August 16 2011
Reducing Health Care Costs by Rethinking Health and Care
Several words come to mind when people think about health care, one of those being “costly.” A recent report from Medicare’s Office of the Actuary projects that by 2014 health care spending will grow by 8.3 percent. This rate far outpaces any projected growth in the U.S. GDP. And by 2020, the U.S. is expected to pay $4.6 trillion – yes, TRILLION – for health care services.
Some of this cost is unavoidable as the Baby Boomer generation heads into retirement and begins to become heavy consumers of health care services. But there are things we can do as individuals and as employers to improve the health system and ultimately reduce costs.
Finding a solution through a “living lab”
At Cerner, we have big ideas about how we can change health care for the better. Many of these ideas start out as theories that need to be put into practice and tested to prove their validity, or lack thereof. One of these ideas was the notion that we could do a better job than our insurance company of providing quality, cost-effective health care services to our associates (our preferred term for employees) and their families.
In 2005, we made the bold decision to terminate our relationship with our health insurance provider, believing we could devise a better way to manage these needs for our associates and their families while at the same time reducing unnecessary overhead. And in the following year, we opened our first on-site health clinic, providing convenient, cost-effective primary care needs to our associates and their families.
Our intuition that we could do it better proved to be right. While health care premiums rose more than 100 percent from 1999-2000, ours rose at a markedly slower pace. Only once in the last five years have we had to raise the deductible on our health plan.
Our on-site health clinics (we now have two) have also been instrumental in helping us improve the health of our population and reduce costs. Last year alone, we had 17,212 visits to our on-site clinics. Coupled with our on-site clinics are pharmacies, which also deliver significant savings to our members and back to the company. Our health plan members typically save 20-90 percent on prescriptions purchased through our pharmacy.
Innovative ways to reduce costs
In addition to our health plan design and on-site clinics and pharmacies, we’re also testing out new technologies that we think can reduce the cost of care. An example of this technology is our eVisits offering.
Through eVisits, our associates and their families who have been seen previously at one of our on-site clinics can handle their routine medical needs electronically by answering a series of questions about their symptoms. Depending on the responses, a physician or nurse may prescribe medicine or ask the individual to come in for further testing.
eVisits can save our associates and their families valuable time by reducing the need for an in-person visit, but we also think they can reduce the burden on the health system. We believe primary care providers and emergency room physicians could use eVisits to reduce patient load and waiting times. Based on our projections, we think eVisits could allow providers to receive supplemental income without adding staff – potentially up to $40,000 with an ability to “see” 10-15 percent more patients.
Engaging people in the health journey
We won’t be able to change the health care system without the buy-in of the people who use health care services. That’s why we’ve started a number of programs to help our associates get engaged and improve their own health. If you’re healthier, you’re less likely to require costly care for potentially preventable conditions like obesity and heart disease.
In October of 2010, we launched the Cabinet Challenge, our challenge to associates to lose weight and live healthier lifestyles. Our associates have formed teams that are competing to lose the most weight, with the winning teams winning an all-expenses paid tropical vacation and extra paid time off.
The results so far have been astonishing. Collectively, we’ve lost more than 20,000 pounds. And numerous associates have shared their stories about losing 60, 80, even 100 pounds just through better diet and exercise. We’ve taken a number of steps to help our associates make these health choices, from a take-the-stairs campaign, to color-coding food options in our cafeterias to denote which choices are healthy and which aren’t to making both of our on-site fitness centers free to associates and their families.
Want to learn more?
The examples above are just a few of the ways we’re trying to reduce costs by rethinking our approach to health and care. If you’re interested in learning more about our efforts to reduce costs and improve health, check out the Health Brief. In this section of the website, we share more examples of how we’re changing the health care system, including first-hand stories from our associates who have used these programs and improved their health.