On Thursday’s Stossel show on Fox Business Network, host John Stossel got to do the kind of show he was not able to do earlier this year when he was at ABC, as he devoted an entire show to the debate over access to health care, and gave attention to the market-based plan utilized by most employees of Whole Foods, which uses health savings accounts and encourages employees to shop around for health care, and to conserve their money for use in future years. Whole Foods CEO John Mackey, who has been the target of attacks from socialized medicine advocates despite the popularity of his company’s program with its employees, was the featured guest on Stossel's show, though he and Stossel at one point did get to debate socialized medicine advocate Russell Mokhiber. When Mokhiber cited the dubious statistic that 45,000 Americans die yearly from lack of health insurance, and contended that "zero Canadians die from lack of health insurance," Mackey charged that in Canada, "They oftentimes die from a lack of health care as they wait for services that are rationed by governmental bureaucrats."
While Stossel argued that too much involvement by a third party like insurance companies or government programs have caused health care prices to increase because consumers shop around less, Stossel and Mackey also charged that government regulations that forbid health insurance companies to compete across state lines, and that require insurance companies to cover procedures in their plans that are not desired by many customers, have helped create the problem of high insurance prices:
JOHN STOSSEL: And the regulations now require insurance to cover things I don't want – alcohol treatment, acupuncture, all kinds of things. And I can't buy it from out of state.
JOHN MACKEY: You can't. Imagine if regulations required you to buy certain kinds of food when you came into the store: You must buy that food – you don't want it, maybe you're a vegetarian – but the government decided you need to purchase a certain percentage of meat whether you want it or not, so that's analogous, I think.
MACKEY: Right now, health insurance is regulated by the states. They're not allowed to compete across state lines. And so special interest lobbyists add more and more benefits that have to be covered, and that raises the cost of the health insurance for people making the premiums higher and more expensive. It doesn't allow people to get the exact health insurance that will best suit their own personal needs.
Below is a transcript of portions of the Thursday, December 17, Stossel show on FBN:
JOHN MACKEY, WHOLE FOODS: The problem is, is we don’t have free market health care in the United States. The government controls it. The government has messed it up. We don’t allow competition to work.
JOHN STOSSEL: And even for insurance, one of your points was that you ought to be able to buy it out of state. If New Jersey has stupid rules that make it cost more-
MACKEY: You ought to be able to buy the insurance that you want, and the market will provide that insurance if we’ll take all the regulations off of it and let it meet the needs and desires of its customers.
STOSSEL: And the regulations now require insurance to cover things I don’t want – alcohol treatment, acupuncture, all kinds of things. And I can’t buy it from out of state.
MACKEY: You can’t. Imagine if regulations required you to buy certain kinds of food when you came into the store: You must buy that food – you don’t want it, maybe you’re a vegetarian – but the government decided you need to purchase a certain percentage of meat whether you want it or not, so that’s analogous, I think.
MACKEY: Fifty years ago, our country spent 16 percent of our disposable income on food. Today we spend only about eight percent. So the cost of food has gone down steadily for the last 50 years, while the cost of health care in the last 50 years has gone from four percent of GDP to 17 percent of GDP. So food’s getting cheaper, due to the market system. Health care is getting more expensive, due to the absence of market freedoms. [AUDIENCE MEMBERS HECKLE] The current system is not a market-based system. The government controls it and regulates it and does not allow markets to work, and that’s what’s wrong with it, and that’s what needs to be reformed.
MACKEY: Right now, health insurance is regulated by the states. They’re not allowed to compete across state lines. And so special interest lobbyists add more and more benefits that have to be covered, and that raises the cost of the health insurance for people making the premiums higher and more expensive. It doesn’t allow people to get the exact health insurance that will best suit their own personal needs.
STOSSEL: And the lawyers say, "Oh, tort costs are less than two percent of health care costs," but that doesn’t include all the defensive medicine, all the tests done that don’t need to be done.
STOSSEL: And if we did this, this would make a big difference?
MACKEY: I think it would make a huge difference. Also, if we allowed, if we repealed the McCarran-Ferguson Act, which was implemented in 1945 which prevents health insurance companies from competing against state lines. It’s the only part of business that I know that doesn’t compete across state lines that really limits competition. Competition is what we need. We need competition in order to drive down prices. Every other business has competition. Why shouldn’t health insurance have competition? It largely doesn’t.
STOSSEL: Russell Mokhiber says 60 people die a day because they don’t have health insurance.
