Medical costs for employees both active and retired are putting an unnecessary burden on organizations in the United States. Organizations have traditionally relied on medical organizations to keep their employees “healthy”. Unfortunately medical organizations have not delivered healthy employees and reduced medical costs.
I believe it is important for today’s businesses to learn options that are being used by self-insured organizations such as Whole Foods Market and GEICO and non-profit organizations such as EarthSave to create healthy employees and minimize health care costs.
In 2005, Starbucks spent more on health care than the raw materials to make coffee.
In 2005, Starbucks spent more on health care than the raw materials to make coffee. In 2008, General Motors spent more on health care than the steel for their automobiles. The percentage of total compensation devoted to health benefits has increased since the 1960s. From 2001 to 2007 there was an increase of 78% compared to an inflation rate of 17%. This “investment” might be somewhat justified if the workforce was getting healthier. Unfortunately, the opposite is occurring with an increasing amount of chronic diseases and associated suffering. Predictions are for these trends to continue.
Today all sectors, households, businesses and government play a role in the provision, funding and consumption of health care. Since medical organizations show no promise of delivering reduced rates and improving the health of workers, solutions must come from elsewhere. Government’s efforts have been ineffective and worse have added complexity. Individual’s in households follow the recommendations of medical organizations only to find they are getting sicker while taking more medications and undergoing more procedures. Most businesses are still continuing old practices and seeing the same results. However, solutions are beginning to emerge from within the business sector that offers hope for lowered costs and healthier workers.
Self-insured organizations such as Whole Foods Market and GEICO and non-profit organizations such as EarthSave have developed, piloted and deployed programs that are improving the health of individuals and reducing health care costs. Their efforts are based on the growing body of evidence showing that chronic diseases and their consequences can be slowed, stabilized, reversed, and often cured. This creates a tremendous opportunity for reducing overhead since chronic conditions accounts for up to 80% of health care costs. To take advantage of this opportunity businesses need to consider changing their policies and programs.
Programs for Human Resource Leaders
I believe that properly designed and implemented policies and programs within businesses can help reduce medical costs and improve employee health. My programs for businesses interested in controlling their medical costs are designed with three goals in mind:
- To provide a broad understanding of the challenges involved in reducing health care costs
- To present a range of options
- To improve the health of those in attendance
My presentations I review the results of several programs that are being used by businesses to control costs. I demonstrate the short term and long-term savings that are possible if programs focus on the primary and secondary prevention of significant chronic conditions (i.e. arterial disease, diabetes, obesity). For instance by-pass surgery, arterial stent placement, and gastric surgeries are about $100,000, $50,000 and $20,000 respectively for each procedure. Pharmacy costs account for about 15% of health care costs and the majority of those costs are on chronic conditions.
I prefer to tailor my programs to the needs of the audience. I also can provide follow-up programs and support if desired.
Trained as a chemical engineer with board certification in Family Medicine, I practiced medicine for over 30 years in a large multispecialty organization. Further, I qualified as a Certified Physician Executive and am certified in quality improvement by the Health Care Delivery Research Institute at Intermountain Health Care. My broad training and experience allows me to bring a unique and valuable perspective to my presentations. I weave together concepts from biologic and clinical science, quality improvement, sustainability and change in complex systems. They can be particularly useful in jumpstarting further discussions leading to improved policy and programs.