As I watch the debate over health care reform is interesting to see the polarity. Those who see Congress’s actions as an important step on an order of magnitude with Social Security and the Civil Rights Act, and others who see it as symbolic of a rapid descent into socialism led by a liberal Democratic administration. As someone who has been involved with health care for almost thirty years I see both points as equally simplistic. We have many issues with our health care system including delivery, cost, outcomes, and many others. The cost of delivering health care to their employees is a major concern on the agenda of most organizations and the availability of affordable health care is on the minds of most of us, especially we “Baby Boomers” who are headed into a period where our requirements for health care are going to increase.

For many years as a corporate human resources executive I have heard the refrain –“we are not in the health care business”. I would disagree for a number of reasons I will elaborate on and provide some thoughts for your consideration.

The Social Contract

When we moved from an agrarian economy to an industrial society almost 200 years ago we saw the beginning of the redefinition of the social contract. In fact it wasn’t so much a redefinition as a return to a model that our Founding Fathers had tried to remove when they framed our constitution.

When the Founding Fathers wrote the original constitution there were two primary ideas that formed the core of our new union. The first was the idea of personal property; the idea you have the right to acquire property and pass it along to your heirs. This is the heart of the capitalist system.

The second principle that we hear much less about is the principle of personal competency. This is the idea that each of us has the right and the responsibility to craft our own future- to be what we want to be; to reinvent ourselves without regard to our heritage or beginnings.

When industrialism began to emerge we saw that concept begin to erode. We ran out of new territories to colonize and pioneer. The industrial age required labor to staff its factories and production. We offered security in return for compliance. Give up your personal competency and we will provide security in the form of employment, retirement, and yes health care benefits. I am not going to say the great industrialists did this willingly or altruistically, but let’s agree that by the fifties it was commonplace for employers to provide “fringe benefits” like paid time off, pensions, and employer paid health care as part of the inducement to recruit and retain the labor we required. That was the “social contact” that our parents and grandparents were employed under.

In the seventies and eighties we saw the first signs of coming change- the costs of medical inflation began to outpace regular inflation and the “world economy” came into play, where it was cheaper to outsource work than to deal with root causes. Employers couldn’t and didn’t want to continue with providing that “security”. We saw the advent of defined contribution retirement plans and “cost-sharing” in providing health insurance. Managed care programs began to emerge as a potential solution, organizations cut back or eliminated retiree medical plans and other cost “shifting” methodologies. We didn’t want to “take care” of our employees anymore. I would submit however that we were dealing with symptoms rather than root causes. We were and remain engaged in the business of managing premium not costs.

The Current Situation

In the U.S. we have one of the most expensive health care delivery systems in the world with outcomes or “quality” that is best described as adequate.

Health care expenditures continue to devour a larger and larger component of our GNP with little respite in sight. We have many initiatives and plans dealing with access, but little that address costs.

The interesting thing is that estimates indicate that while technology, life span, heredity, and other factors all contribute to escalating costs the number one influence on health is lifestyle. There my friends are both the opportunity and the rub.

Jeffrey Pfeffer is an internationally renowned professor of Organizational Behavior at Stanford University. He points out that much of our health care costs are directly related to stress. Employees are stressed out about work, their finances, and a host of other issues. The current economy makes it worse not better, lose your job and lose your benefits. Unemployment insurance is relatively short term as well. Studies by the American Mental Health Association and others estimate we lose $200 billion annually to presenteeism. Presenteeism is where people show up sick, take up work time dealing with personal problems, or just flat miss work, we pay for it!

Another major factor in my opinion is education. How many of us as employers even talk to our employees about health care costs? I don’t mean premiums I mean costs. This goes to my point about personal competency. For generations organizations like corporations, government agencies, and collective bargaining agreements have provided employees and their families with high cost, high value benefit programs with little or no information about what those programs cost or how their behavior contributes to those costs. We tell our employees that we are reducing benefits, increasing cost sharing through higher deductibles, or similar strategies, but do we talk about how to reduce costs?

A “Modest” Proposal

I am going to tell you up front that there is a lot about the costs of delivering health care that individual employers and individuals have little effect on. Things like increased lifespan, pharmaceutical patents, preventative medicine, and other factors are largely beyond our control.

What is within our control at least to an extent is setting behavioral expectations and educating employees to modify their behavior and lifestyle. We also need to recognize that when people lose their health care coverage it doesn’t mean they lose the need for health care, it just gets delivered in a much less efficient manner.

If as an employee I have always been provided with high quality care as an entitlement with no consequences for my own behavior and no required contribution to its cost I have little reason to modify my behavior. If I am unaware of behaviors that cause costs I am similarly un-invested in finding a solution.

I have had the benefit of working with a couple of first class professionals in the industry and began asking questions about the process of “pricing” health care. They both explained to me that you essentially have two approaches; you manage premium, or you manage costs. Managing premium means you cost shift, reduce coverage, change carriers, etc. Managing costs as is implied means you examine root causes and address them. Based on my experiences with Total Quality Management and my prior experience with the Scanlon Plan we decided to explore costs. We saw significant positive results.

