WASHINGTON, May 12 (UPI) -- Postal-products maker Pitney Bowes recently overhauled its employee healthcare program using two key strategies: encouraging workers to manage the chronic health conditions that will prove the costliest to the company if left unchecked, for example by offering workers low co-pays for all drugs -- brand and generic -- that treat disorders like asthma and diabetes; and keeping healthy workers healthy by giving the employees themselves a major role in that mission.
Jack Mahoney, the company's corporate medical director and global healthcare management director, has co-authored a book on Pitney Bowes' benefits restructuring entitled "Total Value, Total Return."
In Part 2 of an interview with United Press International Mahoney discusses Pitney Bowes' approach to maximizing returns on employee health benefits, based on the notion that "healthy people are key to a healthy organization."
Q. How has Pitney Bowes designed its own employee-wellness program?
A. It's built on a system where people can actually accrue credits for maintaining or improving their healthcare status in a given year. Those credits translate by a formula to additional (funds) to purchase their healthcare for a subsequent year. Literally, there's a built-in incentive for the individual, and to the extent that there's savings, we're sharing that back with the employee.
Q. What results are you seeing from the on-site clinics that Pitney Bowes recently launched?
A. We have seven clinics functioning right now. Last year they had 35,000 patient encounters. We know that we can cut the cost of care by about 30 percent, but the most important thing, where the clinics produce the biggest savings, is with absenteeism.
The patient can be seen on-site, and most of the time the problem can be resolved very quickly, and they can return to work. In the times when it can't be resolved, they can be referred right away to a specialist. So the biggest savings from the clinics, I would say, are from the decrease in absenteeism, and secondarily by lower costs in delivering care.
The clinics represent about 1.5 percent of our total healthcare costs. (At Pitney Bowes' Stamford, Conn., headquarters, the medical personnel) are all our own employees, and in the locations that are our call centers, we have subcontracted to local medical groups. The rationale is, that if somebody (gets care) there, we want there to be continuity of care if they're referred out. We don't want issues of somebody being referred out of network or having to repeat lab tests because they're jumping between providers.
Q. You say in your book that as pay-for-performance and the practice of using plan design to drive patients to low-cost, quality providers becomes more popular, physician and hospital networks will become obsolete. Can you explain?
A. A lot of networks (like that of HMOs, PPOs) and many of the big health plans spend a huge amount of their time on retro-analysis of claims, and retro-analysis of activity and I think once the system begins to focus on delivering quality, it's going to drive us in a very different direction.
I think the networks will still be there, but they'll be built on rewarding quality providers. The kind of network that would go away would be one that just pays claims.
Q. What health plans are ahead of the curve in using this valued-based, quality-driven design?
A. A good example is PacifiCare in California. They've got a value network of medical groups, and the people who go there see a lower co-pay than if they go elsewhere. We're seeing the same phenomenon in a number of health plans, United Health is doing something similar, Aetna is doing something similar with their Excel networks, so it's a growing movement.
Q. You say in your book that offering health savings accounts alone is not the best way to empower your employees. What is the experience with HSAs at Pitney Bowes?
A. We've got about 1-percent enrollment. I think the issue is to look at the design of the HSA plan. We offer the preventative services free or at very low co-pays before the deductible. For the pharmacy component, we offer all of the preventative drugs, plus things for asthma and hypertension and diabetes at low coinsurance before the deductible.
So we think there's a way to design the plan, so that it still preserves our values, if you will, but we don't look at it as a silver bullet. We certainly aren't going to offer it as a replacement for all of our other plans. I think we'll have more (HSA) uptake, but I'm certainly not (anticipating) a steep curve.
