How did one large employer keep its healthcare costs flat for six years? A wide-ranging wellness program, provider bidding and "enlightened consumerism."
At the Jackson Laboratory, a 1,500-employee biotech nonprofit based in Bar Harbor, Maine, healthcare spending became a huge concern in the early and mid-2000s.
With additional locations in Connecticut and California, the company is focused on health sciences research in genomics, but at its flagship coastal Maine location especially, its self-insured health plan was seeing the implications of a confluence of trends leading to budget problems: chronic diseases in an aging workforce and costly regional hospital-based care.
"We were avoiding making an effort," said Wayne Gregersen, Jackson Labs' manager of benefits and compensation, outlining the company's journey at the Maine Health Management Coalition's annual symposium. "We didn't have a business plan."
Since the start of an incentive-based risk screening and wellness plan and numerous other initiatives in 2007, per employee costs per month have held pretty much flat, at around $600, without any across-the-board increases in premiums or deductibles.
Gregersen calls the strategy "enlightened consumerism," with disease screening programs, health coaching and tiered provider networks.
The "cornerstone of the wellness program," borrowed from the Bath Iron Works, a General Dynamics' military contractor, is a "passport" platform through which employees who complete screenings and healthy activities can earn rewards to lower their premiums and deductibles -- $300 for a health risk assessment, $500 for a blood panel, $400 for coaching.
Sometimes, Jackson Labs raffles off screenings or activities, like the chance to win $5,000. "It's much more cost effective and seems to be a more effective tool to get people engaged," Gregersen said. The company, relying on Aetna as its third-party administrator, is also working with the startup Newtopia, which uses gene tests to guide lifestyle interventions for diabetes and metabolic syndrome.
The headquarters of Jackson Labs, near Acadia National Park
Another big factor in the results has been the development of a quality- and cost-based provider network.
When Jackson Labs joined the Maine Health Management Coalition in 2008, HR leaders learned that its costs were 25 percent higher than other employers in the organization. That was in large part "driven by high costs in the local hospitals," which were 50 percent higher than the coalition average, Gregersen said.