Dick Baird’s Comments
President and CEO of Giant Food
Speaking on Behalf of Ahold USA
May 19: National Coalition on Healthcare Press Conference
Good afternoon. As Dr. Simmons has indicated, I have the privilege of serving as the CEO and President of Giant Food, and I’m here speaking on behalf of both Giant Food, and our parent company, Ahold USA. As those of you who are local to this area know, we’ve been providing groceries to families in the Baltimore/Washington area for a long, long time.
We’ve also been providing healthcare benefits to a large number of our associates and their families for many years.
We employ about 26,000 people in the Washington/Baltimore area, and Ahold USA employs almost 170,000 associates up and down the eastern seaboard working under the banners of Stop & Shop, Tops, Giant, Bi-Lo, Bruno’s and Peapod.
To meet the needs of our customers, we seek to employ stable, responsible people…people who often have families, and who want and need healthcare. We provide healthcare access to the majority of our associates, and we want to be able to continue to do so.
However, the continual and dramatic double-digit increases in costs, driven by the current healthcare system, with no apparent end in sight, puts our ability to continue to provide decent healthcare at risk.
For example, Giant’s costs for providing medical coverage for our store associates increased by 52% from 1999 to 2002; our costs to provide prescription coverage increased by over 67% for the same period. Ahold’s costs to provide medical coverage increased approximately 23% from 2000 to 2001, and approximately 15% from 2001 to 2002. All indications are that this trend of double-digit increases will continue and even potentially accelerate.
Like many other companies, we’ve taken every reasonable action we could identify to control our healthcare costs. We have consolidated many of our regional plans and re-bid the administration of the plans to reduce plan administration costs. We’ve utilized PPOs and HMOs wherever they provide a cost benefit, while also providing the quality and access that our associates deserve.
We’ve utilized multi-tier prescription plans and co-pays, mandatory second opinions, and pre-hospital admission certification to encourage our associates to make cost-effective care choices. In some locations we’re piloting disease-management and associate education programs to help our associates to lead more healthy lives. Even with all these steps being taken, we continue to experience what we consider to be unnecessary and unremitting increases in healthcare costs – costs that we feel are best addressed by a fundamental revision of the healthcare system.
This difficult situation is further compounded by an inequity. Companies like ours who take on the responsibility of providing healthcare coverage incur not only the costs for covering our own associates, but effectively subsidize the healthcare costs of those uninsured or partially insured who are either unemployed or employed by companies that do not provide healthcare coverage. The costs to provide care to the uninsured in Maryland are estimated to be 8 to 9% of the cost of hospital care. As providers of medical coverage, we are being charged higher fees to help cover those costs. All we ask for, and what we need, is a “level playing field” where every employer pays their fair share, and where a company’s competitive advantage is achieved by means other than avoiding the provision of medical care coverage and shifting the costs towards those companies who do provide that coverage.
To address these issues in a piecemeal or voluntary fashion won’t work. We need a comprehensive overhaul of the system.
This won’t happen without strong, statesmanlike national leadership…and bold but well thought out legislative action. We strongly support the Coalition’s principles of healthcare coverage for all, cost containment, improved quality of healthcare, and simplified administration. Each of these elements is a necessary part of the solution…and the right thing to do. On behalf of Giant Food and Ahold USA, I would urge my colleagues in retail, and in other businesses, to take a hard look at the current system. The reality of its deep-seated problems, the runaway negative trends associated with both cost and quality issues, and to join in supporting the Coalition and our nation’s leaders in creating a new and better healthcare system.