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This morning, an interview on National Public Radio revealed-- yet again-- that the private sector is far better equipped than government bureaucrats to deal with today's toughest challenges. In his conversation with NPR's Renee Montagne, Steve Burd, CEO of one of America's largest grocery store chains--Safeway-- explained the steps that his company has taken to lower health care costs and, in the process, promote personal responsibility and healthy living. The Safeway Healthy Measures program was first introduced in 2005. It provides employees with monetary incentives to lose weight, quit smoking and make good choices when it comes to their health. In a June 2009 op-ed printed in the Wall Street Journal, Burd wrote:
At Safeway we believe that well-designed health-care reform, utilizing market-based solutions, can ultimately reduce our nation's health-care bill by 40%. The key to achieving these savings is health-care plans that reward healthy behavior. As a self-insured employer, Safeway designed just such a plan in 2005 and has made continuous improvements each year. The results have been remarkable. During this four-year period, we have kept our per capita health-care costs flat (that includes both the employee and the employer portion), while most American companies' costs have increased 38% over the same four years.
Safeway's incentives have not only lowered costs, they have also empowered workers to take responsibility for their actions and their health.
Apparently, Safeway's innovative ideas have caught the attention of law makers on Capitol Hill. The Senate Finance Committee recently voted 18-4 to include in the Baucus Bill an amendment proposed by Sen. John Ensign (R-NV) and Sen. Thomas Carper (D-DE).
Under current Health Insurance Portability and Accountability Act (HIPAA) wellness program regulations, health plans can offer financial rewards to individuals based on achieving a certain health goal only 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 secretarial discretion to increase the reward to 50%.
Rewarding individuals for making responsible decisions instead of forcing responsible decisions upon them? Such a novel idea could only come from outside of the Beltway.