Few people consider Walmart a paragon of public virtue. But no one would deny that Walmart is the avatar of low costs.
That's what makes a recent piece on Walmart's employee health-care plan so interesting. The company long resisted providing benefits to employees at all. But then it discovered that health care actually wasn't that expensive for most workers -- big costs were really driven by a small number with high-cost conditions. Then it realized that it could drive down those high costs through a simple expedient: providing even better care. All of a sudden, workers with serious health challenges were getting all-expenses-paid trips to the Mayo Clinic.
"We come at it from the perspective of how can we improve quality," a senior vice president told National Journal. "When we improve quality, often there will be a reduction in waste or unintended or unnecessary cost." (This echoes similar findings about Mayo's approach generally.)
Aside from what this says about health care, there is a lesson here about government. Look what Walmart discovered: Costliness generally isn't due to everyone and everything but rather a few specific problems. In most cases, investing in avoiding the problem costs less than enduring the problem itself -- as numerous companies have found when it comes to reducing waste of energy or, for that matter, anything else: Doing "the right thing" is often cheaper, because the "wrong thing" almost by definition produces "waste" of some sort. And "waste," by definition, is a cost -- or as Dow Chemical's highly profitable in-house effort puts it, "Waste Reduction Always Pays". (Here's an interesting paper that opposes so-called "triple-bottom-line" accounting, but argues that socially-conscious decisions by corporations benefit them in the long run.)