Can Safeway lead the way in controlling health costs?

Can Safeway lead the way in controlling health costs?

There’s been a lot of talk since the healthcare law passed about the success the supermarket chain Safeway has had in controlling costs by aggressively encouraging employees to participate in healthier lifestyles. There has been a lot of marketing and hype and publicity about their success, as well as the success of other employers in the market.

But does such active engagement really work?

The argument for implementing wellness programs and incentives does inherently make sense. There is significant data to support the fact that unhealthy behaviors do contribute to higher healthcare costs. There’s also no question that employees should be held more accountable for their decisions and the impact those decisions have on costs – not just to themselves, but to the employer.

But while financial incentives can be effective in getting people to change behavior in the short term, the challenge is in insuring that employees are consistent.

It is not uncommon for employers these days to make adjustments to copayments and deductibles, based on employee engagement. But the reality is that most employers seldom have the means to measure the cause and effect relationships. They’ve heard anecdotes, alleged success stories, but have not been given data that truly link the impact of their incentives on medical outcomes.

That’s because it is very complicated to bring together all of the necessary data for an employer to be able to measure whether a certain wellness program has truly had an impact on medical outcomes.

Take the case of Safeway, for instance. There have been many reports about Safeway’s success in reducing the trend of health inflation, but when one looks under the covers, the company has many programs in place, none of which are integrated. In addition, there has yet to be published any substantial data to support the notion that their programs have reduced the incidents of chronic disease or utilization of services.

There are many employers who will make investments in onsite clinics, wellness screenings, fitness devices, and spend enormous amounts of money on these initiatives. Without adequate measurement of how engaged a consumer really is, both at home and at work, and accurately linking this data back to clinical outcomes, any claims of success at cost reduction are guess work.

Sreedhar Potarazu is an ophthalmologist and founder and CEO of Vital Spring Technologies. He blogs at Business and Policy.

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  • Brian Mckenzie

    You haven’t looked very hard : every outsourcing Wellness program has sales and promotional stats showing the savings from base year – to indexed year for smoking cessation, weightloss, fitness, stress management and health tracking for visits, immunizations, and clinical encounters. I know when I was at 24 Hr Fitness; the average savings of an enrolled participant vs an unenrolled was about 2/3. The use the insurance less, are more conscious about self status decisions and healthy outcomes – it is a great way to get to the solutions for obesity, fatigue, stress, smoking…. for chronic disease of cancer – not so much; but you shouldn’t be looking to a wellness widget to solve that one. Again – leave the books and studies alone – go talk to those actually doing the business.

    • LeoHolmMD

      Of course all the programs have sales and promotional stats…they are trying to sell wellness programs. This is why some objective data is needed to decipher if these programs are worth it or not. Despite all this wellness and prevention talk, healthcare costs continue to rise. Effective?

  • Steven Reznick

    Any program that gives people an opportunity to learn how to shop and prepare food in a health conscious manner, stay active and Healhty , physically , mentally and emotionally and avoid the development of legal but adverse health habits like smoking anything or drinking alcohol to excess is positive. We used to begin this process during health classes in school but budgetary cutbacks have eliminated most of this. We need to return these topics to the classroom, the home and continue to introduce it to the workplace. It is cheaper to prevent these illnesses then treat them.

    • EE Smith

      Agree 100%. I went to a small public school in the Midwest, and I do think the classes we had in Health, and also in Home Economics, gave us a good basic foundation for developing healthy lifelong habits. So many younger people today just really seem to have no idea… not because they’re stupid or anything, but just because no-one’s ever taken the time to teach them.

  • ninguem

    If Safeway wanted to promote wellness, there are entire aisles of products they can empty out and stop selling.

    Alcohol. Liquor. Cigarettes. Snack foods. The entire soda pop aisle.

    They are in the business of selling the very things that people should not buy. if they want to stay well.

    And now they’re going to introduce a “wellness program”?

    I’m not picking on Safeway, just that it’s the title of this post.

    So when that “wellness advisor”, whatever they call the person, says “avoid Aisle 8, 3, the tobacco counter, the alcohol displays, what exactly will be Safeway’s response?

    • LeoHolmMD

      Thank you. As employers become more and more intrusive, this argument needs to get a lot more momentum. Some of the companies pushing these wellness programs are some of the biggest offenders of public health.

      • ninguem

        Indeed. The “wellness” programs and “employee assistance” programs can be a problem, in that workers give up more privacy than they realize, to employer snooping.

  • Julie Saeger Nierenberg

    Two companies I worked with had excellent health incentive programs and set a standard of caring and advocacy — pro-fitness, pro-health, pro-prevention — and the employees made their own lifestyle choices with that support in mind. In one position, I adjusted my working hours in the laboratory to swim or jog at lunch. I was much more focused and energized for the PM part of the day and appreciative that I had ‘handled’ my personal daily commitment to fitness. It’s a great precedent to set. In one of those positions, department heads asked employees for hours logged in physical workouts, including walking the dog, playtime with kids, etc., and there was a bit of healthy competition for per capita exercise per week.

    • Chris

      “department heads asked employees for hours logged in physical workouts, including walking the dog, playtime with kids, etc.”

      I’m sorry, but that sounds creepy beyond all belief to me. I sell 40 out of 168 hours a week to my employer, that’s it. They will have to offer to pay for the other 128 hours of my time (and all 168 hours of my dog’s time, and my children’s time) if they want control of them.

  • Beau Ellenbecker

    Safeway story is a fallacy. They do a great job at the corporate level but the vast majority of their employees work at the store level and have almost none of these benefits. Its the well off taking good care of themselves.

  • John Henry

    I have nothing against grocery stores. it is an intensely competitive business with thin margins where price and volume are everything. I don’t confuse them with health promotion or “wellness” enterprises, and I wouldn’t expect them to be at the forefront of anything that isn’t tied to reducing their operations costs. If having employee health nurses chase smokers, overweight employees and those with high blood pressure reduces outlays to their insurer premiums or payouts from the ERISA, then they will act, as long as costs are less than returns. But they are a retail business, not much more. Are they going to revolutionize healthcare services? I doubt it.

  • buzzkillersmith

    When you work for CorpMed, it feels great for about a year. Steady salary and fixed hours are the big draw. In years 1-2 CorpMed loses a bit of its charm and admin starts to tighten the ropes. By year 3 or 4 or 5, CorpMed becomes an abusive parent. In time, everyone hates working for CorpMed. Abusing people who have other options is not a good business model.

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