Another View on Safeway

Wall Street Journal readers might have noticed two different takes on Safeway CEO Steve Burd's health-reform agenda this morning. Kim Strassel praised his success at keeping health costs flat for four years, through an incentive-based plan that rewards employees for quitting smoking and other healthy changes, and characterized him as an opponent of government-run health care. Over on the letters page, yours truly and others criticized Mr. Burd's involvement with the political class, especially his proposal that the government should "cover all Americans" with a plan like Safeway's.

How did Ms. Strassel and I come to such different conclusions about Mr. Burd's vision? Mr. Burd himself had a column in the WSJ on June 12, in which he claimed that "if the nation had adopted our (Safeway's) approach in 2005, the nation's direct health-care bill would be $550 billion less than it is today." Well, maybe it would – but not if the federal government passed a law imposing it on us.

Mr. Burd's political activism is not new, although it is somewhat mysterious.  He was omnipresent at Governor Schwarzenegger's side in 2007, when the governator tried to pass a reform that would have increased health spending by $11 billion and compel every Californian to get either private or government coverage from a state exchange.  This was despite the fact that Safeway is not governed by California's health insurance regulations, because it is a large, self-insured employer. A federal law, ERISA (Employee Retirement Income Security Act of 1974) pre-empts state regulation for self-insured employers.

If Mr. Burd wants to spin off his benefits department into a company that advises others how to be as successful as Safeway has been (which is what Pitney-Bowes did), then we should applaud him. But as long as he seeks influence through lobbying, we should continue to be skeptical.

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