I read with great interest a story in the Minneapolis StarTribune the other day. The story described a health insurance “risk rating” program adopted by Minnesota-based Graco (and others), a plan to reduce health costs through wellness promotion. The idea is that individuals who exhibit controllable or treatable health risks will pay more for their insurance premiums than their less risky co-workers, unless they address their risks through medical consultation or lifestyle modification. Whatever else one might think about the idea, it’s presented in the article as an innovation, a creative approach to a difficult problem. Actually, I saw a CBS news story about similar programs within the past year, with the concept again being presented as a somewhat new and radical approach to motivate individuals toward healthier lifestyles and, in the process, control costs of corporate health insurance.
I find these stories interesting in part because my former company, Foldcraft, adopted what was likely the first such risk-rating program in the country almost twenty years ago. Featured in wellness conferences, business periodicals and even a mention in Time Magazine, the program was obviously way ahead of its time, a risk rating plan that carried its own risk because of the newness of the idea, a personal responsibility for health risks that insurance companies and government agencies viewed with suspicion. Despite the dramatic decrease in our health care costs tracked over the first five years of the program’s existence, the plan was eventually discontinued from fear of legal challenge which the Company simply wasn’t in a position to fight had a legal challenge been made. To this day, the decision to discontinue the plan is one of the few regrets that I have from my years there.
The point to be made isn’t about how Foldcraft Co. led the way on corporate wellness, but rather, the importance of seeing new ways of looking at the problems that confront us. Wellness programming at Foldcraft stemmed from a few employees who had an interest in driving the Company to an holistic health in all of its dimensions, including the personal health of its members. That interest created the foment for thinking about health insurance premium costs in a very different way, which in turn created a new source of cost savings for the Company and health for the participants in the program. Skepticism from others didn’t diminish the importance of a new way of thinking about improved self-responsibility and cost reduction.
Our current economic and business dilemmas are nearly unprecedented and demand no less than the same kind of radical change in our perspectives. And nowhere is the potential for such innovative thought broader or stronger than within employee-owned companies across the country. Solutions to the distresses of the times are to be found within our collective, collaborative experiences, if we are willing- and allowed- to look there.
Academics and some politicians don’t see the solutions residing there, instead relying upon their own inexperience and often untested ideas to throw rocks. The latest attack on ESOPs comes from Andrew Stumpff, an employee benefits law professor at the University of Michigan Law School and the University of Alabama Law School, along with Norman Stein, a Douglas Arant Professor of Law at the University of Alabama Law School. Their article published in the October 19, 2009 issue of Tax Notes posits four arguments against current ESOP law, arguments which likely would never have even been made had either of these pundits actually been part of an ESOP or even seriously studied ESOP performance. Nonetheless, they have taken their best shot out of some egalitarian and/or short-sighted perspectives, views that have always been killers of creativity, innovation and change. While the ESOP community implores business and government entities to look at the realities of ESOPs, the academics argue from theory and supposition.
This latest episode is quite reminiscent of those years ago, when an ESOP company launched a new wellness idea that offered one reasoned solution to the growing health cost problem in our companies and society. The pundits took aim and, despite metrics of success, managed to kill off a strategy that today is apparently coming back stronger and more necessary than before. Similarly, the ESOP community has relied upon the wisdom and voices of its members over the years to forge a new way of thinking about corporations, ownership, wealth and fairness. It’s a lesson that academia and Washington would be well-advised to hear. Innovations are found throughout the length and breadth of this country and its workplaces, even moreso than in ivory towers or Washington….

When you see that trading is done, not by consent, but by compulsion- when you see that in order to produce, you need to obtain permission from men who produce nothing- when you see money flowing to those who deal, not in goods, but in favors- when you see that men get richer by graft and pull than by work, and your laws don’t protect you against them, but protect them against you- when you see corruption being rewarded and honesty becoming a self-scarifice- you may know that your society is doomed.