The Man Who Said No to Wal-Mart

Charles Fishman, senior writer for Fast Company magazine has recently published a book entitled The Man Who Said No To Wal-mart. It's an excellent book (Yes, I've read it) that talks about the intersection of making good stuff, the commodization of products, and the changing world that we work in; not exactly high tech, but tech nonetheless.

Every year, thousands of executives venture to Bentonville, Arkansas, hoping to get their products onto the shelves of the world's biggest retailer. But Jim Wier wanted Wal-Mart to stop selling his Snapper mowers.What struck Jim Wier first, as he entered the Wal-Mart vice president's office, was the seating area for visitors. "It was just some lawn chairs that some other peddler had left behind as samples." The vice president's office was furnished with a folding lawn chair and a chaise lounge.

And so Wier, the CEO of lawn-equipment maker Simplicity, dressed in a suit, took a seat on the chaise lounge. "I sat forward, of course, with my legs off to the side. If you've ever sat in a lawn chair, well, they are lower than regular chairs. And I was on the chaise. It was a bit intimidating. It was uncomfortable, and it was going to be an uncomfortable meeting."

It was a Wal-Mart moment that couldn't be scripted, or perhaps even imagined. A vice president responsible for billions of dollars' worth of business in the largest company in history has his visitors sit in mismatched, cast-off lawn chairs that Wal-Mart quite likely never had to pay for.

The vice president had a bigger surprise for Wier, though. Wal-Mart not only wanted to keep selling his lawn mowers, it wanted to sell lots more of them. Wal-Mart wanted to sell mowers nose-to-nose against Home Depot and Lowe's.

"Usually," says Wier, "I don't perspire easily." But perched on the edge of his chaise, "I felt my arms getting drippy."

Wier took a breath and said, "Let me tell you why it doesn't work."

Tens of thousands of executives make the pilgrimage to northwest Arkansas every year to woo Wal-Mart, marshaling whatever arguments, data, samples, and pure persuasive power they have in the hope of an order for their products, or an increase in their current order. Almost no matter what you're selling, the gravitational force of Wal-Mart's 3,811 U.S. "doorways" is irresistible. Very few people fly into Northwest Arkansas Regional Airport thinking about telling Wal-Mart no, or no more.

In 2002, Jim Wier's company, Simplicity, was buying Snapper, a complementary company with a 50-year heritage of making high-quality residential and commercial lawn equipment. Wier had studied his new acquisition enough to conclude that continuing to sell Snapper mowers through Wal-Mart stores was, as he put it, "incompatible with our strategy. And I felt I owed them a visit to tell them why we weren't going to continue to sell to them."

Selling Snapper lawn mowers at Wal-Mart wasn't just incompatible with Snapper's future -- Wier thought it was hazardous to Snapper's health. Snapper is known in the outdoor-equipment business not for huge volume but for quality, reliability, durability. A well-maintained Snapper lawn mower will last decades; many customers buy the mowers as adults because their fathers used them when they were kids. But Snapper lawn mowers are not cheap, any more than a Viking range is cheap. The value isn't in the price, it's in the performance and the longevity.

You can buy a lawn mower at Wal-Mart for $99.96, and depending on the size and location of the store, there are slightly better models for every additional $20 bill you're willing to put down -- priced at $122, $138, $154, $163, and $188. That's six models of lawn mowers below $200. Mind you, in some Wal-Marts you literally cannot see what you are buying; there are no display models, just lawn mowers in huge cardboard boxes.

The least expensive Snapper lawn mower -- a 19-inch push mower with a 5.5-horsepower engine -- sells for $349.99 at full list price. Even finding it discounted to $299, you can buy two or three lawn mowers at Wal-Mart for the cost of a single Snapper.

If you know nothing about maintaining a mower, Wal-Mart has helped make that ignorance irrelevant: At even $138, the lawn mowers at Wal-Mart are cheap enough to be disposable. Use one for a season, and if you can't start it the next spring (Wal-Mart won't help you out with that), put it at the curb and buy another one. That kind of pricing changes not just the economics at the low end of the lawn-mower market, it changes expectations of customers throughout the market. Why would you buy a walk-behind mower from Snapper that costs $519? What could it possibly have to justify spending $300 or $400 more?

