savings account).

Healthy Discount Incentive Program: Beyond insurance, WFM places a huge emphasis on improving health and well-being. This innovative program, based on each team member's degree of wellness, offers additional store discounts beyond the standard 20% that all team members receive. The extra discount is based on meeting certain biometric criteria for cholesterol levels, body mass index, height-to-waist ratio, and blood pressure, along with being nicotine free. There are four additional levels of discounts based on the team member's score, from 22% to 30%.

Total Health Immersion: We offer our sickest team members and those most at risk for getting ill — those who are obese, have heart disease or diabetes, or have very high cholesterol or blood pressure — the opportunity to attend this innovative program. At the company's expense, these team members can go to a medically-supervised program where they receive intensive training in healthy eating and living. Team members often see so much progress in seven days that they realize they can take control of their health for the rest of their lives. Dozens have lost over a hundred pounds each in less than a year. Heart disease and diabetes have been reversed. People with Type 2 diabetes (which doctors say is incurable) can stop taking insulin — in 30 to 90 days. Team members willing to make radical lifestyle changes have made amazing gains in their health — so much so that we've decided to extend this opportunity to spouses and domestic partners of team members.

WFM is not only lowering costs, but transforming lives. Many other companies, too, such as those listed on Best Places to Work lists, are designing programs to offer affordable health insurance and promote the health and well-being of their employees.

While I hope the country continues to engage in vigorous debate about how to address the growing health care crisis, ultimately it is free enterprise that will generate the higher levels of innovation needed to solve this enormous problem.

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