In a speech to the World Health Care Congress this week, Safeway chairman/president/CEO Steve Burd suggested that companies looking to control health care costs ought not wait to see what kind of reforms the Obama administration is able to get passed, but rather should model their own programs on what Safeway has been doing.
"If you are part of a large organization, you really don't have to wait for government to do anything," Burd said. "You can design your own healthcare reform.”
Burd said that the Safeway approach – which is to make employees responsible for living healthier lifestyles, including losing weight, stopping smoking, while rewarding them for positive steps – has saved the company millions of dollars. "We took advantage of a little-known fact; that is that 70 percent of healthcare costs are driven by behaviors," Burd said.
Safeway’s program – which has 75 percent buy-in from nonunion employees – essentially gives discounts on health insurance costs to employees who attain and maintain certain minimum standards, while those who do not meet established levels pay more for health insurance premiums. And while Safeway spends $1 billion a year on health care costs, that number has not gone up since 2005.
"If you are part of a large organization, you really don't have to wait for government to do anything," Burd said. "You can design your own healthcare reform.”
Burd said that the Safeway approach – which is to make employees responsible for living healthier lifestyles, including losing weight, stopping smoking, while rewarding them for positive steps – has saved the company millions of dollars. "We took advantage of a little-known fact; that is that 70 percent of healthcare costs are driven by behaviors," Burd said.
Safeway’s program – which has 75 percent buy-in from nonunion employees – essentially gives discounts on health insurance costs to employees who attain and maintain certain minimum standards, while those who do not meet established levels pay more for health insurance premiums. And while Safeway spends $1 billion a year on health care costs, that number has not gone up since 2005.
- KC's View:
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Burd and Safeway have been pioneers in this area, and deserve a lot of credit for focusing attention on a basic truth: people ought to have responsibility for their own health. Living a healthy lifestyle has all sorts of implications, from personal happiness to professional productivity. If you’re going to work from the premise that when a company employs an individual it is making an economic investment in that person, then it has a right to expect that the employee will be equally invested in the experience…and that means behaving responsibly.
It’s not a popular approach in some circles, but Burd gets kudos here for facing it head-on.
