Seeking health care control

More firms see incentives, choices lowering costs
MEMPHIS BUSINESS JOURNAL – BY Christopher Sheffield

Caterpillar dealer Thompson Machinery is investing in an Internet-based system that will help employees make cost-effective health care choices, thus reducing their out-of-pocket expenses while helping the company’s bottom line.

It’s an additional investment Thompson officials say will pay off, and one facing many employers trying to combat the rising cost of health care by putting more control into the hands of employees.

The company is introducing its 450 employees, including 110 in Memphis at its regional headquarters and rental center, to a new Web-based portal designed to help them compare costs for medical services and prescriptions, get alerts on discounts and even coupons on commonly used medicines.

The company that developed the system is Brentwood, Tenn.-based Change: Healthcare.
Thompson’s human resources director, Thomas Kilbane, says the company enrolled for the Change: Healthcare service, which it slips right into its self-administered plan, because it creates an easy opportunity to save money.

If an employee can pay $80 for a medical procedure versus $100, that $20 savings means less out-of-pocket expenses, which stretches the employee’s health care dollars. Ultimately, it means less money Thompson Machinery will have to take from profits to fund its insurance program, Kilbane says.

Based on a model Thompson was presented by Change: Healthcare, it expects its annual savings to be in the six figures, Kilbane says.

“It was enough money to make it worth our time and effort to do this,” he says.
Christopher Parks, co-founder and CEO of Change: Healthcare, says using its platform to shop and compare prices, the average annual savings per employee can range from $200 to $400, with some employers reporting savings as high as $1,200 per employee.

Change: Healthcare charges $2 per employee to set up the system, then a monthly fee of $1 per employee. The total number of employees in its system is 92,000.

Parks believes current economic pressures, combined with uncertainties in the new health care reform law, create a tipping point for employers to take actions they likely needed to implement long ago.

“More employers this year and next will shift the benefit plan design where employees will have a great incentive to share the costs,” Parks says.

Cristie Upshaw Travis, CEO of Memphis Business Group on Health, says financial incentives are among the most effective ways for employers to drive down costs. Memphis Business Group on Health has 20 member companies that are self-insured with about 400,000 covered lives in the Memphis metro area.

Memphis Business Group on Health is a not-for-profit formed 25 years ago to provide companies with best practices and collaboration on health and wellness issues.

Financial incentives can take many forms, Travis says. For example, FedEx Corp., a member of Memphis Business Group on Health, has begun paying employees who are pre-disposed to diabetes $50 a year if they get at least one retinal eye exam and one A1c test that monitors glucose levels.

Since implementing the program 3 years ago, FedEx has seen a measurable decrease in emergency room visits and improvements on A1c lab results, Travis says.

A program implemented by First Horizon National Corp. in August allows employees to earn up to $500 a year by staying active and making healthier choices. Employees, who pay $2.50 per pay period to participate, wear a pedometer that tracks daily activity and can have key body metrics checked at designated kiosks.

Employers are increasingly coming to understand it’s in their financial best interest to help employees make healthy choices, since results could mean fewer absences and increased productivity, Travis says.

Parks, a health care administrator before starting Change: Healthcare three years ago, says comparing costs gives more control in the health care process.

“We’re not saying don’t go to the emergency room, but we can let you know when you spend a dollar if it is spent wisely,” he says.

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http://memphis.bizjournals.com/memphis/stories/2010/04/26/story4.html?b=1272254400^3235791
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