That's the question that motivated Jim Wier to stop doing business with Wal-Mart. Wier is too judicious to describe it this way, but he looked into a future of supplying lawn mowers and snow blowers to Wal-Mart and saw a whirlpool of lower prices, collapsing profitability, offshore manufacturing, and the gradual but irresistible corrosion of the very qualities for which Snapper was known. Jim Wier looked into the future and saw a death spiral.

Wier had two things going for him: First, he had another way to get his lawn mowers to customers -- a well-established network of independent lawn-equipment dealers that accounted for 80% of Snapper's sales. And Wier had the courage, the foresight, to take an unblinking view of where his Wal-Mart business was heading -- not in year 3, or year 4, but year 10.

Wier traveled to Bentonville with a firm grasp of the values of Snapper, the dynamics of the lawn-mower business, the needs of the dealers, the needs of the Snapper customer, and the needs of the Wal-Mart customer. He was not dazzled by the tens of millions of dollars' worth of lawn mowers Wal-Mart was already selling for Snapper; he was not deluded about his ability to beat Wal-Mart at its own game, to somehow resist the price pressure. He was not imagining that he could take the sales now and figure out the profits later.

Jim Wier believed that Snapper's health -- indeed, its very long-term survival -- required that it not do business with Wal-Mart.



Every Snapper lawn mower sold anywhere in the world comes from a factory in McDonough, Georgia, a small town 30 minutes southeast of Atlanta. Coils of raw steel arrive on flatbed trucks every day at the old, nondescript building; brand-new fire-engine-red lawn mowers leave every day, loaded in 18-wheelers. The facility looks undistinguished, but it is energetically trying to defy the conventional wisdom about manufacturing in the global economy.

The Snapper factory has had an invigorating decade. Ten years ago, it produced about 40 models of mowers, leaf blowers, and snow blowers; now it makes 145. Today, robots do the welding, lasers cut parts, and computers control the steel-stamping presses. Productivity is three times what it was 10 years ago, and the number of people working here, 650, is half what it was.

Indeed, the productivity of every factory worker is measured "every hour, every day, every month, every year," says Snapper president Shane Sumners, who walks the 10.5-acre factory floor with comfort and familiarity. "And everybody's performance is posted, publicly, every day for everyone to see." It's a lot like Wal-Mart -- which measures the number of items every checkout clerk scans every hour. Some of Snapper's dramatic productivity improvements, in fact, seem to come almost directly from the Wal-Mart playbook. These days, the Snapper factory operates in Wal-Mart time. It must, because it operates in Wal-Mart's ecosystem.

Ten years ago, at about the time Sumners came on board, Snapper had 52 regional distributors. It uses no distributors now -- the company runs four regional warehouses of its own and sells directly to 10,000 independent dealerships. Ten years ago, in part because of the complexity of the middleman distribution system, Snapper carried a huge quantity of inventory. It paid to manufacture and ship thousands of lawn mowers -- worth tens of millions of dollars -- without quite knowing when they would be sold. Now planners come up with an ideal level of inventory for every model, for every region of the country, based on things like historic demand and the weather. The goal is to make sure every customer can get the mower he wants -- while making absolutely the smallest number of lawn mowers.

Production at the Snapper factory is rescheduled every week, according to the pace at which mowers sell. A computer juggles work assignments and balances the various parts of the assembly line. The main manufacturing line for Snapper's entry-level walk-behind mowers -- with 28 people -- was recently charged with producing 265 lawn mowers in an eight-hour shift. The group hit the mark exactly. That's a new lawn mower, from loose parts to sealed box, every 109 seconds. "It's all a matter of seconds," says Sumners.

It's not hard to make a cheap lawn mower. A cheap lawn mower feels flimsy, sounds louder than it has to, and even when new, requires a mysterious, frustrating combination of choke, priming, and pulling to start. The cutting deck of a cheap mower is stamped from thin sheet metal. Making a high-quality lawn mower -- even in 109 seconds -- requires attention to detail and constant improvement, which seems surprising for a machine that doesn't evolve that much.

All Snapper machines, from the simplest walk-behind to the most elaborate riding mower, are painted one color: what Shane Sumners calls "Snapper red." In the factory, the finished chassis of riding mowers coast along slowly, dangling from an overhead conveyor as they approach a 20-foot-long pool of red paint. The conveyor track dips low, and the mowers glide down into the pool and completely disappear beneath the surface, then rise back up, gleaming red, before heading for a pass through a curing oven.

