Wednesday September 14, 6:33 pm ET
By Matthew Daly, Associated Press Writer

 

Starbucks to Spend More on Health Care Than Coffee, Company's Chairman Says

WASHINGTON (AP) -- Starbucks Corp. will spend more on health insurance for its employees this year than on raw materials needed to brew its coffee, the company's chairman said Wednesday.

 

Howard Schultz, whose Seattle-based company provides health care coverage to employees who work at least 20 hours a week, said Starbucks has faced double-digit increases in insurance costs each of the last four years.

"It's completely non-sustainable," he said.

Schultz made the comments Wednesday at a meeting with Sen. Patty Murray, D-Wash., and Rep. Adam Smith, D-Wash. The event was one of several organized by Schultz and other executives to call attention to what they called a growing health care crisis.

"I would hope congressional leaders put this at the front of their agenda," said Schultz, noting that a majority of the estimated 45 million uninsured Americans have jobs.

Later, Schultz and other executives, including Costco CEO Jim Sinegal; Dawn Lepore, president and CEO of Drugstore.com; and Ivan Seidenberg, chairman and CEO of Verizon Communications Inc., attended a health care summit at a Senate office building.

Meanwhile, the Kaiser Family Foundation reported Wednesday that the growth rate of health insurance premiums failed to reach double digits this year, the first time that's happened since 2000.

Still, premiums rose much faster than overall inflation and wage growth, the report said.

The foundation, which specializes in health care research, said premiums increased 9.2 percent between spring 2004 and spring 2005. Such an increase could devour much, if not all, of the 2.7 percent increase the average employee saw in wages.

"There is some good news, I suppose. The rate of growth is slightly lower than last year," said Drew Altman, the foundation's president and CEO. "The bad news is that's the only good news, because premiums are still going up 3 times faster than wages."

Schultz said Starbucks expects to spend about $200 million this year for health care for its 80,000 U.S. employees -- more than the total amount it spends on green coffee from Africa, Indonesia and other countries.

Starbucks has about 100,000 employees worldwide, Schultz said, including about 65 percent who work part-time. Increasingly, the company is hiring older workers, who are attracted in large part by the company's generous benefits, he said.
Schultz said Starbucks' benefits policy is a key reason it has low employee turnover and high productivity.

He declined to endorse any specific legislation, saying his goal was to raise awareness of the problem. But whatever solution is adopted, he said, "Every single American needs to have access to health insurance -- full-stop."

Associated Press writer Kevin Freking contributed to this story.
Starbucks: http://www.starbucks.com
Kaiser Family Foundation: http://www.kff.org

 

Bullet Points for Legislators

  • Single Payer saves money.  For the past 20 years, states have commissioned studies on different types of health care systems.   In EVERY case, single payer was shown to be the only way to cover everyone and the only system that saved money and controlled costs.

  • Publicly financed does not mean government run health care.  YOU have publicly finance health coverage, but the government does not make decisions regarding your health care.

  • Cost conscious patients often don't get the care they need.   Most decisions are made by the doctor in concert with the patient, but the patient relies on the doctor's knowledge to make a decision.  Expensive tests and treatments cannot be ordered by the patient, only the doctor.

  • Lifestyle choices are not what is fueling high costs in health care.   The United States ranks low in general health indicators, but high in good health habits.  We smoke less, drink less and consume less animal fat that many other countries with better health indicators and much lower health care costs.

  • Businesses can accurately determine their health care costs and are not subject to unanticipated large premium increases.

  • It will reduce labor costs due to a more efficient way of financing health care, eliminating much wasteful administration.

  • Workers' Compensation costs will be reduced, likely by half, due to the fact that everyone has health coverage and there is no need for the medical portion.

  • It reduces the need for part time employees and provides easier recruiting.  There are no pre-existing conditions or Cobra issues.

  • Eliminates the oversight of health benefits and bargaining health coverage with employees.

  • It creates healthier personnel and more stable employees, reduces absenteeism and eliminates employer health coverage complaints.

  • It reduces employee health related debt and personal bankruptcies.

  • It frees up family income that can be spent on other goods and services, thus stimulating the economy.

Tips for Writing Letters to Editor

Follow guidelines for your local paper (word count, submission instructions, etc.)

Frame your letter in relation to a recent news item Use state specific data whenever possible (let us know if you need help finding some!)

Address counter arguments

Be aware of your audience and emphasize how Medicare for All is good for ALL residents of the state

Criticize other positions, not people Include your credentials (especially if you work in the healthcare field)

Avoid jargon and abbreviations

Don’t overload on statistics and minor details

Cover only one or two points in a single letter

Avoid rambling and vagueness

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