Skip to comments.How Safeway Is Cutting Health-Care Costs
Posted on 06/12/2009 10:24:38 AM PDT by Ooh-Ah
Market-based solutions can reduce the national health-care bill by 40%.
Effective health-care reform must meet two objectives: 1) It must secure coverage for all Americans, and 2) it must dramatically lower the cost of health care. 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. Failure to do so will make American companies less competitive in the global marketplace, increase taxes, and undermine our economy.
At Safeway we believe that well-designed health-care reform, utilizing market-based solutions, can ultimately reduce our nation's health-care bill by 40%. The key to achieving these savings is health-care plans that reward healthy behavior. As a self-insured employer, Safeway designed just such a plan in 2005 and has made continuous improvements each year. The results have been remarkable. During this four-year period, we have kept our per capita health-care costs flat (that includes both the employee and the employer portion), while most American companies' costs have increased 38% over the same four years.
Safeway's plan capitalizes on two key insights gained in 2005. 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.
(Excerpt) Read more at online.wsj.com ...
Health stamps are the answer. The infrastructure is already in place.
“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.”
But let the government suggest this and the crap hits the fan.
And probably 98% of AIDS is preventable.
Good points in general, but the behavioral issue is tricky. How one gets by this is the tough part. I’m a soldier and I have strict height/weight and physical fitness standards. I have to pass a semi-annual physical training test and I must keep my body fat percentage below a certain level depending on my age. I have a urinalysis test at least twice a year checking my system for illegal drugs. Yes, I do all this because I’m ordered to, but the government is paying my salary. The way I see it they get to dictate the standards.
If a private insurance company and or employer wanted to do this- would there be lawsuits? Can an employer dictate how much you can weigh and how in-shape you need to be? I say if they’re paying for your healthcare benefits and paying your salary then they have this right. They should be able to choose healthy people to work for them.
Yes, I know - what about discrimination? What about the handicapped? What if your child is born with a birth defect...I get it. The military certainly discriminates. Why can’t other industries?
The article makes good points about prevention.
get government completely out of the system
Safeway is using a carrot. Government is all stick.
I think the difference is having a choice and having the government force it down your throat.
So, is safeway going to stop selling all the crap that aide’s in the development of obesity? Are they going to only sell heart healthy foods? I doubt it.
The difference is that covered employees get rebates of their premiums for being Good Kids, not denied coverage because they are Bad Kids.
We’re all going to die someday no matter what we do. These statistics make it look like we can live forever if we just do, or don’t do some things.
Some do it now. The ones I'm familiar with charge less for insurance if you choose to, basically, stay in shape. They charge you more if you decide to be a couch potato. I don't have a problem with that.
So did they keep the fat people, or fire them?
Of course they would.
Americans have been conditioned to believe that their medical care should be paid for by someone else. When it isn't, something's not right with the universe.
Try talking to your doctor about paying him in cash some time. You'll find that the prices are much different.
When I was twenty-five and in perfect health, that's exactly what I did. I worked for an employer who offered a cafeteria plan, and you got back any unspent benefit dollars. I took the catastrophic plan in case I got hit by a truck, and didn't see a doctor for several years. Now that I'm older and less healthy, I have the Real Insurance.
“Try talking to your doctor about paying him in cash some time. You’ll find that the prices are much different. “
Doctors may be one story, but hospitals are another. When my wife had her stroke I saw before insurance bills of something like $80K and settlements with insurance of around $20K. If I had not had insurance, we would have been well past broke.
Did you read the whole article? People who choose to live unhealthy lifestyles pay more for insurance, but nobody got fired and nobody got denied coverage.
They’re not dictating employee behavior, just charging less for healthier people, and letting a third party do most of the assessing without actually sharing the full results with the company (they only get the pass-fail results not the actual numbers). It’s really how insurance (all insurance) should be, if it’s provable you take more risks you should pay more money.
that still seems to put the employer into the Lifestyle Nanny business, which I am not a fan of....
Surprised that Safeway is getting away with this. I understood that their stores were all unionized.
“Did you read the whole article? People who choose to live unhealthy lifestyles pay more for insurance, but nobody got fired and nobody got denied coverage.”
