Leaders of a New School of Thought
Amid all the confusion and bitterness over rapidly rising health-care costs, one company is putting its stamp on innovative solutions: Pitney Bowes Inc., the old Stamford, Conn.-based postage meter maker.
For any of its employees with chronic conditions, such as diabetes or heart trouble, the company cuts co-payments for prescription drugs as an incentive to take the medicine regularly. “That reduces disability, health system usage and workers’ comp,” explains David Hom, the vice president in charge of the firm’s benefits programs.
In addition, Pitney Bowes operates eight primary-care centers for its 22,000 U.S. employees, where doctor visits are essentially free.
All of this attention to preventive care is paying off: Pitney Bowes’ medical costs are about 8% lower than those at comparable office product companies such as Connecticut neighbor Xerox Corp., Hom says.
Perhaps most important, Pitney Bowes also is taking steps to make sure that none of its employees is left high and dry when a medical emergency arises. With this in mind, the company reduces premiums for lower-paid workers and raises them for the highly paid.
On average, Pitney Bowes picks up 80% of the cost of employee health insurance, but it pays as much as 90% for those at the lower rungs.
Such a common-sense approach to medical coverage came to mind this week as thousands of grocery workers across Southern California hit the picket lines to protest a proposal by the three big supermarket chains -- Kroger Co., Safeway Inc. and Albertsons Inc. -- to scale back their health-care benefits. United Food and Commercial Workers, which represents the pickets, is determined to preserve a setup whereby union members pay the best-possible price for full family health insurance: nothing.
But the companies, like those in other industries across the country, say they can’t afford that in the face of double-digit health-care inflation.
Given that reality, it is clear that new kinds of thinking -- such as that happening at Pitney Bowes -- are required to bring medical costs under control while maintaining quality of care for all workers.
Getting there, however, won’t be so easy. Pitney Bowes is a nonunion operation, which gives it a flexibility in its benefit plans that the supermarkets simply don’t enjoy.
The “fundamental issue in health care today is that one size does not fit all,” says Schumarry Chao, a physician and benefits consultant who is vice president for strategic planning at County-USC Medical Center.
Unions, though, are all about one size fitting all. “I think the whole point is that we negotiate on behalf of whole groups,” says an AFL-CIO spokeswoman, “not some persons or groups categorized by disease or income.”
Pitney Bowes is not the only company pushing for treating its employees differently depending on their circumstances. The Washington Business Group on Health, a group of 200 major employers and insurance firms, is advocating the same arrangement.
Insurance plans that divide costs between employer and employee “can be flexible, with different tiers of premiums based on income,” says Helen Darling, president of the Washington Business Group.
For its part, the supermarket workers union isn’t unmindful of soaring medical costs and the way they are pinching the employers’ bottom lines.
“We have worked with the companies for cost containment,” says Greg Conger, head of the UFCW’s Local 324 in Orange County. He points out that the union has sanctioned limits on chiropractor visits and agreed to changes in alcohol and drug abuse treatments in a bid to trim medical expenses. He says that the union also is “willing to have co-pays on HMOs and on visits to emergency rooms.”
Indeed, says Conger, the real question is not whether there will be modifications in the next labor contract but whether “we are taking a scalpel or a chainsaw to it.”
But even with all that, it’s obvious that more needs to take place -- specifically, more thinking out of the box. Why have the exact same insurance scheme for a checkout clerk who makes $17.90 an hour and a bagger who is pulling down only $7.40?
As Chao makes plain, the stakes are high, and they’re going to get only higher. “Today, the battles for payments are over $100-drugs like Celebrex,” the arthritis remedy, she says. “But tomorrow it will be over genetic treatments that cost $10,000 to $20,000.”
Companies such as Pitney Bowes may not have all the answers. But they surely are a voice worth listening to, especially as supermarket pickets shout and car horns blare.
James Flanigan can be reached at jim.flanigan @latimes.com.
