Progressives Against Safeway: the Spin

by Martin Harris

Martin Harris

About when religious refugees fleeing English persecution for heresy were landing on a large rock (test your history student for the date) at the western edge of Cape Cod Bay, major digressions from doctrine were earning miscreants exercise time on the rack or carbon-footprint-time at the stake. Think Giordano Bruno, who became toast in a Vatican funeral pyre in 1600 because he argued that the planets circled the sun, while a more prudent near-contemporary astronomer Galileo chose recantation in 1633 over slow carbonization. Contrast: In these more enlightened times they endure only printed verbal assaults (and, of course, in blue states, precisely targeted economic retaliation) such as were aimed at supermarket chain Safeway by the Washington Post, exemplar of political correctness in thought and print. You’d think the Beautiful People who, from their various seats of power in the District of Columbia (mostly, they reside in the once-farmland but now sub- and ex-urbanized counties of northeastern Virginia, would see Safeway as one of their own -after all, its stores (mostly West Coast US and Canada) have sushi bars, Starbucks kiosks, and aisles lined with cilantro and arugula trays-but, sadly, not so. That’s because its employee health-care plan is based on the heretical notion that those of its staffers who demonstrate, through physical exams, that they’ve been practicing healthful behaviors, should pay lower insurance premiums than their jobsite peers who don’t.

The Post’s January ’11 critique written by staffer David Hilzenrath starts with his casual assertion about “the myth about Safeway” demonstrating that “the untested claims of interest groups can take on a life of their own and shape national policy”. For this double-barreled assertion there has to be 1. a myth about Safeway; and 2. some evidence that it’s involved with untested claims. If you define a policy myth as something which, upon actual results analysis turns out not to be so (think class size reduction, which was promised by education experts to improve student achievement and notoriously hasn’t) then the Safeway Plan is no myth. In a fast-rising cost environment SP has kept its per capita costs just about level, and it hasn’t even had to go out and buy new measuring devices to show seemingly better results, as almost every State now has easier achievement tests than the Federal one so that each can show better results from the expensive reduced-class-size policy. If you define untested claims as something where the results of some program or policy have never been tested, that isn’t the Safeway Plan. Its numbers have been posted for all to read, in contrast with, say, Head Start, where the resistance to testing has been endemic from its start in 1965 and what few tests have been administered turn out to have been tilted to show better answers (see the analyses of education researcher John Hanushek on this subject) or, in the case of the Tennessee Star Study, the experiment’s own design structure has since come under question. But then Mr. Hilzenrath is careful to compose his sentences so that he doesn’t precisely connect his “myth” and “untested” accusations directly to the Safeway Plan. It’s as if he -oh, no-just wanted to create an atmosphere of disrepute without getting caught with a suddenly non-operable (a little DC .lingo, there) exposed non-fact.

Actually, there is a historical myth (based on actual fact) about Safeway; it was the first supermarket chain to sell only (and at slightly lower price) for cash, not the hitherto-standard grocer practice of letting customers run up tabs (whereby the costs generated by non-payers end up in the food costs of payers) and offer an alternative to the sometimes-creative bookkeeping benefit of “the furnishing man”, the general-store proprietor of the share-cropping era. Buying food for cash was the new Safe Way, the corporate name adopted in 1925.

The heart of Hilzenrath’s critique is his ideological aversion to risk assessment on the individual basis (as in done with all other types of insurance) to set premium costs, and he implies that nowhere else in health-care is it even thought of. Not so: age-based (and age is a pretty good proxy for infirmity, as we all eventually learn) premiums are used in widespread forms of health insurance. Grudgingly ( my choice of adverb) he concedes, ” rewarding or penalizing people may save money over the long run”, (Gloriosky Zero, I thought that was the policy objective) “but Safeway hasn’t proved it”. He then claims that keeping premiums flat (in a fast-rising-cost environment) isn’t saving money, in direct opposition to Safeway Chairman Burd’s substantiated claim that “per capita costs have been kept flat” and that thereby, Safeway has saved money, compared to what it would have had to spend. Usually (in education, for example) Progressives like the avoided-cost argument: consider the teacher-pay bumper-sticker, which reads “if you think education is expensive, consider the alternative”. You decide who’s the more credible. And then Hilzenrath returns to ideology: “American families with average health benefits could have $6,688 a year riding on blood tests and weigh-ins”. He thinks that awful; some of us, less intelligent than Progressives, as they constantly point out, think that’s ideal: it’s called incentivation to stay healthy. In an era when Progressives want to pay semi-literate grade-schoolers to pass dumbed-down proficiency tests, you’d think they’d like incentivization in health-care insurance just as much, but apparently not. Why not, I know not.

And Hilzenrath doesn’t like the down-side of rewarding the non-obese and non-high-blood-pressure employees with reduced premiums: it’s a “penalty” for those who don’t behave healthily, he argues. Burd agrees: of course, he says, “a carrot is nothing more than the mirror image of a stick”. Just like the higher auto insurance costs for the driver who keeps hitting things. And just like the Matthew Principle in the New Testament: rewards for those who choose to achieve, penalties for those who could so choose but don’t. The submerged part of the iceberg (a little Titanic analogy, there) is the upward cost curve of conventional (approved by Hilzenrath) health care. So far, only the Safeway Plan has been put forth as a practical change-of-course, saving enough taxpayer money for the USS Medicare to avoid a comparable fate.