RUSSELL MOKHIBER, SINGLE PAYER ACTION: It’s 120 now, John. It’s 45,000 Americans every year die from lack of health insurance, so we’re not saying people aren’t going to die, we’re saying in this country, 45,000 Americans are dying from lack of health insurance. You go over the border, zero Canadians die from lack of health insurance. Why? Because when they’re born, they have a health insurance card that gets them free access to any doctor at any hospital in the country, so zero Canadians die from lack of health insurance. They die from other things, but not from lack of health insurance.
MACKEY: They oftentimes die from a lack of health care as they wait for services that are rationed by governmental bureaucrats.
MOKHIBER: Very few Canadians would come here and exchange places with us. I have a friend in West Virginia who-
MACKEY: Many Canadians come here every year to get their health care because they can’t get it in Canada. I don’t know many Americans that go to Canada to get health care.
MOKHIBER: John, I would ask you to pick up a phone and call any Canadian and ask them if they would exchange their system for our system.
STOSSEL: We’ll never solve that, Russell, but state your main point. In your ideal world, government would just manage it? The way it’s done in Canada or England?
MOKHIBER: We believe in the death penalty for the health insurance industry. Right now, we have a corporate bureaucracy telling us where and when we can get health care. I went to Johns Hopkins. I got a bill because they told me that the hospital was-
STOSSEL: Tell me your ideal world. What should we have?
MOKHIBER: The ideal world is, if you’re a citizen of this country, you get a health insurance card, and you get free choice of doctor and hospital. We pay for that through the tax system just like we pay for public parks and the public highways and public education. We pay for it through the tax system. Everyone would be insured-
STOSSEL: So public education and public parks work well?
MOKHIBER: John, would you get rid of Medicare?
STOSSEL: Medicare is $36 trillion in the hole. It’s getting rid of itself.
MOKHIBER: Would you get rid of it?
STOSSEL: Absolutely, it’s a ponzi scheme.
MOKHIBER: I know, you would get rid of Medicare, and this is the point. This point of view, this is why people are upset with John Mackey and Whole Foods. He’s taken a hardline libertarian point of view.
MOKHIBER: John Mackey, would you get rid of national parks?
MACKEY: Would I get rid of national parks?
MOKHIBER: Yes, would you?
STOSSEL: You’re comparing apples and oranges.
MOKHIBER: No, it’s not apples and oranges. You said this is socialism. That’s the public, national parks are a public plan.
MACKEY: I’m not advocating that government cease to exist. I want government to be into its proper sphere. This isn’t the proper sphere of government, in my opinion.
STOSSEL: Russell, you brought up national parks. It’s a good example. And maybe government should run national parks and the military. But I’ve covered national parks. They’re badly run. I covered a national park in Pennsylvania where they spent almost a million dollars to build an outhouse. It didn’t even flush. This cost almost a million dollars. They imported the stone from out of state. They manage things so badly, I can’t imagine what health care will be like once government runs it.
MOKHIBER: John, you guys, both of you guys are of the Grover Norquist school of libertarianism. That is, you want to shrink government to a size, drag it into the bathroom, and flush it down the bathtub. That’s the Grover Norquist view. That’s what you guys want to do. And what’s the result? The result of innocent-
STOSSEL: I don’t know about you, but I’m a proud member of the Grover Norquist school of limited government.
MACKEY: I like Grover, too.
STOSSEL: Okay, the boss of Whole Foods writes a health care op-ed based on the health plan his company runs. People get so mad they boycott Whole Foods. So what is Whole Foods’ plan? And how is it different from what government wants to do?
MACKEY: We provide high-deductible, catastrophic health insurance for all of our full-time team members, which is about 89 percent of our team member base that works 30 hours or more.
STOSSEL: "High-deductible" meaning $4,000, $5,000?
MACKEY: We round up to about $2,500. It’s actually closer to $2,300, but we said $2,500, and so they have to cover their first $2,500, and then the company picks up the cost above that. We also, though, have created personal wellness accounts where we deposit up to $1,800 into a team member’s account so they can pay for their deductibles that way. Any money they don’t use – and in any one year, 90 percent of our team members make no health care claims in a year – so money they don’t use rolls over to the next year so they can use it when they may need it. So, over time, more and more dollars builds up in their accounts so their deductible is paid for as well as any other types of wellness programs that may not be covered such as acupuncture or chiropractor.
STOSSEL: So they can use it for anything, any silly thing like acupuncture if they want to?
MACKEY: With the money we now spend on Medicaid in our country, if you took the same amount of money, you could buy – for all the poor people who can’t afford insurance – a high-deductible plan and put $3,000 in a health savings account that they could spend on that deductible. And any money they didn’t spend, more money would be added to it the next year. We could empower the poor people to take responsibility for their own lives and health. We don’t need the government to take this thing over.
