On Monday's CBS This Morning, Cheesecake Factory CEO David Overton spotlighted the looming economic impact of Obamacare's implementation, especially on small enterprises: "For those businesses that don't cover their employees, they'll be in for a very expensive situation." Overton also warned that the cost of the law would be passed on to customers.
Anchor Norah O'Donnell raised the issue of the still-controversial health care law: "One of the things that's going to change, of course, in the new year is ObamaCare, or the Affordable Care Act. How do you implement that at Cheesecake Factory, and how will you pay for health care for all of your employees?" [audio clips available here; video below the jump]
The restaurant chain executive pointed out that, unlike many businesses, The Cheesecake Factory is "already...paying a great deal in health care. So, we're not sure how much more it will be - or how much less - or what exactly we'll do. So, for us, it won't be as bad as it will be for others, which it will be very costly."
O'Donnell followed up by asking about the possibility increased prices for customers: "When you say it will be very costly, it will be passed on to who - the customers?" Overton confirmed that this would be the case: "Well, I believe most people will have to do that or cheapen their product."
It's surprising that the liberal morning newscast would bring on a critic of ObamaCare. The decision could be explained by anchor Charlie Rose mentioning ex-Al Gore adviser Dr. Atul Gawande's compliment of The Cheesecake Factory in a recent article in The New Yorker.
Rose later rephrased his co-anchor's earlier question: "Are you worried about this - ObamaCare - and how you provide the health care?" The CEO replied by again pointing out the high cost to businesses:
When Papa John's CEO John Schnatter sounded the same warning earlier in 2012, liberals called for a boycott of the pizza chain. Conservatives responded by organizing a National Papa John's Appreciation Day online. It shouldn't be a surprise if left-of-center activists target The Cheesecake Factory next.
The transcript of the relevant portion of the David Overton interview from Monday's CBS This Morning:
[CBS News Graphic: "Cheesecake Chat: CEO On 'Factory' Growth, Health Care Model"]
NORAH O'DONNELL: I have a really important question for you: one of the things that's going to change, of course, in the new year is ObamaCare, or the Affordable Care Act. How do you implement that at Cheesecake Factory, and how will you pay for health care for all of your employees?
DAVID OVERTON, CHEESECAKE FACTORY CEO: Well, that – that's a big question. We are working on that right now. We – we have been waiting to see what people will do and what's really happening and what the – the different requirements will be. However, we do cover everyone that works over 25 hours today. So, unlike a lot of businesses, we already are paying a great deal in health care. So, we're not sure how much more it will be - or how much less - or what exactly we'll do. So, for us, it won't be as bad as it will be for others, which it will be very costly.
O'DONNELL: But – but when you say it will be very costly, it will be passed on to who - the customers?
OVERTON: Well, I believe most people will have to do that or cheapen their product-
O'DONNELL: And how much do you think you will have to raise prices in order to pay for health care?
OVERTON: Well, as they say, we don't know what – we don't know what it is right now. We don't know if what we're actually paying is very, very close - and we won't have to raise prices. So, we'll see. I'd love to answer that for you – maybe in a year, I could.
CHARLIE ROSE: Okay. And so, and that point, a year from now, what would we be able to learn from you, you think, because The New Yorker magazine wrote this article saying that you had a lot of things that you could teach - from your experiences with health care.
OVERTON: I think – yeah - I think Doctor [Atul] Gawande. It's not that I teach. He's looking at us as a model. He thinks we're the gold standard of the restaurant business. We do so many things right. We train; we innovate; we cut cost; and we – and we completely change the menu twice a year. And he's never had a bad meal, and he says, how can we cook a thousand meals a day and get consistency? Wouldn't that be a great model for the health care industry? So, he's taking us and not linking us, as much as saying, these guys know what they're doing. Over the years, they've really built a model that works. Why can't we be more like them?
ROSE: Are you worried about this - ObamaCare - and how you provide the health care?
OVERTON: Not worried yet - and, when I hear the numbers, I might be. But, again, because we spend millions and millions of dollars today on health care, we don't know exactly how much more we'll pay. For those businesses that don't cover their employees, they'll be in for a very expensive situation.