It's not quite as simple as dip and bake, however. Each mower is electrically grounded as it hangs from the overhead conveyor, and a slight positive electrical charge runs through the 16,000-gallon trench of paint. "So the paint is attracted to the metal and builds up on the parts and sticks very effectively and evenly," says Sumners. The process is monitored every hour -- from the speed of the conveyor and the temperature of the ovens to the pH of the paint -- along 115 parameters. "If you control the process," says Sumners, "you will get a good paint job."

Snapper technicians start every riding mower before it leaves the McDonough plant. At the "hot start" station, a man wearing ear protectors squirts gas into the fuel tank and oil into the crankcase, pulls the starter cord, and brings the machine to life. He runs through all the gears, checks speed, engine performance, the mounting of the seat. The engine is given just enough fuel for the "run in." If the mower passes all the tests, the man sucks the oil back out and sends the mower on to be boxed.

As Sumners watches, one of the riding mowers takes two pulls to start, then comes to life with a rough growl. In the blink of an eye, the technician shuts it down. "Did you hear how that sounded?" asks Sumners. "It's not right. That's a bad one." The mower is shunted off to be inspected and properly tuned if possible. "If we didn't," says Sumners, "that mower would have gone to a customer."

The Snapper factory started making riding mowers in 1951. It is unadorned and old, but it is old in the sense of solidity and use. There is nothing tired about it. More significant, there is nothing sentimental about it. This factory isn't here out of some misplaced sense of economic loyalty to U.S. manufacturing. It's here because it makes Snapper-quality lawn mowers at a competitive price.

Snapper's factory hums with discipline and focus and urgency. Even with no products at Wal-Mart, a company like Snapper has to compete psychologically, has to keep the price gap between the big-box lawn mowers and its lawn mowers rational. If it did not, its potential slice of the market would get smaller and smaller.

Sumners has to spur his factory on with the same tirelessness as if it were supplying Wal-Mart -- the efficiency of every factory worker measured every hour of every day -- because Wal-Mart sets the pace, even if you're not working for them.



Jim Wier is 62 years old, with a youthful twinkle, despite a thatch of white hair. He is a solidly built man who dresses casually. He is comfortable with himself. Wier, who until the summer of 2005 ran a group of lawn-equipment businesses that approach half a billion dollars a year in sales, is confident, direct, and unprepossessing. He mows his own lawn. "I don't want to hire a service," he says. "I still love to cut my grass."

Wier is much like Snapper's customers. "When we do surveys of our customers, they like to cut their grass. And they want a good piece of equipment to do it. We're designed to give you the best quality of cut. We have full rollers on the riding mowers, to give that nice striped look on your grass, like on the baseball fields. It makes you feel proud of the home you own. Proud of your lawn. The neighbors walk by, they say, 'Look how good the yard looks.' "

Wier doesn't really think that a $99 lawn mower from Wal-Mart and Snapper's lawn mowers are the same product any more than a cup of 50-cent vending-machine coffee is the same as a Starbucks nonfat venti latte. "We're not obsessed with volume," says Wier. "We're obsessed with having differentiated, high-end, quality products." Wier wants them sold -- he thinks they must be sold -- at a store where the staff is eager to explain the virtues of various models, where they understand the equipment, can teach customers how to use a mower, can service it when something goes wrong. Wier wants customers who want that kind of help -- customers who are unlikely to be happy buying a lawn mower at Wal-Mart, and who might connect a bum experience doing so not with Wal-Mart but with Snapper.

And so in October 2002, with a colleague, Wier kept an appointment with a merchandise vice president for Wal-Mart's outdoor-product category.

"The whole visit to Wal-Mart headquarters is a great experience," says Wier. It really is a pilgrimage to the center of the retail universe. "It's so crowded, you have to drive around, waiting for a parking space, you have to follow someone who is leaving, walking back to their car, and get their spot. Then you go inside this building, you register for your appointment, they give you a badge, and then you wait in the pews with the rest of the peddlers, the guy with the bras draped over his shoulder."

Normally, meetings between Wal-Mart buyers and people from supplier companies take place in the legendary meeting rooms just off the vendor lobby. These cubicles are simple to the point of barren -- a table and four chairs, and 30 minutes to make your case. "It's a little like going to see the principal, really," says Wier.

