Safeway adds some prevention to reform
WASHINGTON —Safeway’s Healthy Measures program—a wellness-driven healthcare program that incentivizes employees to pursue healthier lifestyles—happens to be the real-world example on which a recent amendment to healthcare reform was based.
Sens. John Ensign, R-Nev., and Tom Carper, D-Del., members of the Senate Finance Committee, late last month won strong support from both sides of the congressional aisle for an amendment to the Senate Finance Committee’s healthcare reform bill that will encourage Americans to lead healthier lifestyles as part of an effort to lower their overall healthcare costs.
“There is a general consensus that investments in employer-sponsored wellness programs reduce overall healthcare costs for employers and employees, and generate savings for our healthcare system as a whole,” the National Retail Federation, along with a host of other associations, penned in a letter addressed to Senate Finance Committee chairman Max Baucus, D-Mont. “Evidence suggests that incentives, such as premium discounts, encourage participation in wellness programs.”
Those savings could equate to a return of $4.80 for every $1 invested into a wellness program, California state controller John Chiang wrote in a September letter to the California Congressional Delegation around the importance of including wellness programs in any healthcare reform package: “A recent study by the Trust for America’s Health and the Prevention Institute found that an investment of just $10 per person, per year in proven community-based programs to increase physical activity, improve nutrition and prevent smoking and other tobacco use could save California more than $1.7 billion in annual healthcare costs within five years.”
“Weight gain and unhealthy lifestyles that focus on smoking and lack of exercise have sky-rocketed our healthcare costs,” Ensign said in a statement released last week. “These costs could be lowered by focusing on what makes us healthy—through weightloss programs, smoking cessation and preventive care. Voluntary employee participation in these areas should naturally be reflected in lower healthcare costs,” he said. “My amendment would guarantee that the incentive is strong enough for Americans to want to participate. This isn’t just about offering financial incentives; this is about making Americans healthier.”
“Recent findings have shown us that the biggest factor contributing to most people’s health status is their behavior,” Carper added. “Roughly 40% of our health status is a direct result of our choices about food and physical activity. Another 20% is a direct result of social and physical environments, such as our homes and places of work. That means for most people, the way we eat, drink and exercise, as well as our work and home environments, shape as much as 60% of our underlying health status.”
If included in the final healthcare reform legislation, incentivized wellness programs could prove to be a boon for retail pharmacies. Wellness programs could help drive sales of smoking-cessation products, for example, a category that currently is growing at a 3.2% clip to sales of $753.6 million across food, drug and mass (including Walmart), according to Nielsen Co. data for the 52 weeks ended Sept. 5.
Under current HIPAA wellness program regulations, health plans can offer financial rewards in the form of bonuses or premium reductions to individuals based on achieving a health goal if certain criteria are met. The current reward threshold is limited to less than 20% of the total cost of the employee’s coverage. The Ensign-Carper amendment will increase the existing reward to 30% and give the Department of Health and Human Services the authority to increase that incentive to 50%.
The Ensign-Carper amendment, or the “Safeway Amendment” as described by one Ensign spokesman, also will provide waivers to participants who cannot meet the applied standard due to a medical condition.
The Coalition to Advance Healthcare Reform, founded by Safeway CEO Steve Burd, applauded the bipartisan passage of the wellness amendment. “Many of CAHR’s members have successfully pioneered wellness programs that have reduced costs and enhanced the overall health of their employees. These programs are an important piece of the overall health-reform puzzle,” stated CAHR executive director Darren Willcox.
“CAHR is pleased to have worked with leaders of both the Senate HELP Committee and now the Senate Finance Committee to amend the legislation moving its way through the Congress,” Willcox said. “We look forward to working with Sens. [Tom Harkin, D-Iowa, chairman of the Senate Committee on Health, Education, Labor and Pensions], Ensign and Carper to ensure these changes remain in whatever final healthcare bill passes later this year. By encouraging Americans to live healthier lifestyles, these amendments could lower the long-term cost of health care.”
Safeway first offered its Healthy Measures program last year as a voluntary program designed to encourage employees and their spouses or domestic partners to identify and understand major health risks, and with this knowledge, engage in healthy behaviors to help lower those risks. As part of that initiative, Healthy Measures tests body mass index, blood pressure, fasting glucose, fasting cholesterol and nicotine. And when Safeway employees or their partners reach optimal standards, they receive incentive discounts on their Safeway medical plan contributions.
And Safeway in 2009 signed with Quest Diagnostics Patient Service Center as the program’s new lab partner. All tests are forwarded to a third party as an employee’s health information remains protected under the Health Information Portability and Accountability Act privacy and security regulations.
There also is a waiver program for those who qualify so that employees with particular medical or health situations are not discriminated against.