By Joseph Paduda

First Posted at Managed Care Matters on 11/15/2012

Joe Paduda, Principal, Health Strategy Associate

Papa John’s Pizza founder and CEO John Schnatter said he’s going to have to raise the price of his pizzas by 10 to 14 cents to cover the added cost of complying with Obamacare’s provisions. (turns out it’s only 3.4 to 4.6 cents per pie…)

Let’s think about that.  Fourteen cents a pizza gets all of his employees excellent health coverage (only about a third are covered now, even though Schnatter says he’d “like” to cover all of them….)  This isn’t to slam Schnatter, who by all accounts is a decent guy who raises money for worthy causes and tries to stay out of public politics.  He does get a bit too aggressive in his marketing efforts, but hey, that’s not the worst thing in the world.

Rather my concern is Schnatter’s perspective – which is consistent with what we’ve heard from other chain food outfits – is myopic – in several ways.

If his company doesn’t provide insurance for his low-paid workers, we taxpayers have to.  That’s the way Obamacare works; folks with incomes below 400% of the FPL (federal poverty level) can get subsidized coverage).  So, if Schnatter cuts his workers’ hours so he doesn’t have to insure them, all of us taxpayers get to pay for their health insurance.  Schnatter is avoiding his responsibility and increasing our tax burden.

Sure, you can protest that you don’t believe in/like Obamacare for whatever reason, but you don’t get to pick and choose where your tax dollars go.  I don’t like paying for subsidies for corn ethanol or grazing rights in Wyoming or all-but-useless medications for seniors or pointless and stupid wars, but “elections have consequences” (yes, that’s two Karl Rove quotes in less than a week…).

There’s a widely held belief that workers without health insurance file claims with workers comp if they get hurt off the job.  Overall, this doesn’t seem to be the case, but there’s no doubt individual workers do try this, and some are successful.  Thus Schnatter’s position may lead to increased workers comp costs, however slight.

Finally, as long as he’s stuck with Obamacare’s coverage requirements, there’s this marketing angle – “you should buy Papa John’s because our pizzas are better than anyone else’s, because our people are happy and healthy.  And we take care of our workers, not like those schmoes at (pick a rival pizza company).”

Patricia Salber MD, MBA (@docweighsin)
Patricia Salber, MD, MBA is the Founder and Editor-in-Chief of The Doctor Weighs In. She is also the CEO of Health Tech Hatch, the sister site of TDWI that helps innovators tell their stories to the world. She is also a physician executive who has worked in all aspects of healthcare including practicing emergency physician, health plan executive, consultant to employers, CMS, and other organizations. She is a Board Certified Internist and Emergency Physician who loves to write about just about anything that has to do with healthcare.


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