The Workplace as a Battleground for Curbing Health Costs

April 14, 2010
3:20 pm

This week, Johnson & Johnson’s Chairman and Chief Executive Officer Bill Weldon added a new activity to his day—blogging.  He became a contributor, for the very first time as he acknowledged, to the JNJBTW blog for company employees.  His post reinforces the idea that employers need to have a more involved role in attacking disease and he outlines how Johnson & Johnson has established wellness techniques to do just that.

He wrote:

“J&J employees get a $500 discount off their health insurance premiums if they work to reduce their health risks – things like smoking, overeating, high cholesterol, physical inactivity, hypertension and stress.  We try to make this easier to do, with on-site clinics, screenings, counseling, gym facilities, and cafeterias that served healthy food.  We also have interactive and personalized digital health coaching that’s available 24/7. The coaching is tailored to each person’s motivations, confidence level, medical needs, personal characteristics and lifestyle.

So what’s the result?  Only 4 percent of J&J employees smoke compared with more than 18 percent of Americans. Less than 7 percent of our people have high blood pressure, yet 28 percent of the U.S. public does.  Seven percent of J&J employees have high cholesterol, while five times as many Americans – 37 percent – do. 

With those kinds of changes, we estimate we’ve avoided some $21 million in costs from 2001 to 2009 alone.  Our health care costs are trending 4 percent below increases for industries such as ours.  And our return on investment has been 4 to 1, about $4 in healthcare and productivity savings for every dollar we’ve spent on prevention.”

There is no doubt that employer wellness programs can play a tremendous role in controlling healthcare costs.  Currently, chronic disease accounts for 75 percent of U.S. healthcare spending.  With more organizations taking this kind of activist role, the private sector can bend the health cost curve while also increasing workforce productivity.

Health Reform And Medical Innovation

April 09, 2010
10:38 am

Throughout the recent health reform debate, policymakers spoke a great deal about coverage and access issues.

There was also considerable attention paid to the challenge posed by rising healthcare costs.

To a lesser degree – less than it should have received, anyway – there was debate about reforming healthcare delivery and payment systems.

But there is a major topic about which he heard precious little during the entire health reform process.  Medical innovation.  How do we construct health policies that encourage continued investment in research and development of new lifesaving medicines and technologies?   This, unfortunately, was not a question addressed in any substantive manner during congressional debate.

Now, though, we’re learning more about the impact health reform legislation may have on healthcare innovation.  During an interview yesterday on CNBC, Medtronic CEO Bill Hawkins spoke about the positive elements of health reform such as expanded coverage and an emphasis on wellness and prevention, but said the revenue-generating provisions in the bill will likely lead some companies to cut their R&D budgets.

It’s an important interview to watch (with the side benefit of Mr. Hawkins also discussing new heart valve technology that is available in Europe, but still awaiting approval in this country).

Stopping The Scam Artists

April 07, 2010
1:44 pm

It’s unfortunate, but sadly predictable, that the recent passage of health reform legislation would be seen as an opportunity by those who prey on the most vulnerable in our society.

Good for HHS Secretary Kathleen Sebelius for shining a bright light on, in her words “scam artists and criminals (who) may be using the passage of these historic reforms as an opportunity to confuse and defraud the public.”

Secretary Sebelius was referring to fly-by-night outfits that are setting up toll-free phone numbers and going door-to-door to sell fraudulent health insurance policies.  Their sales pitch?  That Congress established a limited enrollment window for people to buy government-subsidized health coverage.

The fact, of course, is that the new health insurance exchanges called for in the legislation, which will include subsidies for low-income Americans to help purchase coverage, don’t actually go into effect until 2014.  These quick-buck artists, though, are seeking to take advantage of the fact that many Americans don’t know the details and timetables of health reform.

We know from experience, having been closely involved in the implementation of the Medicare Part D prescription drug program through our Medicare Today initiative, that any new health program can bring many questions, uncertainty and confusion.  A measure the scope and magnitude of health reform will multiply those concerns.  Public education is going to be an essential component of health reform implementation.

Secretary Sebelius is doing the right thing in laying the ground work for this public education effort by cracking down on those who would maliciously spread misinformation for ill-gotten gains.

More Concerns About Medicaid Expansion

April 02, 2010
11:48 am

There was an excellent article yesterday by Mike Lillis in the Washington Independent containing valuable data regarding the Medicaid expansion that is at the heart of the recently-passed health reform legislation.

We can certainly celebrate the fact that millions of uninsured Americans will now have access to affordable health coverage.  Of considerable concern, though, is the fact that much of whittling down of the uninsured rolls is going to come through expansion of the Medicaid program.  In fact, the legislation changes Medicaid income eligibility levels to the point that 15 million citizens will now be added to the program.

As Mr. Lillis points out, here are the problems with that approach:

In 2008, doctors treating Medicaid patients were paid at just 72 percent of the rate they received for giving care to Medicare patients, and Medicare is itself well below private insurance payers in reimbursement levels.

As a result of these low payment rates, only about four of every 10 physicians accept all new Medicaid patients, according to the Center for Studying Health System Change.

The legislation does raise certain Medicaid payments, with the federal government picking up the tab for the increase, but only for two years.  After that, it would be up to cash-strapped states to maintain those levels, a difficult proposition to put it mildly.

The story also points out that the increase in Medicaid reimbursements will only cover services that are also covered by Medicare, which means that many healthcare services needed by children – such as flushing ears to treat and prevent infections – wouldn’t be covered.

As Mr. Lillis’s story indicates, there will undoubtedly be a push to maintain the higher Medicaid payment rates beyond the two years called for in the legislation.

Doing that, however, will make it more difficult to claim that this legislation actually reduces federal deficits.

But that’s an issue for another post.