The Ostrich Option

There was barely contained anger last week in the offices of the National Retail Federation. Neil Trautwein, VP of NRF, the largest retail lobbying organization worldwide representing companies with some 24 million employees, was seething – “flabbergasted”, he said, over an unsettling article in the Wall St. Journal: Walmart, the nation’s largest private employer had stunned NRF and others by publicly endorsing mandated healthcare for employees. The company’s position was contained in a letter addressed to President Obama and delivered to White House Chief of Staff Rahm Emanuel. Clearly pleased by this development, Emanuel declared mandates and cost control to be “two sides of the same coin,” phraseology that the Administration and pundits are using to describe so-called “opportunities of crisis”.

NRF’s consternation was undoubtedly further fueled by the oddly juxtaposed pair of players who co-authored Walmart’s letter to Obama: the head of the Service Employees International Union, Andy Stern, and John Podesta, who chairs a liberal think tank and ran President Obama’s transition team. The sight of Podesta, an official from President Clinton’s days, standing shoulder to shoulder with Andy Stern and Walmart, the guardian of free enterprise, must have been nauseating and more than a bit unsettling to the NRF; a “breakaway” employer of Walmart’s size, allied with forces naturally hostile to free-enterprise thinkers, has the power to change the debate on healthcare mandates, and Walmart did just that last week. The NRF had to respond.

Within hours of the WSJ article’s publication Trautwein appeared on the cable business news channel CNBC where at first he blanched, hesitating under the withering, acerbic questioning of commentator Mark Haines who labeled Trautwein – and by inference, NRF and its member companies -- “cheap” for not supporting Wal-Mart’s position. As the four-minute segment progressed, however, Trautwein regained his footing, presenting strong arguments to support the NRF’s position: the marketplace and the government should act in concert, he said, but not in the way envisioned by Walmart, the SEIU and Podesta’s think thank. NRF wants healthcare reform with the marketplace as its fulcrum. Mandates don’t work, Trautwein added; government intervention should be limited to helping to control spiraling healthcare costs and reigning in Medicaid.

NRF has been upstaged before by big retailers, just as going its own way is nothing new for Walmart; the Costco/Starbucks/Whole Foods offer to compromise on the Employee Free Choice Act must have caused a run on antacids at NRF headquarters, and Walmart’s letter to Obama was only the most recent example of how lobbyists’ sense of direction can sometimes be eclipsed by industries they represent. Hurt feelings and differences over strategy and timing aside, however, the common element uniting all of these very public players, including the SEIU’s Andy Stern who shared the stage with Walmart’s healthcare announcement, is that they are engaged in the debate.

And then there’s us. What is it about the prospect of healthcare reform that so immobilizes our industry? You can almost hear our collective mouths clamping shut in defiant passivity. But why? This issue is as important to the hospitality industry as the Employee Free Choice Act, yet few of our industry’s leaders are being engaged to spur debate. Someone like Bill Marriott, for example, whose company has offered a myriad of healthcare options to its employees for more than twenty years could command attention and shape public opinion by going on CNBC and speaking about the market approach to healthcare, a solution the recently reintroduced SHOP Act, supported by the National Restaurant Association, mimics. Is Marriott’s way a way forward? Yes, perhaps it is, at least for some employers. Requiring employees to be insured, the backbone of nearly all the Congressional alternatives under debate could be another.

Timing is everything. It’s inconvenient, to say the least, that we are still mired in recession while talk of $1 trillion healthcare reform is being foisted upon us. That’s too bad, but it’s not an answer. There’s still time to either raise our hands for one of the existing proposals or lend a voice in support of another direction. And to those of us enjoying our summer at the beach, take note: sticking our heads in the proverbial sand is not an option.

Be honest and be well.

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