The future of healthcare is pretty close to the top of the nation’s agenda these days. In fact, as I write this, President Obama is addressing the American Medical Association in Chicago (as an aside, several people I follow on Twitter are doing a great job providing real-time updates on the speech).
One of the biggest challenges in mapping out healthcare reform is to determine what the role of employers should be going forward. The fact that employers provide health insurance at all is, for the most part, an accident of history. But whatever its origin, the system we have is very firmly rooted; it’s far more likely that the system will evolve as opposed to being dismantled with something completely new put in its place.
So what should employers be doing and thinking about as the debate evolves? In his address, the president pointed to Safeway as a model:
Building a health care system that promotes prevention rather than just managing diseases will require all of us to do our part. It will take doctors telling us what risk factors we should avoid and what preventive measures we should pursue. And it will take employers following the example of places like Safeway that is rewarding workers for taking better care of their health while reducing health care costs in the process. If you’re one of the three quarters of Safeway workers enrolled in their “Healthy Measures” program, you can get screened for problems like high cholesterol or high blood pressure. And if you score well, you can pay lower premiums. It’s a program that has helped Safeway cut health care spending by 13% and workers save over 20% on their premiums. And we are open to doing more to help employers adopt and expand programs like this one.
(A full transcript of the speech is here. You can also read an op-ed by Safeway’s CEO that discusses the company’s health and wellness initiatives).
Is it possible that, in the future, employees will not necessarily expect employers to provide health insurance but, rather, to provide innovative programs to help them stay healthy?
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fran melmed
June 15, 2009
david, interesting post. i think it’s actually not going to be an either/or. just as employees already look to their employers for health benefits (and more), they are increasingly expecting wellness-related services to also be available. any company that wishes to remain competitive would do well to add to their current wellness services, which typically only include an EAP, coverage of preventive care, and a smattering of incentives related to tobacco cessation and the like.
David Janus
June 15, 2009
Good points. But I think that employers would be smart to add to current wellness offerings not only to remain competitive, but also to get ahead of the curve, assuming that the model of employer based health insurance will likely change from what we are used to today. I think it’s quite likely that those changes may make it more difficult for employers to use health insurance as a differentiating factor in their total rewards offerings.
tomdaly
June 15, 2009
Correction to my previous post. It was not Jesse James — http://en.wikipedia.org/wiki/Willie_Sutton.
tomdaly
June 15, 2009
A revision of my original post – which I guess did not go through.
I loved when you described employer’s involvement in health insurance as “an accident of history.” As a broker, I know many who would love the excuse to get out of the business. The concern seems to lie in what the alternative will be.
Businesses/Employers will do what they need to do to stay in business. Part of that is attracting and retaining productive employees. I think the Federal Government will either encourage or require employers to remain involved in providing health insurance for their employees for the same reason that Willie Sutton (see above: mistakenly said Jesse James in original post) robbed banks – because that’s where the money is. There is no way to pay for a public health option other than to charge those who are currently paying (taxes and insurance) more. Businesses/Employers are not only a source of money via employment taxes. They are the funnel through which employee money flows.
Wellness programs, unless they are required, will need to justify themselves based on whatever return on investment they can demonstrate. Without a tie to self-funded or experience rated medical insurance, that savings potential would be lost.
Regarding the Safeway reference – see http://cli.gs/Z96jhY from the American Spectator (not exactly non-partisan; but, seems to make sense).
David Janus
June 16, 2009
Your points are well taken, Tom.