Good Health, Lower Costs for Fortune 500 Company
I will agree to disagree with people who believe Americans have a "right" to health care. In my humble opinion, there is no law or clause that entitles anyone to health care provided by the government.
(Yes, life, liberty, and the pursuit of happiness are known as inalienable rights. The argument that health care is necessary to life is interesting but problematic. Do you also have the "right" to demand other things necessary for day-to-day living such as food, a roof over your head, or oxygen?)
Here's the issue when anything is free. There is no limit on the extent to which you can use it, thus creating a system ripe for abuse. The result is catastrophic and costly. How is such a situation avoided?
Safeway, a Fortune 500 company and North America's third largest supermarket chain, may have hit upon a solution. Health care costs are skyrocketing and have reached 18% of GDP this year. Wrangling over whether the private or public sector should foot the bill does nothing to lower costs, a bipartisan objective. Coming up with incentives to be healthier does.
Steven Burd, CEO of Safeway, has done just that. Four years ago, the company launched a health insurance plan based on the following findings: 70 percent of health care costs are the direct result of behavior; and 74 percent of costs are the result of cardiovascular disease, cancer, diabetes, and obesity. On top of this, 80 percent of cardiovascular disease and diabetes is preventable, 60 percent of cancers are preventable, and over 90 percent of obesity is preventable.
Considering how a large percentage of health care problems and costs are the direct result of behavior, Safeway's insurance plan sets its employees' premiums according to each employee's behavior. These are based on evaluations of tobacco usage, healthy weight, blood pressure, and cholesterol. If employees are rated well on these measures, they receive premium discounts- up to $780 for individuals and $1,560 for families.
Insuring a tobacco user for a year costs $1,400. If you don't use tobacco, Safeway gives you a $312 reward a year.
Most American companies' per-capita health care costs have increased 38 percent in the past four years while Safeway's has remained flat. Burd estimates that if a similar plan was adopted at the national level, the country's health care bill could be reduced by 40 percent.
Safeway's Healthy Measures Employee Insurance Plan returns personal responsibility at the forefront of health insurance. It is the model plan that embodies the independent American spirit- and actually works.
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