I dunno, most of the employees at safeways I frequent seem younger/healthier than what I saw there a few years ago.
How many of the specified illnesses are preventable as opposed to delayable? We are all going to die, and unless you are eaten by a bear or keel over from a heart attack away from any medical care your final treatment will likely be very expensive as medicine tries to delay the inevitable. Now, if a company can delay those costs until after retirement or the age when the employee enters Medicare, then the employer has saved all that money. However, as a total across the country we haven't because that just means that more of those costs (and more years of life if the person is healthier at 65) are shifted to Medicare. It doesn't avoid the ultimate decision "treat or don't treat" which is at the core of rationing of health care.
Some of the actuarial calculations of how old you live go into the decisions on whether smoking should remain legal. If everyone stopped smoking, Social Security would go bankrupt even more quickly as people lived longer. Similarly for Medicare as people lived more years under it getting the typical problems of old age before they finally die of something expensive rather than just dying early from lung cancer and not incurring 10 years of other treatments.
Yet Safeway managed to pay a local person who had worked for them less than a year as a checker-—with the scanners—who is about 100 ## overweight for a ‘carpal tunnel’ problem, which I swear was much more the result of his constant hand to mouth movements, which keep him very obese.
He is less than 40 years old, and he claims he is ‘disabled for life’ with less than a year of working as a grocery checker.
Another crock of crap, and Safeway bought into his delusions.
I've found that the hospital is *always* willing to negotiate. "How much can you knock off if I write you a check right now", usually is an excellent place to start.
Getting healthier probably helps make them look younger, I look younger at almost 40 than I did at 35, and there being significantly less of me has a lot to do with it. Their data says if they pass all 4 tests their rates drop $780 a year, plus they get $312 a year for not smoking. An extra thousand bucks a year is good incentive to get healthier.
That is good to know. I’ve wondered myself if the solution to healthcare costs is to actually go cash only for everyone.
Did Safeway buy into it or did their lawyer say it’ll be cheaper in the long run to pretend the guy is right.
You are correct.. I want the govt OR private industry in the “Lifestyle Nanny business”.
My business what goes on in my life after work. If I want a burger or a smoke.. I WILL not tolerate being told I cant have it. If need be I will lie but I will not be told what to do by my govt or my employer when it comes to what I eat.
You are correct, safeway is unionized and I am amazed they are letting this fly.
If health care is so expensive go after the root cause (Like a Tylenol costing 400 bucks in the emergency room). That and STOP giving free care to illegals.
I had the displeasure of working for them many years ago and there was a reason we called it “Slaveway”. This kinda stuff adds new meaning to it.
I find this kind of creepy. Maybe Safeway’s next savings step will be to “Logan’s Run” all employees over 40.
From the article:
The Healthy Measures program currently applies only to our nonunion work force. While we have numerous health and wellness provisions in our union contracts, we are working with union leaders like Joe Hansen of the United Food and Commercial Workers to incorporate healthy measures provisions in our union work force as well.
Are you saying regardless of a person’s habits, everyone should pay the same for health care? If you go home and smoke and eat burgers that’s fine. You are 5 foot 10 and weigh 250 pounds (not saying you do, just an example) and I’m 5 foot 10 and weigh 175 pounds and don’t smoke - we should both pay the same amount for coverage? Does that make sense to you?
This could simply be market-forces at work. If I'm overweight, and paying more for my insurance because of my weight - but I move to a competitor, do the same job, at the same pay rate - but have LOWER insurance premiums because EVERYONE pays the same rate, my take home pay may go up every paycheck.
And the other thought to bear in mind that for a great many people, a job like Safeway is a transitional job they hold until they find something better, either by gaining experience, education or simply perseverance.
No so tricky if you're paying for health care out of your own pocket.
If you see that your bad behavior is raising your health expenses, you tend to cut back on that behavior.
When you're getting health care for free, who cares? Live it up.
“Are you saying regardless of a persons habits, everyone should pay the same for health care? If you go home and smoke and eat burgers thats fine. You are 5 foot 10 and weigh 250 pounds (not saying you do, just an example) and Im 5 foot 10 and weigh 175 pounds and dont smoke - we should both pay the same amount for coverage? Does that make sense to you?”
