“Helping employees
improve their health is right for the company’s bottom line and is doing right
by our employees. Healthier employees
are happier, demonstrate less absenteeism and presenteesism,
and are more productive. This is a win
for everyone involved.” Quoted from John
Torinus, Jr., in The Grassroots
Healthcare Revolution; he is retired CEO and current board chair of Serigraph, Inc.,
a mid-sized Wisconsin company with about 500 employees in the USA.
In my earlier posts in
this series I have written primarily from the perspective of what primary care
physicians can do to not only improve the health of their patients while
reducing total costs of care yet also
reclaim their right to practice in a non-frustrating environment with a limited
number of patient visits per day. Torinus approaches improving health care from
the perspective of a business leader faced with rising health care costs. Here
I will quote and paraphrase from Torinus’ book and, since I basically agree
with his recommendations, will amplify with some of my own thoughts.
He argues that company
CEOs must make health care a strategic priority since it is one of the top three
costs for any company. Healthcare costs can make the company noncompetitive if
not managed aggressively. However, strategic priority to him also means it is
essential for the company to attend in a proactive manner to the health and
wellness of its employees, not just be the provider of an insurance plan.
CEOs need to think of
the long term for their companies and therefore for their employees. The
company and the employee together spend about $16,000 per year for a family for
insurance today. An employee who works
for a company for 25-40 years represents an insurance expenditure over a
lifetime career that could be as much as $400,000 to $640,000 in today’s
dollars. This drives home the point that
it obviously only makes sense to have a long term view of employee health beginning
with an aggressive approach to maintain wellness, actively reduce risk factors
and manage disease as it occurs.
He observes that the current
health care system focuses on specialty care whereas it needs to focus on the
care recipient with high quality primary care – the
patient/consumer/employee. But to be
effective, the patient/consumer/employee needs to be engaged. The current healthcare system disengages the
patient – it removes responsibility because the patient is not the customer
of the doctor.
In his company,
expenses were rising to double digits by 2003 but with their new plan in place,
it dropped to 2% or less per year.
Torinus’ “prescription” for all companies (and what
his company initiated beginning in 2004) follows: First, every company, including small
companies, should self-insure with an added stop-loss catastrophic policy. Second, employees should be offered only a consumer
directed healthcare policy (CDHP), in essence a high
deductible plan (often about $2500) with either an associated health savings
account (HSA) or a health related account (HRA.) The company should prefund the account with
an amount (often about $1500) that the individual can use for any health care
needs with the assumption that since it is now the individual’s money, he or
she will spend it more wisely – employee/patient engagement.
Third, the company
should insist that each provider have price transparency. Since that’s often difficult
to obtain Serigraph uses various companies like Alithias Inc.
to provide that for them so that they can compare one provider to another. For example, they determine the all-inclusive
(gastroenterologist, anesthesiologist and facility fee) price along with
quality data of colonoscopies at the nearest five centers and then rank them. The
employee or family member who needs the colonoscopy is told that, for example,
the company sees it as appropriate preventive care and so will cover the cost,
in this case up to $1,500. [His book
appeared before the ACA became law so colonoscopy would be covered now by the
insurance component but the principle is still valid.] This is an amount that
will pay for say, four of the five local centers; but if he or she selects a
provider that charges more, they are on the hook for the remainder.
Fourth, if the company is large enough, it
should provide an on-site primary care clinic at no cost to the
individual. At Serigraph, the clinic
includes a concierge-type physician (meaning that the physician is salaried, has
a low number of patients under care and gives extensive time and energy to each
employee/family member patient consistent with some of my previous posts)
plus a nurse practitioner, a health coach, a dietician, and a
chiropractor. If the company is too
small to justify a full-fledged clinic then the company can pay the retainer
for a nearby direct primary care/membership/concierge physician who works with
others such as the health coach. Fifth, the
clinic, with special attention by the health coach, gives all employees a
health risk assessment annually and then works one-on-one with each employee
(and family member) at no cost to maintain wellness and health including the
use of behavioral change programs around diet, nutrition, exercise, stress
management and smoking cessation.
Sixth, there is very intense management of
chronic diseases by the clinic staff and coordination of specialist visits when
needed. Seventh, Serigraph uses what Torinus
calls Centers of Value for procedures beyond those that are done by the primary
care physician. These are doctors/institutions that have outstanding quality
records yet a competitive price for, say, a knee replacement. Serigraph gives
their employees $2,000 toward the deductible or totally covers the deductible
for the surgery when they make use of these Centers of Value. Seventh, his company gives (and he recommends
others do likewise) generic drugs for free and all of the above prevention and
wellness programs are supplied free of charge.
Finally, the company makes free counseling available for developing
advanced directives and in the event that an individual requires end of life
care, hospice is available free of charge.
I notice that his company spends considerably on
extensive/comprehensive primary care including wellness maintenance, proactive
prevention and chronic care management but it is rewarded in return with lower total costs and healthier workers.
Given that healthcare has become a company strategic
priority, then it needs to be managed and that requires data. Hence, he urges
all companies to develop health-related management dashboards including both a
financial dashboard (how much is the company spending) and a health dashboard
(how many individuals in the company have uncontrolled blood pressure,
uncontrolled asthma, uncontrolled cholesterol, have not had appropriate
mammography or colonoscopy, etc. – all information collected from the clinic in
an unidentified manner to protect individual privacy).
These approaches are
based on fundamental principles including individual responsibility; market
place discipline – installing consumerism, steering business to the best
quality and price (“do good work and you get our business”); proactive care –
maintain employees’ health and wellness and give extensive care to those with
chronic illnesses; and sound management – putting those who pay, i.e., the
employer and the employee, in charge.
Torinus suggests there
are multiple rewards for following this basic approach (I added number 2 since
he implied but did not write it.)
1)
The reward for business is a healthier
work force and more affordable healthcare expenditures.
2)
The reward for individuals is more
health and wellness, less illness and fewer dollars spent.
3)
The reward for high value providers is
more business.
4)
The reward for entrepreneurs comes if
they innovate with better care provided at lower cost
5) There
could be a reward for tax payers - if
government (federal, state and local) were to utilize these approaches
Sound advice. Your thoughts?
The next post will
delve into company wellness programs.
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