How Safeway Is Cutting Health-Care Costs: Here’s an interesting article about what the supermarket chain Safeway is doing about health care costs. First, they start with an important point: the only way to curb health care costs in this country is for us all to get healthier.
Health-care spending has outpaced the rise in all other consumer spending by nearly a factor of three since 1980, increasing to 18% of GDP in 2009 from 9% of GDP. This disturbing trend will not change regardless of who pays these costs – government or the private sector – unless we can find a way to improve the health of our citizens.
And Here’s the elephant in the room that no one likes to talk about:
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). Furthermore, 80% of cardiovascular disease and diabetes is preventable, 60% of cancers are preventable, and more than 90% of obesity is preventable.
it’s true – the most dangerous thing to the U.S. economy right now is a fork. And I say this as someone who eats too much generally, and someone who has struggled with my own weight. As a country, we’re getting bigger and unhealthier by the day. I’ve started to do better – I workout now, eat better, and have lost about 20 pounds – but I’m still a perfect example of the problem. I take two medications for diabetes and one for high cholesterol. And I’m only 37.
Safeway has implemented an incentive program to entice their employees to get healthier.
If they pass all four tests, annual premiums are reduced $780 for individuals and $1,560 for families. Should they fail any or all tests, 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.
At Blend, our group health insurance company recently informed us that our second year premium was going to go up by 35%. it’s simple math – they budgeted $X for costs last year and our employees went over that. In a small company like Blend, you’re one emergency condition away from everyone having to pay substantially more.
So, the trick to keep health insurance costs down in a small business is to keep our employees out of the doctor’s office and the emergency room. How do we do that? Well, that’s what we’re discussing. What decisions can we as a company make to get our employees healthier, both for their own good, and to keep our insurance costs from exploding over the next 10 years?