UNIDENTIFIED WOMAN IN AUDIENCE: So I’m an internist, a primary care doctor here in New York, and health savings accounts really work for only a certain type of person, but people who are sick, who are poor, don’t really get the benefits of health savings accounts. So a person, for example, I have a patient who has lymphoma. She’s 40 years old with lymphoma, and she will exhaust her health savings account because she has a lot of medical bills. ...
STOSSEL: But doesn’t she have a high-deductible policy that covers the big bills?
UNIDENTIFIED WOMAN: It covers the big bills, but it doesn’t cover the $2,000, the $3,000, the $4,000 that annually she would have to pay for her medical expenses.
STOSSEL: Let’s let them take a shot at an answer. John Mackey?
MACKEY: Well, if we had a system where we had health savings accounts and people had them all their lives when they were young and healthiest, they would be compiling surpluses that would cover them when they got older and their health spending went up, so you have to think about it through the whole life cycle.
STOSSEL: All right, but the young person who gets sick is toast?
MACKEY: No, but the point is if someone is sick, health insurance picks up the great majority of it. Like at Whole Foods, if someone spent $1,000,000 in a year on health care, they might have to pick up $3,000 themselves while the company picked up $997,000 of it, but they’d have to pay a little bit. And I think that’s fair. I think people should be responsible for making some of the payments on their own health even in a catastrophic situation.
GRACE-MARIE TURNER, GALEN INSTITUTE: Well, first of all, health savings accounts should be one of the choices that people have, not the only choice that people get. And people can accrue over time, but they save money that year for the health care that they get because they save on the premiums. Instead of spending $6,000 or $7,000 or $8,000 on a premium for a comprehensive plan that pretends to cover everything, that premium may only cost them $4,000. So they’ve got the money. You’ve got to look at the totality of their total out of pocket costs, not just what they’re spending with the deductible.
STOSSEL: Are you buying this?
UNIDENTIFIED WOMAN: For certain populations, if you have enough money and you can afford to spend $3,000, $4,000 of a high deductible-
STOSSEL: Well, he’s giving them the $3,000 in their health savings accounts.
UNIDENTIFIED WOMAN: And what if you get sick?
TURNER: The whole point of insurance is to cover people when they get sick. And the whole point of insurance is that we can’t know when that’s going to happen. We all need insurance. If we were to have subsidies, and someone’s lower income, they can use that subsidy to buy the kind of insurance they need. They can put savings into that account if they buy a lower-premium policy, but let them make that choice. But it is important that everybody have insurance, but that doesn’t mean that it needs to be government insurance.
STOSSEL: Finally, I’m going to keep saying what people don’t want to hear: If we want lower prices without losing quality, we have to pay more of our health care bills ourselves because the only thing that really lowers costs and raises quality is the free market. Insurance interferes with that. The market works when you control your money. We all know what happens with everything else in our economy when customers shop around. People trying to make a profit cater to us. They keep inventing things. We get better stuff for less money. Better cell phones, faster package delivery, better everything. What makes it work is that the merchant knows that you can take your business elsewhere. And what gets you to shop around is the fact that you – not the government or some insurance company – pay.
UNIDENTIFIED MALE DOCTOR: Who the heck is going to shop for price when somebody else is paying the bill?
STOSSEL: He’s a laser eye surgeon. He works in the tiny area of health care where patients still do pay the bills. And what’s happened? The technology has improved dramatically while the cost has stayed the same or gone down. Why? Because most insurance plans don’t cover lasik, people shop around. The surgeons work hard to please their customers by keeping prices low.
MALE DOCTOR: Because people are paying their money, they’re very sensitive to their experience. Does the doctor make me wait? Does he answer all my questions? Do I get a great result? If there’s a problem, I’m out of there.
STOSSEL: Nobody had to plan it or pass a law to force it. It just works. That’s the free market. So I don’t get the arrogance of a handful of people, most of whom have never even run a small business, thinking that they are smarter than the market, that they can reinvent our entire health care system. These monster bills that Congress now authors don’t address the most basic rule about incentives: We don’t care what it costs if we don’t pay the bill. These bills force more insurance, more third-party payers, more rules from Washington. These kill the benefits of the tiny amount of free market that’s still left in American health care. If we want cheaper and better, we need more Americans to have plans like Whole Foods – high-deductible policies and health savings accounts. Only when health consumers spend their own money will we get the quality care we want. I’m John Stossel. Thanks for watching. Hope to see you next week.