Wellness, Prevention Likely to Survive Battle Over Health Care Reform

By Staff Report

Jun. 10, 2009

Even before health care reform legislation has been formally introduced on Capitol Hill, skirmishes have broken out regarding proposals to establish a government-sponsored insurance program, tax health benefits and mandate employer coverage.

But an area that has drawn high-profile activity by HR professionals—wellness and prevention—may survive the coming battle because it consistently draws bipartisan support.

A bill written by Sen. Tom Harkin, D-Iowa, would provide an annual $200 tax credit for each of the first 200 employees participating in wellness initiatives and $100 for each additional employee.

The Healthy Workforce Act requires that the wellness programs include three of the following four components: health education, participation monitoring, behavioral change and a supportive environment for healthy lifestyles.

Harkin is confident that the measure will be included in comprehensive reform bills that come out of the Senate Health, Education, Labor and Pensions Committee and the Senate Finance Committee.

The finance panel, led by Chairman Max Baucus, D-Montana, and ranking Republican Charles Grassley, R-Iowa, has jurisdiction over tax policy.

“Both Grassley and Baucus have been very supportive of it,” Harkin said before the Memorial Day congressional recess.

On Tuesday, June 9, in Washington, America’s Agenda, a coalition of businesses and unions, released what it calls “a consensus-based framework for sensible and achievable national health reform legislation” that emphasized, among other things, improved disease prevention and management.

John Butler, chief human resources officer at Textron, helped the group make the case for prevention. The Providence, Rhode Island, manufacturer has held its health care costs below the national average and has not increased employee contributions for its health care plan in the past five years.

The company consolidated 154 medical plans into one consumer-driven offering for salaried employees, instituted wellness programs, encouraged the use of generic drugs and generally squeezed inefficiencies out of its system, according to Butler.

As a result, the company has saved about $47 million annually since 2002.

“It’s not about cost shifting,” Butler said at a National Press Club event. “It’s about prevention.”

At the same press conference, Randy MacDonald, senior vice president of human resources at IBM, touted the value of prevention. Between 2005 and 2007, IBM invested $81 million in wellness programs and saved about $190 million.

“We genuinely believe that IBMers have become healthier,” MacDonald said via speaker phone from IBM headquarters in Armonk, New York. “Our employees also have become more productive and satisfied.”

Dow is another prominent wellness advocate. Janet Boyd, director of government relations tax and benefits, participated in the April press conference where Harkin introduced his bill.

Later that month, Gary Billotti, Dow’s global leader, health and human performance, spoke at the World Health Care Congress in Washington.

“We’re building a strong new culture of health, with prevention at the core,” Billotti said. “It’s become a part of our annual company sustainability goals.”

Billotti said that for every 1 percent improvement in health risk factors for Dow employees over 10 years, the chemical company saves $62 million in health care costs.

Dow spent $700 million on wellness programs in 2008 and had a 78 percent employee participation rate in health services activities, a 4 percent increase over 2007. More than 18,000 employees joined at least one of more than 1,800 group activities, a 14 percent increase over 2007.

Other companies that have brought a wellness message to Washington in the last two months include General Electric, General Mills and Campbell Soup Co.

As Congress begins the arduous process of cobbling together legislation, it should focus on areas where business, labor and many other groups aligned, said an America’s Agenda board member.

“This is the very best time to be bringing this consensus forward,” said Richard Gephardt, a former House Democratic leader. “We need to start where we agree.”

Inevitably, the process also will involve warfare—like the fight breaking out over whether to tax employee health benefits to help pay for reform.

“If we begin to tax employee benefits … there will be a mutiny at the gates,” MacDonald said. “It would be counterproductive and counterintuitive as well.”

A labor official chimed in on the same point.

“It will be a revolution at the gate, if they talk about taxing existing benefits,” said Terry O’Sullivan, general president of the Laborers International Union of North America.

—Mark Schoeff Jr.

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