In this case, Wier says, both he and the Wal-Mart managers "had a feeling that this would be an important meeting." So Wier and his colleague were scheduled to visit the vice president in his office. Sitting on lawn chairs.

"The meeting started with the vice president of the category saying how it was clear that Lowe's was going to build their outdoor power-equipment business with the Cub Cadet brand, and how Home Depot was going to build theirs with John Deere," says Wier. "Wal-Mart wanted to build their outdoor power-equipment business around the Snapper brand. Were we prepared to go large?"

Talk about coming to the table with different agendas. Wier was in Bentonville to pull his mowers from Wal-Mart's stores. The vice president was offering a greater temptation: Let's join hands and go head-to-head against the home-improvement superstores.

Which is when Wier said no.

"As I look at the three years Snapper has been with you," he told the vice president, "every year the price has come down. Every year the content of the product has gone up. We're at a position where, first, it's still priced where it doesn't meet the needs of your clientele. For Wal-Mart, it's still too high-priced. I think you'd agree with that.

"Now, at the price I'm selling to you today, I'm not making any money on it. And if we do what you want next year, I'll lose money. I could do that and not go out of business. But we have this independent-dealer channel. And 80% of our business is over here with them. And I can't put them at a competitive disadvantage. If I do that, I lose everything. So this just isn't a compatible fit."

The Wal-Mart vice president responded with strategy and argument. Snapper is the sort of high-quality nameplate, like Levi Strauss, that Wal-Mart hopes can ultimately make it more Target-like. He suggested that Snapper find a lower-cost contract manufacturer. He suggested producing a separate, lesser-quality line with the Snapper nameplate just for Wal-Mart. Just like Levi did.

"My response was, we would take a look at that," says Wier. "The reason I gave that response was, it was a legitimate question. In my own mind, I knew where I'd go with that" -- no thanks -- "but at that kind of meeting you at least have to be willing to say, I'll investigate." And that was it. "The tone at the end was, We're not going forward as a supplier."

No lightning bolt struck. Except that Snapper instantly gave up almost 20% of its business. "But when we told the dealers that they would no longer find Snapper in Wal-Mart, they were very pleased with that decision. And I think we got most of that business back by winning the hearts of the dealers."

Snapper was successfully integrated into Simplicity, which in 2004 was itself bought by Briggs & Stratton, the company that makes many of the engines in Snapper and Simplicity mowers. Simplicity and Snapper operate as independent divisions, and Wier remained CEO of both until last summer, when he resigned to join the private equity firm Kohlberg & Co. In McDonough, business is strong. Shane Sumners plans to add a second assembly line for both walk-behind and riding mowers.

One serious hazard to Wier's strategy is that independent lawn-equipment dealers face all the same pressures that have killed, for instance, many independent hardware stores and toy stores. "That is a legitimate question and a legitimate concern," says Wier. "I think we have a part in that outcome. Can Snapper, as a major supplier, continue to supply [the independents] with great product, and a product different than you can buy at Wal-Mart?"

Wier says, "I'm probably pro-Wal-Mart. I'm certainly not anti-Wal-Mart. I believe Wal-Mart has done a great service to the country in many ways. They offer reasonably good product at very good prices, and they've streamlined the entire distribution system. And it may be that along the way, they've driven some people out of business who shouldn't have been driven out of business." Wier wasn't going to let that happen to Snapper.

Wier had determined to lead Snapper to focus on quality, and through quality, on cachet. Not every car is a Honda Accord or a Toyota Camry; there is more than enough business to support Audi and BMW and Lexus. And so it is with lawn mowers, Wier hoped. Still, perhaps the most remarkable thing is that the Wal-Mart effect is so pervasive that it sets the metabolism even of companies that purposefully do no business with Wal-Mart.

And the power and allure of Wal-Mart is such that even Jim Wier, the man who said no to Wal-Mart, a man who knows all the reasons why that was the right decision, has slivers of doubt.

"I could go to my grave, and my tombstone could say, 'Here lies the dumbest CEO ever to live. He chose not to sell to Wal-Mart.'"

Charles Fishman is a Fast Company senior writer and the author of, "The Wal-Mart Effect: How the World's Most Powerful Company Really Works -- And How It's Transforming the American Economy." See www.walmarteffectbook.com for more information.

