A Health Care Winner That May Get ZappedMike Mcnamee
Dave Denby is a wellness convert. The 50-year-old systems manager at Travelers Corp. sees his doctor a lot less often since he lowered his blood pressure with workouts at the company's Hartford (Conn.) fitness center. And he no longer rushes his daughter Sarah to the doctor every time she gets a cough: Health tips from the Travelers facility convinced him and his wife that the 11-year-old's routine coughs would clear up on their own. "Before," Denby says, "we didn't have confidence in our own knowledge."
The Denbys are healthier than they used to be. But the biggest winner may be Travelers. An independent evaluation of its Taking Care Program, published in the Journal of Medicine, found that Travelers reaped $3.40 in savings for every $1 spent on the program, thanks to increased productivity and lower medical and absenteeism costs. The insurer's net savings: $9.8 million in 1992.
Such results are becoming common as more companies adopt wellness plans, which offer employees everything from fitness centers and disease screening to smoking and alcoholism control. Indeed, a team of researchers finds in the July 29 issue of the New England Journal of Medicine that the best of 200 corporate wellness programs cut medical claims by up to 20%. If such "demand reduction" could be extended to all Americans, the researchers argue, the nation could cut $180 billion from its bloated health-care bill.
But wellness plans face a threat from an unexpected source: health-care reform. Hillary Rodham Clinton stresses the need for a medical overhaul that promotes good health. But the Administration's plan, scheduled for release in mid-September, could wipe out employers' incentives to promote wellness.
The threat stems from the White House's plan to pay for health-care reform. As it stands now, it would replace employers' current negotiated health-insurance premiums with either a payroll tax or a flat premium that would be the same for every person in a state or region. Either scheme would eliminate any connection between a company's payments and its employees' medical bills--and any advantage for a company that invests heavily in prevention. "If we're lumped with everyone else, there's no rationale for us to take care of our employees," says Max L. Morton, manager of wellness service for Coors Brewing Co. in Golden, Colo., which nevertheless has no plans to shutter its center.
White House officials maintain that their plan will reward health promotion, not impede it. Insurers will have to cover basic preventive services, such as screening tests, vaccinations, and checkups. And Ira C. Magaziner, staff chief for the Administration's health-reform task force, argues that the networks of doctors and hospitals that deliver care will be required to promote wellness among their customers. Health plans, which will receive flat annual fees for each person they cover, will have financial incentives to keep customers healthy, reform advocates say.
MISSED OPPORTUNITY. But screening tests and checkups are among the least effective ways of cutting health costs. And wellness advocates say the workplace is often the best site to reach people with health education and fitness plans. "Think of how often you go to the doctor versus being at your office every day," says William B. Baun, manager of health promotion for Tenneco Inc. Employers say they're better suited to provide integrated health promotion, covering everything from nutritional choices in the cafeteria to educational literature for workers' children.
Business hates the potential cost of the health plan, regardless of its effect on wellness programs. But beyond self-interest, business and its allies think the government may be missing a chance to control costs. "The secret to demand reduction is to give the incentives to the people who can reap the savings--and that's employers and insurers," says Dr. James F. Fries, the Stanford University School of Medicine professor who wrote the New England Journal article. But that approach requires putting faith in the market's ability to bring down medical spending--a faith that so far has eluded the Clinton team.