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The Real Way to Reform Healthcare
Business Journal

The Real Way to Reform Healthcare

A Q&A with Gallup’s Jane Miller and Jim Krieger

The ongoing public debate about the nation's healthcare system is leaving everyone involved exhausted and anxious. But the problem of rising costs persists, and it is bound to get worse.

In 2009, the United States spent more than $2 trillion on healthcare, a figure equal to almost 16% of the nation's gross domestic product. About half of these costs are privately funded. Although Congress has tried to reengineer the healthcare industry in the United States, businesses are responsible for paying a large portion of the country's rising healthcare costs.

Companies can't afford to wait around while government and industry leaders debate various plans to reduce healthcare costs. And they don't have to, according to Gallup's chief operating officer, Jane Miller, and chief financial officer, Jim Krieger. Organizations have plenty of options at their disposal to stem rising healthcare costs and instill healthier lifestyles for their workforces right now.

Cultivating a culture of consumer-driven healthcare is hard work. But the rewards are worth the effort.


Miller and Krieger are able to demonstrate how creating a company culture of wellness and consumer-driven healthcare can reduce the cost of care while helping employees live healthier, wealthier lives. Consumer-driven care plans and programs place cost and prevention responsibilities and freedoms on the shoulders of employees instead of employers. Companies can take steps to cultivate behaviors that improve individuals' health while decreasing health-related costs for the consumer and the company. This includes investing the necessary time, energy, financial resources, and emotional support to help employees take complete control of their wellness and healthcare costs.

How are Miller and Krieger so sure of this solution? Because at a time when other companies and individuals are paying more for insurance and care, Gallup is creating savings. In this interview, they discuss prudent decisions, unwavering commitment, a clear strategy for creating and sustaining a culture of responsibility for one's health and wellness, and responsible cost awareness and consciousness as the reasons for Gallup's successful consumer-driven healthcare practices.

GMJ: How long has Gallup embraced consumer-driven healthcare? What kind of investment has Gallup made in this effort?

Jane Miller: Gallup has stressed consumer-driven care, wellness strategies, and health education transparency since 2000. That year, the leaders of our organization devised and implemented a six-year plan aimed at reducing healthcare costs for the company and our employees. It was during that same period that Gallup created a robust culture of healthy living and preventative wellness throughout the organization.

Jim Krieger: After the first two years of these efforts, our medical premium rate inflation decreased from 21% and 20% in 2002 and 2003 to just 8% in 2004 -- seven percentage points lower than healthcare inflation trends nationwide. Since then, our annual healthcare cost inflation has averaged just over 2%. That's unheard of on such a consistent basis, based on our conversations with other companies.

GMJ: Why is this considered so exceptional? What sort of return on investment has Gallup realized?

Krieger: Because while comparable annual healthcare cost inflation across the country remained anywhere between 11% and 15% between 2002 and the present, over the last four years of our six-year effort, annual savings have ranged from 8.5% to 12.5% from Mercer Management's annual Health Cost Inflation reports, for a four-year annual average of 10.02%.

Our program participants realize more than half the savings in lower premium rates, and the company saves the other half while continuing to enhance free preventative health options -- all during a time when organizations and individuals are looking to save as much money as possible wherever they can.

GMJ: So how did the company create this culture of consumer-driven healthcare? How did employee behavior play a role in this strategy?

Miller: Cultivating a culture of consumer-driven healthcare seems like hard work, and it is. But the rewards are worth the effort, both for companies and employees.

The top levels of a company's leadership must avidly empower individuals to take control of their health and wellness. This includes helping them understand the costs associated with their health and their lifestyles. Organizations must offer clear and complete communication about ways employees can be more cost-conscious of their behaviors and decisions relative to wellness. And these actions and efforts must be genuine. For Gallup -- and for other companies that are enacting strategies similar to ours -- transforming individuals' behaviors relative to their health is the only way companies and individuals can take control of rising healthcare costs.

GMJ: In other words, if you can appeal to the emotional side of employees' decision making, you can drive home the importance of embracing ownership for their own health and wellness as a way to save on healthcare costs.

Miller: Exactly. Employees must be emotionally invested in their health and in their decisions as an owner of their healthcare costs. Successfully transforming employees' behaviors relies on a company's ability to effectively frame the importance of health and cost-conscious decisions in an emotional way instead of simply communicating the relative value of such choices.

We committed to the education and the tools and the leadership support necessary to change employees' behaviors.


The key to convincing employees of the benefits of this type of plan is explaining outcomes in ways that emotionally resonate with them. This includes helping employees embrace healthy lifestyles and understand the effects of their decisions. By taking an approach based on behavioral economics, organizations can realize real healthcare change and truly enhance the health of their workforces.

GMJ: What tactics has Gallup used to successfully frame consumer-driven healthcare in its workforce? What works?

Krieger: The major focus of our efforts to reform healthcare is on the cost of care. We tend to believe that if employees are responsible for a greater amount of their out-of-pocket costs, they will understand it is in their best physical and financial interest to focus on preventing the most costly chronic diseases and health problems. We offer our employees several medical insurance plans, each of which includes high deductible requirements and allows for health savings accounts and health reimbursement accounts. These accounts allow our employees to decide how much they want to save and how much they want to spend on care.

When we raised deductibles and copays, we hosted company-wide education sessions to show employees a multiyear road map of where we were taking these two shared costs. We took the time to explain the reasons why and the details about the supporting contributions to health savings accounts. We did all this in an effort to move the decision-making power to the individuals and support the first-dollar costs.

By giving them these choices, we feel we are empowering employees to take control of their health and wellness. And the company saves money.

GMJ: But what does Gallup do with the money it saves? Where does it focus those funds?

