Personalities: Decaffeinating Healthcare Costs

Few brands are more recognizable than Starbucks. At last count, the coffee purveyor operated 6,010 stores worldwide, and its 2006 net revenues were $7.8 billion. Unlike some large corporations, Seattle-based Starbucks Corp. offers health benefits to employees who work at least 20 hours per week. Still, rising healthcare costs are beginning to give Starbucks the jitters. Kelley Hardin, director of benefits, says her company has spent the past several years advocating solutions to make health coverage more affordable.

On collaborating with healthcare organizations: We have worked with Aetna and Virginia Mason Medical Center to improve the quality of care for our employees and reduce costs. All three parties understood the importance of reducing waste in healthcare delivery—this led to strategies that let Virginia Mason receive more appropriate reimbursement for cost-effective treatment.

On the challenges large employers face: What made the collaboration with Virginia Mason work was a willingness by the hospital’s leadership to hear from us directly as to what we needed for our partners (Starbucks’ term for employees) and as a company. Companies often pay the majority of the bill but are excluded from the conversation about healthcare delivery. The rising costs have prompted us to engage in the national dialogue and work with others to find solutions.

On healthcare consumerism: On average Starbucks pays approximately 75 cents out of every dollar spent for our partners on healthcare. The partner contribution to participate in our most economical plan—for routine care—is $5.45 a week. But consumers overall need to become engaged in their care. We’re working to provide them with tools and information so they can make better decisions. We provide access to online health information and health risk assessments so partners and their dependents can become more engaged in their health.

On the role of corporate advocacy: For the past several years, we have focused our efforts on building public awareness about the seriousness of escalating healthcare costs and the need for innovative solutions. It’s through these efforts, as well as our wellness and shared responsibility strategies, that we seek to continue to provide access to affordable coverage for our partners.

—Rick Johnson