From THE WAL-MART EFFECT by Charles Fishman. Reprinted by arrangement with The Penguin Press, a member of Penguin Group (USA), Inc. Copyright (c) Charles Fishman, 2006. Charles is a senior writer for Fast Company magazine.

Re:And???

"...has recently published a book entitled The Man Who Said No To Wal-mart."

Re:And???

Apparently you've never seen a slashvertisement before.

Re:And???

because you know, slashdot users are the coveted "basement recluse" demographic which lawn care vendors have been trying so hard to reach...

Obvious.

Walmart sells cheap crap - if your company does not sell cheap crap, you can't sell at walmart.

Oh - and the quote: same product any more than a cup of 50-cent vending-machine coffee is the same as a Starbucks nonfat venti latte.

Dreadful analogy - the 50-cent vending machine coffee is crap, the $3.50 starbucks latte is crap.

Re:Obvious.

Yeah,and that PS2 cost $149.99, the same as any other store that sells PS2s. The only difference is you had that great Walmart shopping experience.

Re:Obvious.

And if you RTFA, companies can (and do) give lesser quality products under the same label to Wal-Mart.

IIRC, the same is true of some of the stuff at Best Buy as well.

Re:Obvious.

And if you RTFA, companies can (and do) give lesser quality products under the same label to Wal-Mart. IIRC, the same is true of some of the stuff at Best Buy as well.

WHAT!!?? You get what you pay for? I'm shocked SHOCKED I tell you!

Re:Obvious.

The other side of the coin is that the low prices at Wal Mart are subsidized by the rest of us.

For example, they don't provide proper health insurance to their employees which forces many of them to get government medical insurance assistance, otherwise known as Medicaid.

Wal Mart also drives competitors out of business, reducing the diversity of choices in a community. Some places if you want to work, you work at Wal Mart. You want to shop? Wal Mart is practically your only choice.

Wal Mart drives prices lower and lower, forcing suppliers to move their production offshore. This means that we're losing manufacturing capability in this country, and we're losing the manufacturing jobs.

Wal Mart hurts our port security too. They are currently pushing hard against adopting a policy of scanning every single cargo container entering our ports, because that would screw up their delivery system. Basically they are ready to trade off some of our safety for the sake of their profits.

Avoid Wal Mart whenever you can.

Re:Obvious.

Mom and pop stores don't suck, they just have to sell at prices higher than walmart. They don't have 3000 stores or the push-around power that walmart has due to its market share.

What I do get at the ma and pa store is a friendly face and great service. They usually are very knowledgable about the product they sell, and many times are willing to go the extra length if I have any problems at all with my purchase.

The last time I went into a walmart (with a friend, I never buy there and avoid it like the plague), the place was dirty, shelves were disorganized, and no one was willing to help other than to point down an isle. Price isn't always more important, although I believe that through advertising the american public is being brainwashed into thinking it is.

Beside, on many items, the reduced price at walmart isn't all that much lower than at other retailers. And as previous posts and TFA points out, a lot of it is brand-named junk anyway.

Re:Obvious.

I'm sure I'll get flamed for this, but...depending on the setting, Mom and Pop stores aren't always a better choice for the community than a Walmart.

Where I grew up (very small town, extremely isolated in the middle of nowhere), the local stores could gouge you stupid because it just wasn't worth a 90 minute drive to the nearest other town for better prices on groceries, or a five hour drive for better prices on appliances to the nearest "big city". Granted being in the middle of nowhere meant that the local stores had to contend with high supplier costs, but somehow $8 for 2 litres of Pepsi still seems excessive. The owners were the first to cheerfully admit that they were getting filthy rich off what amounted to a monopoly in this one-horse town.

Then along came Walmart in the next town over. Suddenly the local outfits found themselves having to be competitive. It was still a 90 minute drive so they could charge a slight premium for convenience, but they couldn't get away with the markups they used to enjoy. Today the local grocery store still enjoys a monopoly of sorts in the town, and was able to open a brand new megastore. They just can't charge whatever they feel like anymore.

I'm not saying Walmart's a saint, I'm well aware of the fact that they aren't. I'm just suggesting that it's not always the bad guy, nor is the local non-chain always the good guy. Ok, let the outraged flames commence. :)

Re:Obvious.

