Lowering Health Care Costs by Empowering Employees

We have all heard the Greek philosopher Plato’s saying: “Necessity is the mother of invention.” Plato rightly observed that problems encourage creative efforts to meet the need or solve the problem. Necessity can also be the mother of innovation as was the case when the new county executive in Manitowoc County in Wisconsin realized that insurance premiums for the county’s 600 employees were doubling every five or six years and were approaching $20,000 a year per employee.

Bob Ziegelbauer, Manitowoc County executive and a Democratic state representative from the 25th Assembly District, wrote about efforts to deal with this issue in an op-ed piece published in the Oct. 28, 2007 editions of the Milwaukee Journal Sentinel. Ziegelbauer wrote that if something hadn’t changed, and soon, Manitowoc County government would have been forced to make wholesale cuts among the very employees it depended on to provide important services. So they looked at the predictable approaches: increasing the employee share of premiums and top-down managed care. What they found is that the constraints of collective bargaining in the public sector made those options nearly impossible to accomplish in a way that made any sense.

What next? Thinking outside the box, the county asked their insurers for quotes on a Health Savings Account-qualified program. Using HSAs, employees control their own health care decisions and get to keep (tax-free) any money left in their HSA not used for health care expenses.

Ziegelbauer wrote that the quotes they received “blew his mind.” They were presented with cost savings of more than $7,000 per year on a family plan and better coverage than the current plan. They were also able to offer our employees $3,000 in a fully funded health savings account. This account became their personal property, and with the money the county saved, we also eliminated more than $4,000 in employee costs for co-pays or premiums.

All that, Ziegelbauer writes, and the county was still able to save taxpayers nearly $2,600 per family plan while paying for free preventative care and providing financial incentives for participating in a variety of wellness programs, ranging from health assessments to weight loss and smoking cessation.

The power of the plan, according to Ziegelbauer, is in empowering the insured. He said it is the power of individuals making decisions affecting their own lives with their own money. “Because we all have so much at stake, we are aggressively educating employees to make them healthier people and better consumers.”

The moral of this story, according to Ziegelbauer, is that the county’s employees are healthier, wealthier, more knowledgeable and happier because of the new health plan. At the same time, costs are contained for our taxpayers now and into the future.

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