CostCo spending one billion dollars on healthcare (est.)


According to my calculations after input from the Bloomberg News editor

CBS This MorningWhile watching CBS This Morning last week, I learned that CostCo foots the healthcare bill for 88% of its 174,000 well-paid employees. A company known for taking care of its workforce, they lead the industry with an outrageously low turnover rate of just 5% a year. As the saying goes, “take good care of your people and they’ll take care of you.”

So I decided to write a letter to the CEO and open his eyes to a revolutionary way to REALLY take care of his people—and save hundreds of millions of dollars in the process. Here’s my letter that went out Friday via Priority Mail along with a copy of our book and a hard copy of our 4Leaf Corporate Wellness vision document.

      • Friday, June 7, 2013
      • Mr. W. Craig Jelinek, CEO, CostCo
      • Subject: Slashing the cost of healthcare in businesses

CostcoDear Mr. Jelinek,

Today’s edition of CBS This Morning featured an interview with the Bloomberg editor talking about your favorite subject—CostCo. I took some notes during the interview and ran a few numbers afterwards.

Your estimated cost of healthcare. Using numbers I heard on the show, combined with information from Wikipedia, I computed that the company’s share of your entire workforce’s cost of healthcare is close to one billion dollars a year—probably exceeding $2.5 million per day. How can you reduce that HUGE number and how would that help provide value to your member? I refer to one of your quotes from another source:

“We are constantly looking at ways to improve our efficiency…We need to compete in the marketplace so we’ll consider anything that adds value for our members.”

Did you know that our unhealthy food choices are driving up to 80% of our cost of healthcare in the USA? That means that you could conceivably eliminate hundreds of millions of dollars that are adding ZERO value for your members.

Who am I and how can I help? Like you, my first job in high school was bagging groceries atNational Foods in Murfreesboro, TN. I later studied Industrial Engineering at Auburn University and earned an MBA from the University of Hawaii while on active duty in the U.S. Coast Guard. Since then, most of my career has been devoted to improving profitability in numerous enterprises by eliminating waste in diverse companies like Sears, ITT, and Holiday Inns. My last executive position was EVP of  Operations with Polo Ralph Lauren Corporation.

So what’s that got to do with the cost of healthcare? It’s a long story that I can explain when we meet. The attached “vision” document outlines our detailed approach to helping you lower your cost of healthcare by anywhere from 15% to 50%. Those are VERY big dollars at CostCo and I would like the opportunity to review our approach with you in person.

As you can see from my website (hpjmh.com), I am now directing my “waste reduction” skills to a new arena, focusing on an issue that may be the most important issue in the history of the world. I am talking about our food choices and the collective impact that they have on our health, our cost of healthcare, our environment—and, ultimately, the long-term sustainability of the human species.

Corporate Wellness---the 4Leaf Vision for a whole new ballgame

Corporate Wellness—the 4Leaf Vision of a whole new ballgame

Since 1960, the cost of health care in the United States as a percent of our gross domestic product (GDP) has risen sharply from 5.2% in 1960 to the 18% that we have today. Most of this huge problem is driven by our food choices—and it’s still getting worse.

I have concluded that our only way out of this mess is for the CEOs of America to take the lead. That’s because corporate CEOs, like yourself, are the only prominent leaders in our nation with a strong financial incentive for all of their employees to be healthy.

In developing our attached “corporate wellness” vision document, I drew heavily on the counsel of my friend Paul Allaire, the former CEO of Xerox. Now retired, he is a strong believer in the approach outlined in our book and has made it very clear to me that this kind of initiative does not have a prayer unless the top guy is driving it. We agree. That’s why I am writing directly to you. By the way, Mr. Allaire provided the following endorsement that appears on the back cover of our book:

“We all know we should eat more fruits and vegetables—with this book, we now know why. The authors make a well-documented case for why it is important for your personal health and why it is critical for the health of the planet. A compelling book; it is both informative and a pleasure to read!” —Paul Allaire, Fortune 100 CEO (Xerox, 1990–1999)

Please take a look at the attached document; then let’s meet in person to discuss. On the last page of the enclosed document, you will see a summary of my credentials for helping you take hundreds of millions of dollars a year out of your cost of health care—while yielding a healthier, happier and more productive workforce as a fringe benefit.  I think your Costco members would approve.

Looking forward to hearing from you soon; please call me at 917-399-9700.

Sincerely,

J. Morris (Jim) Hicks

PS: There are only two prominent CEOs (to my knowledge) who are doing anything close to resembling what I describe in the attached “vision” document. They are John Mackey at Whole Foods Market and Mayor Rahm Emanuel at the City of Chicago. And, in both cases, their cost of healthcare is going down.

ATTACHMENT. 4Leaf Corporate Wellness—Vision Document

Phillip Wollen---argues in Australia for taking meat off the menu.

Phillip Wollen—one of Australia’s most prominent citizens (former Citibank to exec)

Endorsement from down under. After reading the above document, my friend Philip Wollen (former Citibank top executive in Australia) sent me this note; gotta just love that second line.

Dear Jim,

You have written a powerful document. Any CEO who does not read it with a racing pulse should be fired.

