Posts tagged costs

Ronald A. Duperroir, Principal Clarity Health

I read an interesting article in Wall Street Journal dated 12 Jun 09 written by Steven A. Burd (CEO Safeway, Inc).   Mr. Burd shared his thoughts and results obtained through leadership implemented market based healthcare solutions on healthcare policy and how, through incentivizing employees toward better personal health, reduced the actual cost of health-care in his organization by as much as 40%.   You see, at Safeway, the leadership team believes in the concept that a well-designed health-care initiative utilizing market-based solutions can ultimately reduce internal operational costs as well as impact the national health-care bill.   Burd cites the key to achieving these savings is providing focus health-care plans supported by corporate policy to those requiring health modification that rewards health improvement based upon measured success criteria.   As a self-insured employer, Safeway designed just such a plan in 2005 and has made continuous health improvements each year.   According to the leadership team, the results have been remarkable.    During a four-year period, healthcare costs have remained flat on a per capital basis (that includes both the employee and the employer portion), while most American companies’ costs have increased 38% over the same four years.
 

Clarity Bariatrics is a firm believer and endorses this concept of employer incentivized behavior modification.   Based in Dallas Texas, Clarity Bariatrics (www.claritybariatrics.com), is one just one of the many market based healthcare solutions provided by the Clarity Companies (www.clarityplace.com).    Lead by disguised healthcare physicians and executives, we have designed  a health smart program to assist both the insured and self-employer in reducing their healthcare costs.   Through programs focused on the employee behavior modification and the continuum of medical and surgical weight loss care, it is our mission to bring change into your work force environment.   The Clarity programs focus on eliminating tobacco usage, maintaining a healthy weight, blood pressure, cholesterol levels and reducing likely heart damage due to these morbidities.    Studies show that wellness results in the reduced consumption of healthcare.   Studies as far back 1998 show the cost of obesity to U.S. business was estimated at $12.7 billion, 80 percent due to moderate to severe obesity.1   A more recent  2002 study notes that obesity is associated with greater healthcare use and cost, particularly pharmaceutical and laboratory costs.   Employees with at-risk BMI had, on average, healthcare costs that were $2,326 greater over a three-year period than employees with a lower BMI.2   Additionally, people who are obese had 239 million more restricted-activity days, 89.5 million more bed days, and 39.2 million more workdays lost, as compared to lean people.3       

In addition to reducing healthcare dollars spent,  the Clarity programs can assist your company in reducing worker compensation claims, work place injuries, and absenteeism all while improving employee health and morale.  Safeway’s plan capitalizes on two key insights they gained in 2005.   The first is that 70% of all health-care costs are the direct result of behavior.   The second insight, which is well understood by the providers of health care, is that 74% of all costs are confined to four chronic conditions (cardiovascular disease, cancer, diabetes and obesity).  Add to this that 80% of cardiovascular disease and diabetes is preventable, 60% of cancers are preventable, and more than 90% of obesity is preventable.   Obesity alone has been shown to be associated with a 36 percent independent increase in inpatient and outpatient spending and a 77 percent increase in medication use.4

American companies are supported under a provision in the 1996 Health Insurance Portability and Accountability Act that allows them to differentiate premiums based on behaviors and have found favorable results.   A Bank One® study evaluated the direct and indirect costs of obesity.  The mean healthcare cost (three-year average) for those with at-risk BMI was $8,759, compared to $5,245 for the population not at risk.5       Programs focused on behavior modification such as in the Safeway example, start by collecting data using outside parties such as Clarity.  This data is considered protected patient healthcare information is not shared with company management.  If employees  pass gates of health criteria, annual premiums are reduced $780 for individuals and $1,560 for families.  Should they fail, they can be tested again in 12 months.  If they pass or have made appropriate progress on something like obesity, the company provides a refund equal to the premium differences established at the beginning of the plan year.   As a result of this policy, Safeway reports obesity and smoking rates are roughly 70% of the national average and their health-care costs for four years have been held constant. 

If you are considering a health based wellness strategy in your business model, please consider giving Clarity an opportunity to join your team.  Our programs are tailored to your corporate environment and are educationally based.   This mean we believe in patient controlled self modification.   However, we also accept that many people will not overcome bad habits on their own accord.  Thus, we provide a solid program that contains additional elements of medicine by providing medically supervised programs and surgical weight loss intervention.  

References

1. Jacobsen M. The Epidemic of Obesity: The Costs to Employers and Practical Solutions. Washington Business Group on Health

Summit on Obesity, Cardiovascular Disease and Diabetes 2002 Dec 5.

2. Wolf A. Economic Outcomes of the Obese Patient. Obes Res 2002;10:58S-62S.

3. Wolf AM, Colditz GA. Current estimates of the economic cost of obesity in the United States. Obes Res 1998;6(2):97-106.

4. Salinsky E, Scott W. Obesity In America: A Growing Threat. National Health Policy Forum Background Paper 2003 Jul 11.

5. Burton W, Chen C, Schultz A, et al. The Economic Costs Associated with Body Mass Index in a Workplace. JOEM 1998;40(9):786-792

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