Safeway and US Healthcare

The WSJ has an article how Safeway cut its healthcare costs by making employees be more careful about the costs of their healthcare visits. The journal notes:

We're going to go out on a limb and guess that the scheme has its critics and flaws, but this sounds like the right idea. Use insurance as it's meant to be used (as protection against rare events, so that you don't get financially wiped out when you get hit by a car on your bike) and then create real incentives to stay healthy and reduce costs on the routine stuff. What's great is that it doesn't even sound like something that needs anyone's approval. Any company, looking at the Safeway model, should just be able to up and do it.

Insurance is meant as catastrophic cover, not routine healthcare, and in this the WSJ is correct. This is one of the reasons that US healthcare is so inefficient cost wise. The other problem is that there is no price transparency in the US in relation to healthcare. You cannot get a direct quote of cost out of anyone. Companies adopting policies like this might improve that aspect of the health system.

The culture of health is a good one. In this office we do mad mile time trials and one of the fellows just started training for a triathlon sprint which others in here might do as well (including me). The office here has a culture of fitness and strength, but it isn't because of the company, it is because of the personalities here. Recently when a new CTO came and did a video conference call with all the people in Phoenix, seven of us (out of a total of fourteen) were absent because we were at the gym.

The main problem with the US healthcare system though is that companies are paying for it. The WSJ doesn't ask this question. It stems from World War II and the Norfolk docks in Virginia where labor was excessively tight and ships needed to be built in lightning fast time. The employers there started offering healthcare as an incentive to get the best labor. Now it is an assumed right that companies will pay for health care which has led to one of the most inefficient health care systems on the planet.
Permalink, Safeway and US Healthcare, Jun 2009, cam

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