I have spent a lot of time thinking about what is fair when it comes to healthcare, which for better or worse, the government is doing as well. No easy answers for sure.
Rationale behind it is that she needs to bill $300, to get $75 from the insurance company, and have a staff just to deal with all of the insurance paperwork, to boot.
Why not cut insurance out of the deal completely? At least for "routine maintenance", I say that it's an excellent idea.
BO likely would disagree, though.
Are you going to include all “habits?” What about sleeping around, drinking alcohol, homosexuality, risky hobbies, driving a motorcycle, not wearing sun screen, putting butter on your toast, stress, drinking large amounts of soda, not eating “enough” fruits and veggies,......where does it end? Who gets to measure the risk factors of your lifestyle choices? Slippery slopes are just that, slippery.
The way to get government and private industry out of the Lifestyle Nanny business is to eliminate this idiotic system of having medical care paid for by third parties.
Costs will never come down until the consumer is directly exposed to the cost.
If you drive a rental, you don’t mind hitting the pot holes and putting in the cheapest gas you can find.
If it is your car, you take care of it and shop for the best bargain when it is time for repairs.
Right now, health care is a rental model. The incentive is to spend the most for your monthly premium.
Put the entire country on a health care savings plan and watch the %GNP stabilize and begin to trend down.
“That is good to know. Ive wondered myself if the solution to healthcare costs is to actually go cash only for everyone.”
It would definitely curb the increase in cost.
For most people it is not the food but the quantity. They overeat. It is behavior based on ignorance that leads to excessive costs. The same behavior often insists that someone else pay for the care. Alter the behavior and see reduced costs. I can stomach a national health care plan only if it rewards and punishes good and bad health behavior. Of course it won't do it to my satisfaction. It will likely follow the familiar pattern of other government programs (War on Poverty). If it were as fair as the military I would be satisfied.
Most diseases can be managed inexpensively but people demand more expensive care.
Coronary artery disease. Treatment: exercise, weight loss, cutting back on the greasy stuff, adding some greens to the diet, all free. Plus a daily ASA and a $4/month anticholesterol medicine would be adequate treatment for 90% of people.
High blood pressure. Exercise, cut back on the greasy stuff and add some greens to the diet. $4/month prescription again would take care of 90% of people.
Diabetes type II. Exercise, cut back on the carbs and greasy stuff. $4/month prescription plus a blood glucose machine and supplies. This is all that about 90% need.
Cancer. Exercise, cut back on the greasy stuff, add some greens to the diet. Don’t smoke. Colonoscope age 50. PAP screens for the women and you would probably avoid 25-50% of cancers.
We really don’t need the government to dump trillions of dollars into health care to fix the problem. It will only make the problem bigger and costs will go up.
I love my HSA, which is just an employer-subsidized version of a voucher system (or “health stamps”), combined with a high-deductible health plan. My wife and I have accumulated, over the past three years, a tidy sum in our HSA.
No I am saying that I am healthy, 43 year old, normal weight, no health issues and i JUST DO NOT BUY the stories that eating a cheeseburger or smoking a ciggarette will kill you on contact. I want the ability to CHOOSE what I do with my life and not have some Health Nazi telling me how to live it.
If I want fast food one day and tofu the next, that’s MY business not my employers or the governments.
Leave this lifestyle garbage out of health care, kick out the illegals who we ALL end up paying for, and attack the greed in the system already.
The YES, I would be willing to pay more for my “evil” choices. I suspect the more that I would be would be a WHOLE lot less than what it is now.
And to think.. years and years of people eating what they want, smoking what they want.. and no one seemed to need all this “paranoia-care” like we do today. Seems the more health care people have the sicker they are.
Yup, thats my fear as well. First they took our cigarettes, next our food, then who knows..
After watching the PUSH for all this health care over the years, I keep thinking of how the “police” of society will now include your doctor.