At the very least, any CEO worth his/her salt should assign the task of meeting you to a key executive responsible directly to the CEO. . . . . . .with a requirement that he addresses all your issues and makes a recommendation (one way or another) to the CEO within 60 days.

Philip Wollen

Click here to hear Philip’s fiery 10-minute speech from down under—the best 10-minute summary of our international food/health/sustainability dilemma that I have ever heard.

The Bottom Line. Eventually, some of our nation’s most enlightened CEOs will embrace the 4Leaf Corporate Wellness Solution. Soon, they will begin to reap staggering savings in healthcare expenditures AND the improved productivity of a healthier workforce. Ultimately those CEOs who don’t choose to truly promote health in the workplace will no longer be able to compete with those who do.

Send this blog to the CEOs of corporations where you are a shareholder. Ultimately, they work for you. Please ask them to give me a call. 917-399-9700.

Even Joe Biden shops at CostCo. Maybe CostCo can show our elected leaders how to get our nation's healthcare bill under control.

Even Joe Biden shops at CostCo. Maybe CostCo can show our elected leaders how to “fix” healthcare.

Handy 4-piece take-charge-of-your-health kit—from Amazon.com

Want to find out how healthy your family is eating? Take our free 4Leaf Survey. It takes less than five minutes and you can score it yourself. After taking the survey, please give me your feedback as it will be helpful in the development of our future 4Leaf app for smartphones. Send feedback to jmorrishicks@me.com

International. We’re now reaching people in over 100 countries. Follow us on Facebook and Twitter or get daily blog notices by “following” us in the top of the right-hand column. For occasional updates, join our periodic mailing list.

To order more of my favorite books—visit our online BookStore now

J. Morris Hicks, working daily to promote health, hope and harmony on planet Earth.

For help in your own quest to take charge of your health, you might find some useful information at our 4Leaf page or some great recipes at Lisa’s 4Leaf Kitchen.

Got a question? Let me hear from you at jmorrishicks@me.com. Or give me a call on my cell at 917-399-9700.

SHARE and rate this post below.

—J. Morris Hicks, board member, T. Colin Campbell Foundation

About J. Morris Hicks

A former strategic management consultant and senior corporate executive with Ralph Lauren in New York, J. Morris Hicks has always focused on the "big picture" when analyzing any issue. In 2002, after becoming curious about our "optimal diet," he began a study of what we eat from a global perspective ---- discovering many startling issues and opportunities along the way. In addition to an MBA and a BS in Industrial Engineering, he holds a certificate in plant-based nutrition from the T. Colin Campbell Center for Nutrition Studies, where he has also been a member of the board of directors since 2012. Having concluded that our food choices hold the key to the sustainability of our civilization, he has made this his #1 priority---exploring all avenues for influencing humans everywhere to move back to the natural plant-based diet for our species.
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6 Responses to CostCo spending one billion dollars on healthcare (est.)

  1. Sal Liggieri says:

    Jim,

    You are an eloquent writer. That is a powerful message: But is it powerful enough for any CEO to listen?

    Why is change so difficult?

    One year ago my wife and I and her sister and husband attended the 10 day McDougall program in Santa Rosa, California. Both the sister and husband are obese with many medical problems so this was the perfect opportunity to change their lives.

    One year later, did change come. No, they are both fatter and sicker than before. Part of the husbands medical problems: he has already had bypass and prostate surgery, and now is afflicted with serious dementia. After spending more than $11,000 for the McDougall program, their favorite food is still hamburger, pizza, and coca cola. They are both only 73 years old.

    Change is difficult and in my opinion will never happen. America is destined to wallow in all its blubber. Fat, fat, disgustingly fat . . . that is America’s legacy to the world . . . viva McDonalds, our national shrine to obesity . . . not only infecting America but most of the world.

  2. Joanne Irwin says:

    I’ll be surprised if Jelinek doesn’t respond. He’d be a fool not to!
    Great letter, Jim.

  3. Anne says:

    Bravo! Please let us know the outcome of your correspondence.

  4. John Benjamin Sciarra says:

    After watching 60 Minutes last night about HMA and how they are driving up hospital stays for profit, you’re going to tick them off with your programs! Imagine people not needing hospitals except for serious complications? Horrible I tell you. Just horrible! 🙂

  5. Leo S. says:

    Another excellent article, with many more links with additional information. It is hoped people and companies will take the time necessary to read/view what is presented. There is much resistance to hearing something that may suggest a change in lifestyle as the following responses indicate.
    ——
    “Thank you for your letter on your food / education venture and the cost of healthcare reduction consulting. As you can imagine, the CEO can’t take on anything else at this point regardless of the importance of those issues as well.”
    ——
    also
    ——
    “…most people will not consider the information, no matter how factual it is.”
    ——
    It’s a shame those are typical responses. Life is still the most important possession. With it we do all else. Without life there is no need for any of the products/services offered by various companies. People are still our most important product.

  6. Karl Wallace says:

    Dear Mr. Jelinek – here’s hoping you see ROI potential. I do hope you take the opportunity to meet Mr Hicks, perhaps with the benefit of doubt.as your entree

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