Chapter 6: The Missing Link: Top Management as Change Agents
They charge smokers a 10 percent monthly premium
Employees can earn “wellness days” off for pursuing healthy lifestyles
To gain acceptance, they offered this plan as on option in its first year, as well as a traditional low deductible and co-insurance plan.
Chapter 7: Beer, Brats, Butterfat: Health, Lifestyle Can Be Managed
Our dysfunctional non-system pays providers to fix people when they’re broken, not to prevent those same health breakdowns.
They require a yearly mini-physical for each employee and their (covered) spouse. A volume deal is cut with the provider to keep costs low ($45 pp). You can opt out of the physical, but you have to pay the full premium for health care.
Because it just makes sense to be serious about the health of your employees, we have adopted may best practices for our wellness and prevention program. The components include:
- An elaborate point system for wellness rewards;
- No paid sick days are allowed because they can be abused, but wellness days offset that need;
- A 10 percent higher premium for smokers;
- Coaching for co-workers who have health issues;
- A free, on-site dietician, nurse practitioner, and chiropractor, who doubles as our ergonomics expert;
- A free primary care doctor whose mission includes prevention, wellness, and chronic disease management;
- Formal programs for chronic diseases;
- Promotion of a fitness culture;
- Tracking health metrics of our co-workers;
- Walking paths around campus;
- An on-site fitness center;
- Sponsorship and participation in walking, running, and biking events.
Chapter 8: Primacy of Care Delivers Big Savings
Cost savings are not the only reason that companies are moving toward on-site medical clinics that they own or control. They do it so they can turn the upside-down delivery of healthcare right-side up. … If you manage the front end of the process, you have a fighting chance to put a tourniquet on the hyper-inflation inflicted by the industry on the nation.
Pyramid Example: Specialists over Primary Doctors over Nurses. Upside down because specialists deliver the highest amount of care in dollars, when it should be nurses.
QuadMed is about what works. Here are some of its important building blocks:
- Doctors on Salary
- All Electronic Records
- Prevention Prominent
- Inexpensive Office Visits
- Medical Home
- If employers don’t have enough critical mass to create on-site medical homes, they should insist that their providers do so.
- Fitness Centers, Employee Assistance Program On-Site
Another huge benefit from having primary doctors dedicated to their patients is their ability and willingness to guide them to the best Centers of Value for other treatments.
Chapter 9: Quality Ratings Elusive, But Essential
Common sense tells us to ferret out which are the best and worst providers. To passively give our healthcare dollars to providers with poor outcomes amounts to dereliction of our duty as leaders of companies. … the important lesson is that you can dig out quality information if you are determined.
Chapter 10: To Reform: Educate, Communicate, Hyper-Communicate
The old plan: $300 deductible and 20 percent co-insurance. The new, high deductible plan nearly eliminated the bi-monthly premium and set up a personal health account.
The company makes second opinions on elective procedures free.
Chapter 11: Silver Bullet for Better Value: Lean Disciplines That Transform
- Seek out lean providers of health care and send your health care business there whenever possible.
- Insist on all three components of value: service, quality, and price.
- Push for changes in the archaic procedure-by-procedure pricing system.
Chapter 12: Generics, Loss Leaders Provide Leverage on Drug Costs
Walmart, Target and Walgreen’s decided to make generic drugs a loss leader; selling dozens of drugs for $1 a week. … Generics bought from any of these three retailers were reimbursed 100 percent.
Other restrictions: Only one ‘blue pill’ per week. No baldness drugs. Cover drugs for smoking cessation, but only for two attempts at quitting.
But, drug costs, which constitute 10-15 percent of a company’s health care bill, can’t be sufficiently controlled through competitive bidding. Use a three-tier system:
- Tier 1 – co-workers pay 20 percent of a generic drug price, or a $5 minimum for a monthly regimen
- Tier 2 – branded drugs for which the PBMs have cut a good deal is 20 percent of price or a $15 minimum
- Tier 3 – unlisted branded drugs are 30 percent of cost with a $30 monthly minimum plus the cost of the difference between the drug and the effective generic.
- Drugs with no generic substitute are covered
The secret, then, of keeping drug costs in line is to exploit the savings in the marketplace wherever they exist. At one-tenth of the company’s tab for health care, drugs have to be managed as aggressively as the other nine-tenths of the bill.
Chapter 13: Better Model for Desperate Small Companies
Small companies pool together to spread risk; because of that, the benefits for an individual, well-performing company, are never improved. In addition, one bad incident can increase rates as much as 50 percent.
- Buy a plan with a high deductible and co-insurance
- Facilitate the use of flexible spending accounts by employees.
- Offset the high deductibles and co-insurance with a Health Reimbursement Account (HRA)
- Hire a Broker
- Put your business out to bid every couple of years
- Be serious about prevention, wellness, and chronic disease management for your employees and their families.
- Pay for an annual mini-physical for your covered adults.
- Look for an insurance plan that makes prevention tests free
- Encourage fitness for all employees
- Look for a well-run primary care clinic to set up a medical home for each family
- Even if your premiums are set for the year, encourage your people to seek value
- Encourage your people to look at the transparency web site put out by your insurer to find the best values for price and quality.
- If you have a drug plan, use a three-tier or four-tier system that encourages the use of less expensive drugs.