Howard Schultz on Health Care
Starbucks CEO; independent candidate for President until July 2019
A: We have a health care crisis in the country on many levels. The Republicans have done everything possible to eradicate the Affordable Care Act without offering any plan -- this is the far right. The far left is now suggesting Medicare for all. That is a $32 trillion number. Does anyone understand that Medicare-for-all also means that you will lose the choice of your doctor and your private insurance company?
Q: Your alternative?
One, I think everyone in America, every person deserves to have the right for affordable care. Second, there needs to be competition in the system so that the American people can get access to prescription drugs at lower prices, because right now the government is not allowed under a federal law to negotiate with pharma. Third thing has been tested but not proven yet about interstate commerce among insurance companies.
What's the truth? The truth is that healthcare costs are the biggest driver of unaffordable care. Yet neither side, extreme left, extreme right has offered and developed any kind of credible plan to reduce costs by increasing competition. Or requiring more transparency on prices from hospitals and drug companies. Or investing in preventive care. This is a problem that can be solved. We must bring down healthcare costs while increasing choice and access.
"We feel very strongly that this is the time to cut the healthcare benefit." For years, Starbucks had been spending more money on healthcare coverage for our partners than we spent on coffee. Between 2000 and 2009, healthcare costs were up almost 50% per partner. "Everyone will understand you had no choice," he told me.
Of course, we had a choice, Yes, eliminating or reducing healthcare for our partners could immediately boost profits. Wall Street would cheer. But it would be utterly unfair to thousands of people and their families, and verge on inhumane. It would also sap spirits and breach trust. I knew we'd never recover.
Wall Street's failure to recognize future benefits of current expenditures is part of the short-term mentality that's become a systematic problem of modern-day capitalism.
At the same time, health-care bills were soaring to unmanageable heights. Few companies covered part-time workers at all, and those who did restricted benefits to those working at least 30 hours a week. Most executives were actively looking for ways to contain their medical insurance expenses.
Starbucks went the other direction: Instead of cutting health-care benefits, we found a way to increase ours. I saw my plan not as a generous optional benefit but as a core strategy. Treat people like family, and they will be loyal and give their all.
We began offering full health benefits to all part-timers in late 1988. To my knowledge, we became the only private company--and later the only public company--to do so.
Then one day, Jim came into my office and told me he had AIDS. It took incredible courage. I had known he was gay but had no idea he was sick. His disease had entered a new phase, he explained, and he wouldn't be able to work any longer.
Starbucks had no provision for employees with AIDS. We had to make a policy decision. Because of Jim, we decided to offer health-care coverage to all employees who have terminal illness, paying medical costs in full from the time they are not able to work until they are covered by government programs, usually 29 months.
After his visit to me, I spoke with Jim often and visited him at the hospice. Within a year, he was gone. I received a letter from his family afterward, telling me how much they appreciated our benefit plan.
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Opinion Leaders on the Right:
Milton Friedman (Nobel Economist)
Rush Limbaugh (Radio Talk Show Host)
Ayn Rand (Author and Philosopher)
Heritage Foundation (Think Tank)
Joe Scarborough (Former Congressman; Radio Host)
Opinion Leaders on the Left:
American Civil Liberties Union
Noam Chomsky (Author and Philosopher)
Arianna Huffington (Internet Columnist)
Robert Reich (Professor and Columnist)
Howard Schultz (CEO of Starbucks)
John F. Kennedy(President,1961-1963)