HR e-Newsletter
Intelligence Unit Special Reports Special Events Subscribe Sponsored Departments Follow Us

Twitter Facebook LinkedIn RSS

Real Savings Will Come With a Healthier Populace

John Commins, for HealthLeaders Media, March 23, 2009

The discussions about healthcare reform so far have focused on issues addressed in President Obama's stimulus package, such as electronic medical records, expanding access, evidence-based medicine, bundling reimbursements, medical homes, and any number of worthy projects that could shave billions of dollars from the $2.4 trillion or so spent each year in the U.S. health sector.

Soon, however, medical professionals, politicians, and healthcare policy wonks will have to broach the biggest drivers for soaring medical costs. I'm speaking about the personal negligence of We the Fat People, and the generally poor health decisions that too many of the 300 million-plus Americans make every day.

Too many of us eat too much of the wrong foods, too many of us still smoke, we don't exercise, and some of us still don't wear seatbelts. This negligent behavior is handing society a bill for hundreds of billions of dollars in preventable medical costs.

So how do we get more Americans to take a greater role in promoting their own health?

Pay them. Or perhaps more accurately, when employees choose a healthy lifestyle, reward them with a share of the healthcare costs savings that that lifestyle decision creates.

Vic Buzachero, corporate senior vice president and chief HR officer at San Diego-based Scripps Health, says any attempt to expand healthcare coverage nationally needs to emphasize personal responsibility and personal reward.

"Otherwise, we all know that we are just moving money around or cutting benefits," he says. "And for the type of system we have, cutting benefits and rationing care is not the way to get to better care."

Scripps has a wellness program that paid $500,000 in 2008 to 2,800 employees in the form of free health insurance. Thousands of other employees in the wellness program were rewarded with reduced premiums, and program employees who weren't enrolled in Scripps self-insured health plan were instead rewarded with cash.

Right now, the only people with a financial incentive to promote preventive care are employers and health insurance companies. "We are conditioned to get sick, get fixed. Insurance pays the most if I am sick, so the rest of us don't think we need to control anything," Buzachero says. "If we all have skin in the game that would help us begin to realign the incentives and payments in such a way that behavior would begin to change."

Poor healthcare decisions are costing this country dearly. According to the CDC, one third of all adults over 20 years old—about 72 million Americans—aren't just overweight, they're obese. With that additional weight, they carry the additional threat of hypertension, diabetes, coronary heart disease, stroke, osteoarthritis, and just about every other type of costly chronic illness you could file a code for.

Obesity-related healthcare costs in 2000—the latest CDC figures I could find—were estimated at $117 billion.

And, despite decades of warnings—and evidence—about the dire health risks, punitive taxes on tobacco products, and an aggressive coast-to-coast movement to ban smoking in public, more than 43 million Americans still choose to light up or take a dip, at an annual cost of about 443,000 tobacco-related deaths and $97 billion in direct healthcare expenditures. The good news here is that smoking is on the decline.

Scripps' wellness program started in 2006 and now 83% of Scripps' 12,700 employees are enrolled. The program has saved Scripps $2.6 million in medical and pharmacy costs and they're passing some of that savings on to their employees to illustrate the correlation between good physical and financial health, and improved job performance. "What we reward is participation in the process, not outcomes," Buzachero says. "The outcomes will be there eventually."

A comparison with employees who aren't on Scripps' wellness plan is revealing. On average, wellness plan participants have 30% lower medical and pharmacy costs, a 25% reduction in hospital visits, 17% fewer emergency room visits, and 11% fewer prescriptions.

Buzachero says it's important for employees to understand the correlation.

"We try to be as explicit as we can," he says. "We actually tie the cost of the wellness program in with the costs of our employee health plan. We look at that as an aggregate source of money we would spend anyway either fixing you when you aren't well or rewarding you for participating and taking care of things that are going to keep you well. Most people want to be recognized for being well."


John Commins is the human resources and community and rural hospitals editor with HealthLeaders Media. He can be reached at jcommins@healthleadersmedia.com.
Note: You can sign up to receive HealthLeaders Media HR, a free weekly e-newsletter that provides up-to-date information on effective HR strategies, recruitment and compensation, physician staffing, and ongoing organizational development.

Comments are moderated. Please be patient.