Also, growing up in a small town I saw a lot of situations where "small-town charm" also meant small-town bigotry and small-town narrow mindedness. Nice if you're able to make friends with the owner, but if your nationality or skin color is different, you may wish you had a big box around where you could at least just be ignored like everyone else in the store.

Re:Obvious.

And comments like this are what is wrong with our country. Corporations and their shareholders would not be making any money at all if not for their employees. Human resourcess should be a company's most important resource. Health care for employees means that the company cares about the welfare of their employees.

Also, I hear that productivity goes waaaay down when employees are sick ;)

Re:Obvious.

the linkage of health insurance to employment is one of the great wrongs in US history. why SHOULD an employer be expected to subsidize health care? I would prefer to see employers pay wages that allowed employees to make their own health care decisions, rather than shop for the lowest cost health care plan they can get away with and channel their employees into substandard, assembly line managed care plans.

if my employer would just give me as salary the money they pay for my health insurance I could go out and get a more appropriate level of coverage for my family. since they don't do that, the only economically sound decision I can make is to use what they provide.

Re:Obvious.

By that logic, it would be cheaper to group the entire country into 1 large group, and have everybody in the country under the same insurance plan. Then, to make it even cheaper, you remove the insurance company, and have a government run insurance plan that takes no profit.

Re:Obvious.

Actually they sort of did. During the great depression and into World War 2 they put a cap on salaries to promote full employment and later held it to allow the government to bid for talent. So those sneaky companies figured out that benefits were not covered in the compensation cap and offered benefits to attract better employees. The whole policy is misguided and flows from an earlier monkeying with the free market. Somehow automobile insurance companies are able to spread risk without selling to an entire company, city, or group. Why fundamentally is health insurance so different?

Classic centralization argument.

Actually, what you're saying is, in fact, probably true. If your goal was to insure everyone in the country at the lowest rate possible, then the most efficient way to do it would be to only have one giant insurance company, and one risk pool.

However this ignores several things. First, and what I think is most important, is by eliminating all competition in the insurance industry, you would remove any impetus to become more efficient. Such a company would probably become hideously bloated and turn into a giant cash sink, employ many times the number of people it actually needed to operate, and would be beholden to basically nobody. Since there wouldn't be any alternatives for customers to switch to, their level of service could also deteriorate to rock-bottom.

The argument you're making is the classic argument for centralization in an economy. "Hey, everyone wants to have a car -- why don't we just make one really big car factory? It'll be really efficient." True, but not everyone wants the same car, and even if they did, eliminating the competition in the marketplace to build better cars would probably over time eliminate the advantage of centralization.

Re:Obvious.

Imagine if hospitals were more like the Department of Motor Vehicles...

You've never been in an HMO then, I expect.

Re:Classic centralization argument.

What you state is absolutely correct for any normal commodity -- building one car factory or stereo component store would be a recipe for disaster. No incentive for development, efficiency or improvement.

Fortunately, health care has no relationship whatsoever to other commercial industries. Customers don't shop for health care. The amount of specialized knowledge you'd need to compare the providers of every kind of care is beyond the reach of any single human being. If you wait until you need a particular care, you usually need it immediately, which precludes comparison shopping. You can always walk away from a bad car salesman, but if you're bleeding to death you don't have much negotiating power if the hospital tells you it is $3,000 for admittance.

Health care needs no advertising -- Insurance companies are't spending billions of dollars on commercials so that people know there is such a thing available and they should buy some. All they're doing is taking customers from each other and money away from actual care. In the computer business, that would be fine, since a smaller transistor size on the manufacturing side or broader market on the customer side can make up for the marketing expenses, but I can assure you that there's nobody having heart attacks with health care advertising that wouldn't have had one already (or vice-versa). State Farm isn't developing any top-secret surgical procedures that Allstate won't have access to.

Incentive to improve is omnipresent since Death is a far more efficient competitor than Microsoft or State Farm. Death has no overhead, he's penetrated every market segment and is very efficient at finding new opportunities for development. Death works 24/7 -- even on holidays! No matter how good insurance and health care are, there will always be real and constant pressure on them to improve.

The fundamental issue is that we're not willing to let people simply die on the street. If someone walks into an emergency room, we, as a society, have legally required that hospital to provide stabilizing care. They cannot tell the guy to go die on the street if his credit card is declined, which means that ultimately, we the taxpayers are going to pay for such emergency medical care regardless of how the cmmercial market should or shouldn't work in an ideal world.