Krieger: Gallup raised deductibles and copays for plan members, but not drastically all at once. It was more of a steady rise. But we also contribute money to the health savings accounts and reimbursement accounts, and we have added free or near-free proactive and preventative care opportunities at the same time. We invested 100% of our savings and shifted costs right back into the consumer-driven care plans to support preventative measures and allow employees to make their own decisions based on their own needs using the money in their accounts. We committed to the education and the tools and the leadership support necessary to change employees' behaviors.

GMJ: What are some of the efforts Gallup implements to help employees embrace preventative care?

Miller: The amount of money Americans could save in treatment expenses and improved productivity by preventing cases of chronic diseases such as cancer, heart disease, and hypertension reaches into the trillions. The investment Gallup and other companies can make to help employees understand and take responsibility for health prevention pales in comparison to this sizeable sum. That's one of the reasons our company employs the Healthways program, which provides specialized, comprehensive solutions to help people improve their health and reduce care costs.

As Jim mentioned, we give employees financial incentives to join the program. In return, they receive annual biometric health screenings; health risk assessments; personal health reports; and access to lifestyle management resources, coaching, and other tools and materials that provide exercise and nutritional information.

GMJ: Do those exercise and nutrition resources actually prevent health issues and improve wellness?

Miller: Yes. In addition to the resources provided through Healthways, we can attribute our healthier workforce partly to employing full-time professional personal trainers. Their job is simply to ensure a high level of healthy living for any Gallup associate who wants help. We've seen individual employees lose up to 80 pounds, drop more than 75% of their body fat percentage, and transform from couch potatoes to competitive athletes. We provide our employees with these resources because they keep people healthy and prevent avoidable diseases.

GMJ: But Gallup isn't the first company to figure out that exercise and proper preventative care will improve wellness while cutting care costs. What makes these results different? What's the secret?

Miller: There is no secret -- that's the frustrating part. It's similar to explaining why fad diets are exactly that -- fads. There is no substitute for a healthy lifestyle. Plenty of other organizations share the same types of success we have with our consumer-driven care efforts. And it doesn't matter how large their workforces are or how much money they generate in revenue. There seems to be an endless number of ideas and plans companies can implement to help employees improve their health and wellness while cutting care costs.

The solution to the nation's healthcare cost problems won't come from simply shifting the financial burden from one place to another.


GMJ: You mentioned that other organizations have similar initiatives to promote wellness and reduce healthcare costs. Can you give some examples?

Miller: Two organizations with strategies similar to ours have a strong corporate presence in Omaha, Nebraska, where Gallup's worldwide operational headquarters is located. We've learned a lot from Union Pacific Corporation, one of the country's leading transportation companies, and from Alegent Health, a 120-year-old faith-based healthcare provider in Nebraska and southwest Iowa, when it comes to consumer-driven care options.

Union Pacific, which employs 45,000 people, counts among its organizational goals to be the healthiest workforce in America. Why? One reason is safety: They know that people who are more focused on their job and who are generally healthier are going to be safer. Their internal and external studies show health and wellness factors such as weight, stress, depression, and fatigue highly correlate with safety incidences.

So Union Pacific built a fitness facility in its headquarters building in 1988. But that didn't help the employees who called any section of the company's 32,000 miles of railroad track the office, so the company struck deals with more than 600 fitness centers across the country where employees can show their identification and work out free of charge. The company also offers employees the HealthTrack program, a health risk assessment and wellness improvement program targeting ten risk factors such as inactivity, excess weight, and smoking.

The leadership at Alegent Health believes the best and fastest way to improve value and address broader issues within the healthcare industry is to give consumers more information and greater control over how they spend their healthcare dollars. Like Gallup, Alegent offers employees tools, access, and incentives to improve their wellness and care cost savings, including health savings accounts and health reimbursement accounts in addition to PPO insurance options. Alegent offers preventative care free of charge and constantly reminds employees of the positive outcomes relative to focusing on health prevention. This includes measuring participants' wellness efforts and health outcomes using health risk assessments and other surveys.

GMJ: It sounds like you're saying that real healthcare reform will only come through a critical mass of companies and organizations implementing consumer-driven healthcare plans that pave the way for healthier, more cost-conscious employees.

Miller: From our perspective, the solution to the nation's healthcare cost problems and individual wellness issues won't come from simply shifting the financial burden from one place to another. It lies instead in changing the focus from paying a premium to combat problems to embracing a focus on prevention, wellness, and responsibility for one's health, one company at a time.

What if, for example, the top one thousand companies in the United States invested the time, effort, and initial investment required to instill the types of cultures and improvements highlighted in the previous examples? What would the cost/benefit calculation look like? How much money could these companies save in providing consumer-driven healthcare options to their employees? How much money could these employees save if they were healthier? How much improvement would they see in their quality of life? And perhaps most important, by how much could these efforts limit the occurrence of costly chronic diseases throughout these companies' workforces?

We believe companies of all sizes can implement consumer-driven care plans. Organizations can change the healthcare climate themselves, one workforce at a time. It takes commitment from leaders who truly care about the health and wellness of their employees. It takes clear communication with and education for employees about how to make healthy behavioral choices -- and why to make these decisions. And it takes the right framing and explanation of how employees can save money and provide themselves a healthier quality of life by participating in consumer-driven healthcare.

Our company is just one organization, just one employer. The key to extrapolating the successes achieved by companies such as Gallup, Union Pacific, and Alegent Health is getting other leading organizations -- regardless of size or industry -- to step forward, embrace similar strategies, and implement a culture of consumer-driven healthcare. That's when one company becomes one hundred, and then one thousand, and then ten thousand. And that's when things will really change.

-- Interviewed by Bryant Ott

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