We did this two different ways. The first is that we examined “behavioral” causes of health care costs. This ranged from smoking cessation to weight loss and other lifestyle related modifications that we thought could address root causes proactively.

We also began educating employees and holding them personally accountable on both the occupational and non occupational side. Safety violations resulted in corrective action, whether they were injured or not. We looked at work processes that seemed to represent “hot spots” and targeted interventions.

We also used diagnostic data from our Employee Assistance Plans and wellness iniatives to re-train supervisors and employees in communications, feedback, and performance management. We also took efforts to address the issues systemically; ensuring that we treated the “whole” person when dealing with injured workers.

I will admit to being a managed care fan. I think that health care that emphasizes preventative interventions, lifestyle medications, and access to specialized care and medications directed by a health care professional makes much more sense than “interventional” care. By interventional I mean I ignore lifestyle, eating and exercise habits, etc. and then I utilize the awesome power of medical technology to “fix” me.

I can tell you that our approach saved hundreds of thousands of dollars, improved outcomes, and employee “morale”.

My “Recommended Plan

• Contract with an Employee Assistance Plan, preferably with a Wellness component. Employee assistance plans have been around for years. Originally people thought of them as kind of an in house school nurse or therapists, good ones are way more sophisticated than that.

A good EAP can help your employees and their dependents address some of these stress, alcohol, substance abuse and other issues much more cost effectively than your insurance provider. In many cases the EAP can act as a “gatekeeper” getting your people to the right intervention. Most are “funded”

in such a way that they are incented to do this efficiently. They provide services for a set fee not an open check book.

Many EAPs today also include Wellness programs. These are programs that involve health care screening, exercise and diet, and other lifestyle management interventions that help your employees and their families catch and address problems before they become problems. A gym membership is way cheaper than a bypass surgery!

EAP counselors can also help you identify “hot spots” in your organization. If a disproportionate share of your employees or dependents is using their services you can look for root causes. If a particular supervisor or manager has extremely high turnover or issues the problem may not be the employees.

• Look at incentives. It may sound crazy, but incentivizing your employees to utilize things like discounted gym memberships, smoking cessation programs, weight loss, and safety campaigns can save you big bucks. By explaining to employees that health care costs effect the dollars you have available to pay wages, make investments in technology and capital, and pay increases you would be stunned at the difference it makes. They become your partner not your dependent, they realize by helping you they are helping themselves.
• Hire and train good supervisors. I have been a practicing human resources professional for thirty years and we have a truism- “people join companies and leave managers”. Poor supervisors and managers cost businesses millions every year in turnover and lost productivity. Make sure that when you hire or promote someone they have the right skill set. This doesn’t have to be horribly expensive. You can either hire these skills or in many cases there is excellent supervisory training available through your local Chamber of Commerce or community college. Executive coaching is great, but most of your employees don’t work for an “executive”. Poor front line supervision is relatively cheap to fix.
• Engage your employees. Engaged employees see themselves as being in partnership with you. They care about your organization, your customers and your goals. They are committed not compliant. Engagement isn’t a big company phenomenon. It requires trust, respect, responsibility, information, rewards, and mutual loyalty.

A New Social Contract

The personal competency part of this whole topic is that we need to equip and hold individuals accountable for participating in both the costs and causes of dealing with the health care issue. My concern is that many of the models I hear being discussed are about who pays and extending access to care. I agree that everyone should have access to care. I am concerned that if we don’t address root causes including personal behavior and lifestyle issues we will still be managing premium, not costs!

Extending mandated care benefits such as mental health, chemical dependency, and related benefits has a moral and social value, but unless we address the causes we won’t fix the issue.

As employers we are in an almost unique position to educate and partner with our employees on addressing these issues. If we want to remain competitive in both our local and the world marketplace participating in the social infrastructure is not only a business necessity it is a good business decision. Like it or not, we are in the health care business, at least in a supporting role!

One of the “ancillary” benefits of engagement and partnering is that employers with high engagement scores outperform their competitors in key metrics like productivity, profitability, and retention. They do things with people not to people.

Individuals need to participate in the management of their lifestyles and in the costs of providing health care solutions. Employers can participate through education and partnership with health care providers. The most commonly prescribed medications in the U.S. are anti-depressants. Drugs treating people for ADHD and others are in the top 10. Viagra and other erectile dysfunctions drugs are coming up fast. It is too easy to blame it all on the insurers, the medical community, and the government. We have to hold people accountable.

So I guess in conclusion I would want to be sure that as we move forward with a new social contract that along with the other rights we hold dear we include the right of personal competency and that we include personal accountability and responsibility along with education, personal property, and security. It will take us all, but let’s start treating each other with the respect we deserve and stop parenting our employees.

• Trust
• Respect
• Responsibility
• Information

These are some of the pillars of a commitment or engagement based relationship rather than compliance or codependency. I think there is room for these principles in health care. I hope you do too