DailyFinance reports that IBM has announced that as most companies are cutting back on healthcare benefits, they are doing the opposite and making moves to pick up the full tab.
At the core of IBM’s ability to make this decision is its employee wellness program. The story cites:
“‘There is evidence that attention to employee wellness can pay dividends. IBM is putting an innovative spin on “value-based benefits design,’” a practice through which companies have eliminated the cost of a medical treatment as a way of lowering insurance claims within high-risk populations, said Paul Fronstin, director of the Employee Benefits Research Institute (EBRI) health research program.’”
As a result of their preventative efforts, IBM is saving money, to the tune of $191 Million between 2004-2007.
Stories, like IBMs are important at a time when Business Roundtable, an association of chief executive officers of leading U.S. companies, finds that “annual per employee health care costs will triple to nearly $29,000 over the next decade without significant marketplace reforms that reduce costs, expand coverage and improve delivery.”
And while IBM is not nearly the average business, they are representative of the power of employee benefits data, resulting wellness programs and how both drive down the overall cost of healthcare for businesses and employees.
This approach is scalable and can manifest itself in various models. Take Upper Merion Township in Pennsylvania for example. With 200 employees and 30 retirees, the Township needed to address costs that were draining its budget. After an assessment of strategy and cost containment options, they are currently executing on a data-driven, prevention-based approach to their healthcare strategy. Employees now have a stake in the game and are cost-sharing with the Township in a flat fee model. This new strategy is already controlling costs within the first year of implementation and based on these results, the expectation is to see a 4-1 return on this preventative approach.
The ability to take control is in healthcare data. What company stories are you aware of that exemplify the power of this approach?
- Keith Lemer
