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Tuesday, September 20, 2011

"Healthy Incentives" Reform Pays Off Big for King County: $61 million in Savings, Improved Employee Health

Posted by on Tue, Sep 20, 2011 at 11:53 AM

Well here's something you don't hear from government officials much these days: Positive budget news. Specifically, the $61 million King County will shave from employee health care costs in 2011 and 2012, money that is desperately needed to maintain crucial public services.

costsperemployee.jpg

Six years ago, in cooperation with the public employee unions, former Executive Ron Sims kicked off the county's "Healthy Incentives" benefit plan with much fanfare, but little serious attention from the press. Employees were given an option between the county's traditional KingCare preferred provider plan, and a managed care plan through Group Health that focused on improved wellness and shared costs. Well, after six years the results are in, and they're rather dramatic: an average $4,300 savings per employee for the 26 percent of county workers (and climbing) who are currently enrolled in the plan.

"At a time when we Americans are quite frankly getting fatter and sicker, King County employees are getting thinner and healthier," Executive Dow Constantine said today at a press conference announcing the savings, further emphasizing that "We did not do it by just shifting costs to employees, but by partnering with them." It's a lesson that some other public officials might want to study before seeking cost savings through a war on public employees.

And these savings translate to a real and immediate payoff for county residents. The $38 million of savings in the 2012 budget will be distributed to department budgets based on their total FTEs; that means the Sheriff's office will avoid cuts equivalent to 12 deputies, the Prosecuting Attorney will save the equivalent of 7 attorneys, and Public Health will net savings equal to about 20 nurses. That's both real money, and a real impact. There's $7 million in health care savings credited to General Fund departments alone, money that is desperately needed to help offset an estimated $20-$40 million revenue shortfall.

At the same time, participation in the Healthy Incentives program saved employees money, while significantly improving their overall health. The smoking rate dropped 40 percent over the past six years, from 10 percent of county employees down to 6 percent, while more than 2,000 employees classified as overweight or obese at the start of the program lost at least 5 percent of their weight, for a combined weight loss of over 24 tons. That's a win-win-win.

How does the program work? While the plan shares more of the cost of health coverage with employees, particularly for going out of plan and using non-generic drugs, it also incentivizes employees with lower out-of-pocket expenses if they take a health risk assessment and complete a 10 week individual action plan that focuses on physical activity, nutrition, weight and stress management, and smoking cessation. "When employees stay healthy, they need less expensive treatment, and need treatment less often," explains Constantine. And that has created huge payoffs for both the taxpayer and county workers, helping the county reduce the rate of growth of health care costs from 10 percent a year in 2006 to 6 percent today.

Is there a lesson for the private sector, as well as other governments? Yes, says Constantine: "You can get a lot more done working together, than fighting." Again, the sort of positive message you don't much hear coming out of government these days.

 

Comments (10) RSS

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1
Public "service" employees cost taxpayers so much because they are fat smoking fucks....
Posted by oinkoink on September 20, 2011 at 12:12 PM · Report this
2
This program might save money, but this data doesn't prove it. Assignment to the treatment group was not random. The treatment consists of financial and other incentives for healthy behaviors. It seems quite likely that employees who already had or were inclined to adopt those healthy behaviors would be more likely to choose the treatment option than less healthy or health-conscious employees. There is no measure of how much of the difference between treatment and non-treatment groups was due to this self-selection effect as opposed to the treatment effect.
Posted by David Wright on September 20, 2011 at 12:32 PM · Report this
Goldy 3
@2: Actually, no, there is a shit-ton of data of supporting this, compiled and analyzed both by the county and by the Puget Sound Health Alliance. In fact, I specifically asked if there were any demographic differences between those that chose one plan or the other, and they said no, other than that the Healthy Incentives enrollees were slightly older. Furthermore, these savings have proven consistent over time, even as the percentage of employees enrolling increased, meaning there wasn't much difference between the early adopters and the later ones.

But either way, regardless of whether there is any bias in the data, the indisputable fact is that these reforms have saved taxpayers money. Period.
Posted by Goldy on September 20, 2011 at 12:53 PM · Report this
4
Goldy - you've mixed up some info.

26% of County employees are Group Health members, that's correct. But all employees, whether they are in Group Health or with KingCare participate in the Healthy Incentives (or at least, they're encouraged to, in order to get better coverage for them and their dependants). It's the participation of all (or nearly all) employees in Healthy Incentives that is keeping costs down.
Posted by TJ on September 20, 2011 at 1:45 PM · Report this
5
There's benefit to having more County employees become Group Health member, yes. It's a less expensive plan than KingCare. County employees that are in Group Health went from 18% to 26%. This does save the County some money for health care.
Posted by TJ on September 20, 2011 at 1:51 PM · Report this
6
This all sounds like Social Engineering to me, therefore it must be bad.
Posted by Citizen R on September 20, 2011 at 1:57 PM · Report this
7
I was a strong critic of Group Health until I reluctantly became a member a few years ago. It is truly refreshing to receive care in a system that is concerned for your wellness rather than one concerned with whether they're going to bill enough office hours that month to cover their payroll/overhead. I do not miss the "Oh, have another symptom? I'll need to schedule you another appointment" days, and hope I never have to return to the less effective traditional healthcare system. I'm getting the best care I ever have, by teams of professionals who want me to be well and not to just bill another office visit.
Posted by Kari on September 20, 2011 at 2:46 PM · Report this
8
I would like to see some of the savings be passed on to the employees who are actually the ones that are making the choices that are saving the County $$. Stop laying off and cutting so many services - that's when I'll see difference rather than rhetoric
Posted by Scaryb4Coffee on September 20, 2011 at 3:21 PM · Report this
Just Jeff 9
Healthy Incentives is a joke. The programs you are required to complete are sophomoric. Multiple Choice questions can be answered without doing the reading. The online portion of HI is a nightmare, and the "logs" you are required to keep are easily faked.

How does King County save money through Healthy Incentives? A signficant number of people either can't or won't navigate the childish, moronic hoops you're required to jump through and say "screw it - I'll pay the extra 20%".
Posted by Just Jeff on September 20, 2011 at 9:52 PM · Report this
10
this is a complete fabrication. there is no credible data to support this..how much is the county paying web md for this fake program?
Posted by shirelyujest on January 25, 2012 at 7:25 PM · Report this

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