Bezos, Buffet & Dimon Aren’t the Only CEOs Fed Up with Rising Health Care Costs

Cisco Systems is going to great lengths to take control of the seemingly unstoppable increase in U.S. healthcare costs. They are just one among a handful of large American employers who are getting deeply involved in managing their employees’ health instead of looking to insurers to do it. Last year Cisco negotiated a plan directly with nearby Stanford Health medical system to offer to their employees.
The plan consists of about a dozen health indicators physicians are tasked with closely tracking to prevent expensive emergencies and keep Cisco employees happy with their care.  If the Stanford physicians meet agreed upon goals they get a bonus. If they fail, Stanford actually pays Cisco a penalty. Sounds like accountability to me. Accountability largely missing from U.S. healthcare, in general.
Cisco has built a spacious clinic on their San Jose campus that is at the center of it all as the first point of contact for many employees and their families.
So far, Cisco says costs for the Stanford plan patients are 10 percent lower than conventional coverage still used by most of its employees.
Chipmaker Intel Corp is saving 17 percent on its employees enrolled in a similar plan, known as Connected Care. Aircraft manufacturer Boeing Co and Walmart Inc, the world’s largest retailer, have also designed health plans for their employees directly with providers.

These meager efforts, with just a few very large U.S. corporations that have signed up tens of thousands of employees so far, reveal the challenges of changing behaviors among patients and doctors. Many employees will still not stray from conventional plans because they like their doctors or worry about losing access to the best specialists.
Even so, these small efforts speak volumes about corporate America’s frustration with relentless rising medical costs and the traditional insurers that sell them health coverage.
Corporations help pay for healthcare for more than 170 million Americans, in most cases working with an insurer to handle everything from the price of treatments to medical claims.
It is estimated that these employers will spend an estimated $738 billion on health benefits in 2018, a figure that has been rising about 5 percent annually in recent years according to federal data.
Of course, Amazon, JPMorgan Chase & Co and Berkshire Hathaway have banded together saying then also intend to do something to improve healthcare and bring down costs for their roughly 750,000 employees, though we still don’t know what this effort actually looks like.
There are certainly challenges a plenty, but I don’t doubt that these hugely successful, innovative businesses will figure out how to crack this nut. Meanwhile, we must keep pushing forward to consumer-driven health care from every angle possible.
Source: Caroline Humer, Fed up with rising costs, big U.S. firms dig into healthcare, JUNE 11, 2018, https://reuters.com