Finally, the major difference between medical care and every other industry is that the cost of most goods doesn't increase unpredictably (but preventably!) by thousands of percent in a matter of moments. If you were shopping for a CD player and the price was $50 -- wait, no it's $50,000! -- you'd be pretty shocked and kick yourself for not having bought it last week when it was $50.

But that's exactly what we're dealing with -- a $50 annual checkup would allow us to prevent many of the $50,000 emergency visits we already pay for. I can't imagine it makes more economic sense to write out $50,000 checks every time someone walks through the ER door, but refuse to cover the $50 checkup that would have not only increased their health in the first place, but prevented them from losing time at work and contributing to the economy.

Yes, like Canada and half the rest of the world

Employers should have no connection with the health system and neither should individuals. The best system, one that is practised in Canada, Cuba, almost all of Europe and tons of other countries is a government supplied, universal health care. Everybody gets good service and everybody pays equally according to their means. It's about basic human dignity and support of your fellow man. As soon as money gets involved it's survival of the richest.

Re:Delaying death is not the kind of incentive nee

What you need is incentives to keep costs under control.

Medicare keeps medical costs under control better than any private insurance company. The government uses the exact same mechanism as the private carriers -- they negotiate specific rates they will reimbuse for a procedure. The only difference is that the government doesn't also need marketing expenses and profit, which takes another 20-50% out of the actual medical care provided by private insurers.

Get a job in a hospital in the US sometime, you'll see that medicare and private insurance operate almost exactly the same, the only difference being that medicare doesn't waste as much money on "other stuff". People complain about government bureaucracy, but Medicare can be a downright easy process compared to most private insurers if you're doing anything more complicated than getting a wart removed.

Otherwise you will keep the costs under control by rationing care like in Canada and England. That's just the historic record.

Health care is always rationed, and it is rationed more by private companies than it is by US government health insurance. Insurers do everything possible to keep you from ever actually getting expensive care. Dealing with Medicare or the Veteran's Administration isn't always convenient, but there is no deliberate hurdle-jumping placed in your way as there is with private care. There are no claims processors looking for excuses to deny coverage so that you're stuck with half a needed treatment and a hundred grand of debt if you want to continue.

People do shop for health care, you're just not in the right age group to notice yet. What do you think old folks talk about (their kids, grandkids and their health/doctors).

I'm not in the right age group as a buyer, but I did work in public/private healthcare for the last decade so I have a more than passing acquantaince with the process. Old folks talk about care, but only the wealthy ones can actually afford to change providers. If you've got a solid retirement savings that covers long-term care, that's great, but that covers maybe 5% of the health care customers in the USA, and they aren't the ones anybody is concerned about.

Many insured people don't get their checkups on time.

Denial and other human foibles are certainly factors, but when it comes to private insurance you also have to realize that people are often genuinely scared of going to the doctor if they think something is wrong. If they find out they are unhealthy, they could lose their job or insurance, because now they are a "risk". God forbid you discover you have diabetes or another chronic but livable condition -- your premiums will become crazy (or you will be outright uninsurable) if you pay for your own coverage, or you will become a huge liability to your employer if you don't.

We've put people in a lose-lose situation where it is BETTER for them to willfully ignore health problems as long as possible, all because we refuse to accept that it makes no sense to make health insurance a market commodity. Nobody can do without it, everybody needs it, and if you tie it to emplyment, all it does is put people's jobs in jeopardy when they do, inevitably, get sick.

It reminds me of the old joke about democracy -- of course government health care is a horrible, horrible idea. But it is still better than all the alternatives.

In theory, everything you say is right. I support the free market, believe it comes up with the best solutions through competition, and find government sluggishness to be incapable of meeting the changing landscape of needs. Unfortunately when it comes to health insurance, for many reasons theory and reality part ways and the free market has somehow managed to provide worse care at higher cost while not even being able to cover those most in need of the service!

Re:Classic centralization argument.

You really need to take a Valium before logging on, sir.

You didn't shop for health care, you shopped for copays and dental/vision options and PPO choices (which of course can change at any moment, but you have to wait until next years' open enrollment to make any changes on YOUR side of the agreement).

