Health plan is saving county money
By Steve Herring
Published in News on August 27, 2012 1:46 PM
Wayne County's health care policy, which makes it more expensive to be overweight or a smoker, is realizing savings for the county's health insurance plan and for taxpayers.
Over the past two years, while most insurance plans have been rocked by double-digit increases of 17 to 20 percent, Wayne County has experienced a 7 percent decrease -- about $365,000 annually -- which amounts to about half a penny on the county property tax rate, County Manager Lee Smith said.
About $200,000 in savings last year in the county's self-insurance plan is being attributed to a year-old change in the county policy, which requires tobacco users to pay more money out of pocket upfront for medical costs. Overweight employees were added to that policy as of July 1.
Actuaries have said the county saves nearly $1,200 for every person who goes on the higher-deductible plan because, unlike the tradition plan, the county does not pick up that other piece of the drug or doctor bill -- the employee is paying 100 percent instead of a co-pay.
Employees on that higher tier pay the first $1,500 out of pocket before the plan picks up. The plan still provides a free annual physical.
It is not a "bad plan," but puts more of the decision making in the employees' hands, said Sue Guy, the county's human resources director.
"It is like saying if you are going to accept the risks, then you obviously accept a little more of the cost," Smith said.
Tobacco and weight were targeted because they are the two main issues that are the root or contributing causes of a number of health problems such as high blood pressure or diabetes, Ms. Guy said.
Employees who agree to participate in a weight management program can remain on the lower-cost plan as long as they stay in the program. For smokers, those who went into a smoking cessation program were allowed to remain on the lower-cost insurance plan, too.
"So only those people who had those issues who said, 'You know what? I am not going to do anything about it,' were the ones that were moved to the other (higher) plan," Ms. Guy said. "There has been very little grumbling about it."
Smith and Ms. Guy said they regularly see employees as they head to exercise classes or walking at lunchtime.
"They are taking responsibility," he said. "People, if they are healthy, they are more productive."
Those small changes have major impacts, Smith said.
One employee told Smith that she had stopped smoking, and that she could not believe how many hundreds of dollars she was saving by not buying cigarettes. She said she could not believe how better she felt just walking to her car.
But the changes have not come without some grumbling.
"We knew there would be a little heartache, but the goal is to make sure we had healthier, more productive employees, but also at the very end the county was doing the right thing financially," Smith said. "We have a responsibility to do this right."
"We forewarned everybody at least two years in advance of what was going to roll out on what date," Ms. Guy said. "But what we did was to give them a form that when they went for their annual physical, or the one they have every other year, that they could take that to their doctor. The doctor would decide with them if they were obese.
"Some people knew it was coming and didn't want to be in that category and started some type of weight management program."
Looking at weight also is important because the weight gain could be indicative of a more serious health issue and not just a matter of overeating, Smith said. But in most cases, it is diet and lifestyle, he said.
"The thing I found this year is that we have been able to reduce our costs by a pretty fair amount enabling us to build our reserve, our health reserve that pays pharmaceuticals, pays for hospital visits, surgeries and doctors visits," Smith said.
The savings are rolled over into the plan's reserve, Smith said. The savings are also used to assist with health fairs and incentives so the money comes back to employees, too, he said.
"That is significant annual savings," he said. "If we were in a standalone with an insurance company, and we had the experience we have had, we would have seen a reduction in premiums. Our premium are the same, but we have been able to see our savings and put those saving into this reserve that makes our employees safe, makes the county safe financially.
"We can't see it individually, but when you look at it in general of people having certain medical issues, we are seeing a reduction in that because people are having physicals every two years or more often if they need to. But they also are taking control of issues like weight, smoking, high blood pressure, things of stress. Blue Cross told us this year that this (savings) is unheard of. They said that we are a good example of doing things right."
"We have not seen as many instances of stroke or heart disease that is the main thing," Ms. Guy said. "Too, some the, we call them maintenance drugs, that control your blood pressure, diabetes and those kind of things. As people have lost weight and stopped smoking they have been able to come off some of those drugs."
It also benefits the patients since some drugs can have harmful side effects, Smith said.
Both agree the county is reaping the savings benefit from that which ultimately saves taxpayers.