The Way Ahead: Placing Health-Care Options in the Hands of Private Companies
Companies like Wal-Mart and Toyota are loosening the rules for employee health-care enrollment and offering insurance options that workers find attractive.
February 24, 2009 - 12:29 am
Toyota’s solution was to take more control over the primary care their workers receive, and invest in prevention, convenience, and efficiency. They set up on-site health clinics at their manufacturing facilities, staffed and run by Toyota employees. There, workers have ready access to low cost care at convenient times, and the company can control expenses with its trademark management oversight. Studies indicate substantial savings as well as high employee satisfaction.
There are other examples as well. Whole Foods, Safeway, and Target now all offer their workers high deductible plans tied to health savings accounts. With these arrangements, the employees have much more choice and control over their health-care dollars. If they don’t spend their full yearly allocation, it stays in their account for them to use later. The employers also give the workers tools, such as wellness programs and access to nurses, which help them manage their health budgets.
In a sense, employers are playing a leading role in innovation because they can. They are the most powerful participants in private sector health care. In 2007, some 165 million Americans were enrolled in job-based health insurance plans. The largest employers have the capacity, if they choose to use it, to leverage change in the ways health care is delivered so that it is more patient-focused, organized, and convenient.
Changing health-care service delivery is difficult work, and not every employer has concluded that the investment is worth it. Even so, the marketplace is starting to respond to consumer demands for better arrangements, even without a push from corporate sponsors. Walk-up clinics in pharmacies and retail shopping areas are growing in popularity because of their convenience and low costs. And software companies, including Microsoft, are moving toward systems which make it easier for patients to retain control over their medical history and records, thus making personalized solutions easier to build.
Unfortunately, even strong private sector incentives can only go so far when public policy pushes in the opposite direction. Medicare and Medicaid are the dominant payers in American health care, and their reimbursement rules are designed to underwrite fee-for-service medicine, which is fragmented, uncoordinated, and costly. Government programs thus limit the speed with which innovation is taking place.
President Obama and his allies in Congress are currently readying reform plans which would enhance the power of public programs and diminish the role of the private sector. If adopted, consumer preferences would inevitably take a back seat to government decision-making, and the progress that is being made around the country to find new models of care, led by employers, will be lost.