For many employees, November is health care enrollment month. In recent years, re-signing has meant an increase in out-of-pocket expenses, higher premiums and deductibles, and/or less coverage — and sometimes all of the above.
The rising cost of health care affects not only the take-home pay of workers but the bottom line for companies. “It’s the gorilla in the room that is breaking the bank,” said Dave Rearick, medical director at gBehavior, an incentive-based behavior management firm. PricewaterhouseCoopers’ Health Research Institute predicted that corporate medical costs would rise 9.9 percent in 2008 and 9.6 percent in 2009. “Health care costs have become a top concern for CEOs,” Rearick said. “For manufacturers it’s usually a company’s third-greatest cost after labor and materials; for a service firm, it can be second, after compensation of employees.”
For the last decade, the trend has been to shift some of the cost to employees via higher premiums and co-pays or less coverage. “If the premium or cost of using the insurance becomes too high, of what value is the benefit?” Rearick asked. “The best way to control cost is to decrease utilization. It’s a lot cheaper to keep a well person healthy than [treat] a sick one. A healthy work force is a competitive advantage.” With chronic illness accounting for 75 percent of health care costs, organizations are beginning to integrate wellness programs, prevention education and disease management strategies into their benefit packages.
Surprising savings
“Seeing employers make innovative changes aimed at prevention and wellness instead of just shifting costs around is like a breath of fresh air,” said Nancy Kennedy, executive director of Northwest Georgia Healthcare Partnership. This not-for-profit organization, whose members include the city of Dalton and Hamilton Health Care System, is dedicated to improving the health of residents in Murray and Whitfield counties.
The organization was chosen to participate in the Diabetes Ten City Challenge in 2007, an initiative to teach employees with diabetes how to take better care of themselves. Based on the successful Asheville Project (1997) that has become a model for diabetes care by reducing payer costs and improving employee health, the challenge was sponsored by the American Pharmacists Association Foundation and funded by GlaxoSmithKline and participating employers.
“We had four employers with a total of about 5,000 employees, out of which about one in eight had diabetes,” Kennedy said. “When a patient gets into care, you’d think the health care costs would increase, but actually the opposite happens. The medication costs increase, but hospital, doctor and emergency room visits caused by uncontrolled symptoms and complications go down. We saw the cost per participant decrease by $1,460 in the first year.”
Employers paid for the medication and doctor visits of diabetic employees who agreed to meet regularly with a pharmacist trained in diabetes education. The pharmacist tracked the patients’ glucose levels and showed them how to make healthy changes to their lifestyles. Face-to-face consultations were key in getting people to take responsibility for managing their disease, Kennedy said.
By Laura Raines
