On June 12, the CEO of Safeway (Steven Burd) wrote an insightful piece for the Wall Street Journal titled “How Safeway is Cutting Health-Care Costs.”  After an analysis of their health care costs in 2005, Mr. Burd found that 70% of the health care costs that Safeway is facing are driven by behavior-related items.  In particular, 74% of their health care expenditures came from just four areas: cardiovascular disease, cancer, diabetes and obesity.  In an effort to reduce these expenses and improve the health and productivity of their employees, Safeway redesigned its wellness program to encourage employees to improve their health.  Participating employees earn incentives in the form of health insurance premium discounts (up to $780 for individuals; $1,560 for families) for tracking and improving their health status around the four key cost areas listed above.  The results of their program (called “Healthy Measures”) have been nothing short of remarkable:

• Obesity and smoking rates are now 70% of the national average
• 0% increase in health care costs over the four years that they have run the program
• 78% of employees rated the plan as “good, very good or excellent”
• 76% of employees have asked for more financial incentives to reward healthy behaviors

It is impressive to consider that Safeway held its costs flat while the average increase in health care costs over the same period was 32.6% according to research conducted by Towers Perrin.  Safeway’s experience demonstrates that the strategic applicaton of incentives to change behaviors around the core drivers of health care costs can yield dramatic results.  The program is completely voluntary and currently covers over 70% of Safeway’s non-union workforce.  You can read the full article online at the Wall Street Journal.

Welcome to the corporate blog from incentaHEALTH.  Called “incentaHEALTH Insights“, our blog dives into the questions of the day related to health care and wellness.  We are at a tipping point where the unchecked increase in health care spending is capturing the attention of everyone, from business executives, to policy makers, to individuals looking to gain control over their health.  Through this forum, we hope to explore new answers to the most pressing challenges facing health care:

• Why are health care costs increasing at a double digit rate each year?
• What portion of health care costs are related to lifestyle and behavior versus genetics?
  
• Who is responsible  for managing health care costs?  The government?  Employers?  Individuals?
• What can be done from an employer’s point of view to control these costs?
• How can individuals be empowered to take responsibility for their health and improve their well being from the ground up?
• Are incentives an effective way to engage employees in corporate wellness?
• In the age of email, text messages, Twitter, and Facebook, what is the best way to reach my employees and members?
• Do new technologies help or hinder the pursuit of protecting individual privacy with respect to personal health information?
  

The time is ripe for a fresh look at these questions.  New technologies, new findings about the science of behavior change, and new ways to measure results all provide a unique opportunity to dramatically improve the health of our employees and our organizations.  Please join us as we examine the best and brightest ideas in improving corporate wellness.

Warm regards,

Todd McGuire

Chief Operating Officer | Chief Technology Officer
tmcguire@incentaHEALTH.com

4600 S. Ulster Street Suite 850
Denver, Colorado 80237
(303) 694-8008
http://www.incentaHEALTH.com