Obviously you can’t make a list of habits. However, you can have consequences that aren’t covered. For example - you break your leg sky diving - either not covered, or you have to pay a steep deductable. You wreck your car while drunk driving- not covered at all. Any sexually transmitted disease? I would lean toward not covered. If you have high bloodpressure and/or diabetes and you’re 50 pounds overweight - Not covered. I would cover your gym membership though.
You can have plenty of bad habits that can be mitigated. I ate at McDonalds yesterday. Had a big cheeseburger and fries (did have a diet coke though :-)). Bad yes. But today I ran 7 miles (I’m training for a marathon). So did I mitigate my risk?
Other than certain inherited health problems, people control their own health destinies. Actions have consequences. TANSTAAFL.
I’m saying treat or don’t treat the result. I’m not for banning behavior. But if you show up in the clinic with a sexually transmitted disease - I’m saying I don’t care how you got it, I’m just not going to cover it. Same with drinking. Drink all you want, but when you show with cirosis (sp?) of the liver - tough titty. If you show up 50 pounds overweight and are now diabetic - save up for your own insulin.
To summarize, do what you want, just be prepared to accept the consequences.
I have studied this for the past 30 years as a community-based health planner and later as a hospital planner. I have looked at the impact of weight on health care costs and could not find any correlation in that one factor. Children with congenital heart problems (premies that survived) were at the top of the list for costs. Some of the thinnest people I know have horrible cholesterol/triglyceride and blood pressure problems - heredity played the biggest part for a lot them. I am overweight yet have no problem with blood pressure, cholesterol, blood sugar. At 61 I was diagnosed with breast cancer after a routine annual mammogram (very small tumor caught early with the lowest score for recurrence). My Gyn said that my weight is a risk factor - to which I responded, tell that to Cheryl Crow, Jacqueline Smith, Melissa Etheridge, et.al. Detecting it early is the key - there was simply nothing that I could have done to prevent BC, but I had total control over catching it early. Elizabeth Edwards admits that she went four years in between mammograms when her BC was caught. No excuse for that - hell to pay. So, should I get a break for doing everything right on the early detection and yet still got the disease? I am very concerned about the OBAMA crusaders that will so micro-manage our lives once they get their hands on our medical insurance.
You know what send 20,000 children to the ER each year? Little League Base Ball. Look out America!
Are they going to only sell heart healthy foods? I doubt it.
For most people it is not the food but the quantity....snip
Try finding a breath freshener or gum *without* phenylalanie - can we say across-the-board drugging of the masses? Phenylalanine is structurally closely related to dopamine, epinephrine (adrenaline) and tyrosine. OUR KIDS DON’T HAVE ADD or ADHD - they are having it given to them. Try finding a teenager who doesn’t chew through a pack of Orbit a day. Their teeth don’t decay, but they can’t really focus on anything, either. Or else they feel really hyper and stressed. Nutrasweet/Aspartame is finding its way into everything.
When I was little, Heinz Ketchup *didn’t* have High Fructose Corn Syrup in it....why does it now? Why does EVERYTHING have it in it, yet, no one is connecting the dots that diabetes is on the rise (and not just in the obese) as well as pancreatic cancer?
Fluoride intentionally put in our water? Look that one up - that’s a GOOD one - across the board “prozac” plus the cause of several auto-immune and degenerative diseases. Has nothing to do with good teeth, everything to do with $$$ and control.
Oh, and your 25 neighbors on birth control pills and anti-depressants? RIGHT BACK into the water system and not filtered out. Gee - we wonder why the fish in our rivers are being born with both sets of sex organs, but no one is making the connection between the rise in both breast cancer and prostate cancer.
Save yourself the effort of buying bottled water - the chemicals in the plastic bottles cause the same cancers with the release of xeno-estrogens. And if the water isn’t purified by reverse osmosis, that pesky fluoride is still in there, too.
(I could go on an on.)
The same companies that make the chemicals that poison us are the same companies that come up with the “medicines” to manage the afflictions they cause.
“THEY” get us coming and going. And I truly believe this has been carefully and intentionally orchestrated.
Getting on a treadmill and abstaining from McDonald’s is just a small piece of the pie.
So when are they going to go to genetic testing? ;-)