You don't have the slightest clue beyond the very basics what actual health care you have available until you are in a situation where you need it and they tell you a particular procedure isn't covered, or that the hospital went over the limit and by the way here's the bill for the extra (how the heck should you know what the hospital has negotiated with your insurer and be able to verify they didn't go over -- were you supposed to ask the anesthesiologist how mcuh he charges for a breathing tube while he was putting you under?)

When you were in the selction process, did you actually go through and examine the credentials and experience of the potential heart specialist they would send you to if you had a heart attack? Or did you just see that your family doctor was on the list? Do you know which endocrinologist they have approved?

Did you know that if you're in a life-threatening accident and are treated while unconscious, you might get charged tens of thousands of dollars when you wake up because the ambulance took you to the wrong hospital and you didn't go to an approved one after 24 hours? Did you take that into account while "shopping" or did you just look at the phone book of doctors they give you to see that yours was listed and say "fuck, I don't know what any of this is, but paying $20 for my wife's perscription is better than $30, so I'll go with Aetna!"

So you're feeding us a complete line of utter bull, and it isn't necessary for me to read further into that big wordy comment you made.

I'd hate to trouble your initial knee-jerk reaction. have a nice night!

Re:Obvious.

While I agree with the premise that linking health insurance to employment is flawed, the premise that everyone can go out an purchase good health insurance in todays market is sheer lunacy. Obviously your familiy is blessed with relatively good health. Many families are not as blessed.

Insurance companies either simply refuse to write policies for those with serious health conditions or will increase the price of their existing policy till it is out of the financial means of that family. So a family with a member who has diabetes, cancer, luekemia, or other serious health malady is left without.

Healthcare in this country is treated as a for profit business. We have allowed this country healthcare system to place profits ahead of humanity and morality. Granted many of the social programs of other countries have their faults when trying to tend to the needs of their population at large, but at least everyone has an equal opportunity. This is not true in our country. The limited social "healthcare" in this country is more like "sickcare". Poor people wait until they are really sick before seeking treatment.

I will step off the soapbox before I start writing the epic novel on what is wrong with our healthcare system.

-mike

Re:Obvious.

That's an unrealistic viewpoint. The fact is that the shareholders run the company. If the CEO is not exploiting opportunities to the fullest, the board will replace him with someone who will. The board is made up of shareholders - big, faceless mutual funds for example.

What this means in the long run is that a publicly traded company will naturally be drawn to maximizing shareholder profits, just as organisms are drawn to reproduce and survive. To expect otherwise is to go against nature.

If you want a publicly run company to be good, you must force it to be good - either by providing incentives to make it good, or consistently enforced deterrents from being bad. Otherwise, an ethical CEO will be replaced by a profitable one. If Wal-mart should be paying for medical insurance, then make a law stating that unskilled-labour businesses like wal-mart should pay for medical insurance Otherwise they won't.

This is why corporate libertarians bewilder me. Deregulation is basically handing the keys to a drunk driver.

Re:Obvious.

Human resources are a company's most valuable asset in some industries. "Brain-based" businesses, where the whole business is nothing but an office building, some computers and furniture, and a whole bunch of people, are pretty aware that if they're not recruiting and retaining good people, they're one foot in the grave.

However, Wal-Mart really is just using its employees as warm bodies. In fact, not even for that. Really they just do things that haven't been automated yet, at least not in a cost-effective way. It's still cheaper to hire a 19-year-old with a strong back to stock bigscreens on a shelf than it is to build a robot to do the same job.

The reason that the health and welfare of their employees doesn't really matter to Wal-Mart is because there is perceived to be a near-infinite supply of them waiting outside the glass doors, ready to take up the helm if anyone gets too ill or starts demanding a higher salary. And this is quite probably true, especially when you consider that Wal-Mart has shown in the past that its not adverse to hiring illegals.

Your salary, in a properly working economy, will never exceed your perceived cost of replacement. When your job can be done by anyone with 2/5ths of a brain and the normal human complement of arms and legs, in short, a lowest-common-denominator job, you shouldn't expect to live anything better than a lowest-common-denominator life. If you want to be paid more, find some way to raise your perceived replacement cost. But it's naieve to assume that anyone is going to pay their employees more than it would cost to recruit and train a new person to do their job; anything less would be irrational, and corporations are notoriously un-irrational.