“Helping employees improve their health is right for the company’s bottom line and is doing right by our employees. Healthier employees are happier, demonstrate less absenteeism and presenteeism, and are more productive. This is a win for everyone involved.” Quoted from John Torinus, Jr., in The Grassroots Healthcare Revolution; he is retired CEO and current board chair of Serigraph, Inc., a mid-sized Wisconsin company with about 500 employees.
In my earlier posts in this series, I have written primarily from the perspective of what primary care physicians can do to improve their patients’ health and reduce total costs of care. Concurrently, they can reclaim their right to practice in a non-frustrating environment with a limited number of daily patient visits. Torinus approaches improving health care from the perspective of a business leader faced with rising health care costs. Here I will quote and paraphrase from Torinus’ book and, since I basically agree with his recommendations, will amplify with some of my own thoughts.
He argues that company CEOs must make health care a strategic priority since it is one of the top three costs for any company. In addition, healthcare costs can make the company noncompetitive if not managed aggressively. However, strategic priority to him also means it is essential for the company to attend proactively to the health and wellness of its employees, not just be the provider of an insurance plan.
CEOs need to consider the long term for their companies and employees. The company and the employee together spend about $16,000 per year for a family for insurance as of his 2014 book publication, obviously much greater than that today! Using his $16,000 estimate, an employee who works for a company for 25–40 years represents an insurance expenditure over a lifetime career that could be as much as $400,000 to $640,000 in 2014 dollars. This drives home the point that it only makes sense to have a long-term view of employee health, beginning with an aggressive approach to maintain wellness, actively reduce risk factors and manage disease as it occurs.
Some repetition here is worthwhile. Don’t just focus on treating disease but prevent disease and maintain wellness. Of course, that will cost some money now, but the end result will be a substantial decrease in total costs over the years. And, don’t just cover disease care but arrange for each employee and family member to have outstanding primary care to avoid unnecessary excessive specialty care.
He observes that the current health care system focuses on specialty care, whereas it needs to focus on the care recipient with high-quality primary care — the patient/consumer/employee. But to be effective, the patient/consumer/employee needs to be engaged. Instead, the current healthcare system disengages the patient — it removes responsibility because the patient is not the doctor’s customer.
In his company, expenses were rising to double digits by 2003, but with their new plan in place, it dropped to 2% or less per year.
Torinus’ “prescription” for all companies (and what his company initiated beginning in 2004) follows:
First, every company, including small companies, should self-insure with an added stop-loss catastrophic policy.
Second, employees should be offered only a consumer-directed healthcare policy (CDHP), in essence, a moderately high deductible plan (often about $2500) with either an associated health savings account (HSA) or a health-related account (HRA.) The company should prefund the account with an amount (often about $1500 or more) that the individual can use for any health care needs with the assumption that since it is now the individual’s money, he or she will spend it more wisely — employee/patient engagement.
Third, the company should insist that each provider have price transparency. Since that’s often difficult to obtain, Serigraph uses various companies like Alithias Inc to provide that for them so that they can compare one provider to another. For example, they determine the price of the all-inclusive (gastroenterologist, anesthesiologist, and facility fee) along with quality data of colonoscopies at the nearest five centers and then rank them. The employee or family member who needs the colonoscopy is told that, for example, the company sees it as appropriate preventive care and so will cover the cost, in this case up to $1,500. [His book appeared before the ACA became law, so the insurance component would cover colonoscopy now, but the principle is still valid.] This is an amount that will pay for, say, four of the five local centers, but if he or she selects a provider that charges more, they are on the hook for the remainder.
Fourth, if the company is large enough, it should provide an on-site primary care clinic at no cost to the individual. For example, at Serigraph, the clinic includes a concierge-type physician (meaning that the physician is salaried, has a low number of patients under care, and gives ample time and energy to each employee/family member patient, consistent with some of my previous posts) plus a nurse practitioner, a health coach, a dietician, and a chiropractor. On the other hand, if the company is too small to justify a full-fledged clinic, then the company can pay the retainer for a nearby direct primary care/membership/concierge physician who works with others, such as a health coach.
Fifth, the clinic, with particular attention by the health coach, gives all employees a health risk assessment annually and then works one-on-one with each employee (and family member) at no cost to maintain wellness and health, including the use of behavioral change programs around diet, nutrition, exercise, stress management, and smoking cessation.
Sixth, the clinic staff gives very intense management of chronic diseases and coordination of specialist visits when needed. (See my earlier article on care coordination by the PCP)
Seventh, Serigraph uses what Torinus calls Centers of Value for procedures beyond those that the primary care physician does. These are doctors/institutions that have outstanding quality records yet a competitive price for, say, a knee replacement. Serigraph gives their employees $2,000 toward the deductible or covers the deductible for the surgery when they use these Centers of Value.
Seventh, his company gives (and he recommends others do likewise) generic drugs for free, and all of the above prevention and wellness programs are supplied free of charge. Finally, the company makes free counseling available for developing advanced directives, and if an individual requires end-of-life care, hospice is available free of charge.
I notice that his company spends considerably on extensive/comprehensive primary care, including wellness maintenance, proactive prevention, behavioral health, and chronic care management. In return, the company is rewarded in return with lower total costs and healthier workers.
Given that healthcare has become a company strategic priority, then it needs to be managed, and that requires data. Hence, he urges all companies to develop health-related management dashboards, including both a financial dashboard (how much is the company spending) and a health dashboard (how many individuals in the company have uncontrolled blood pressure, uncontrolled asthma, uncontrolled cholesterol, have not had appropriate mammography or colonoscopy, etc. — all information collected from the clinic in an unidentified manner to protect individual privacy).
These approaches are based on fundamental principles, including individual responsibility; marketplace discipline — installing consumerism, steering business to the best quality and price (“do good work and you get our business”); proactive care — maintaining employees’ health and wellness and give extensive care to those with chronic illnesses; and sound management — putting those who pay, i.e., the employer and the employee, in charge.
Torinus suggests that there are multiple rewards for following this basic approach (I added number 2 since he implied but did not write it.)
1) The reward for business is a healthier workforce and more affordable healthcare expenditures.
2) The reward for individuals is more health and wellness, less illness, and fewer dollars spent.
3) The reward for high-value providers is more business.
4) The reward for entrepreneurs comes if they innovate with better care provided at a lower cost
5) There could be a reward for taxpayers — if governments (federal, state, and local) were to utilize these approaches.
Sound advice? I certainly think so.