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King County Executive
Dow Constantine


King County bending the trend on health care expenses

Summary

Evidence is growing that King County’s Health Reform Initiative appears to be reducing the county’s health care benefit costs. The latest report on the initiative is part of a mounting body of evidence nationally that employee wellness programs in the public and private sector do control costs and improve employee health.

Story

Evidence is growing that King County’s Health Reform Initiative appears to be reducing the county’s health care benefit costs. The latest report on the initiative is part of a mounting body of evidence nationally that employee wellness programs in the public and private sector do control costs and improve employee health.

The trend of annual growth in King County employee health care costs has been reduced from 11 percent per year in 2005 to 9 percent per year meaning the county has spent $18 million less than projected since the program began. The county has one of the highest employee participation rates in wellness programs in the nation.

Incentive-based health plans are an approach Congress is looking at seriously as part of their health reform agenda. A bill introduced by Senator Tom Harkin and co-sponsored by Senator Patty Murray has been wrapped into the health reform package and would provide a 50 percent tax credit to employers that offer a qualified, comprehensive wellness program to their employees. This tax incentive could be an annual benefit of over $1 million to King County.

Says Senator Harkin “Investing in employee health provides returns in lower health care costs and healthier, more productive employees. That is why we are trying to change the paradigm toward more wellness efforts in the health reform bills currently moving through Congress. With employers having such an impact on people’s access to health care and the work environment influencing the lifestyle choices people make throughout the day, it makes sense to encourage more employers to follow the example set by King County.”

“King County is leading the way on improving health and reducing costs through its employee wellness program,” said Senator Patty Murray. “Encouraging wellness and prevention is critical as we work to reform our health insurance system, bring down costs, and increase stability for Washington state families and businesses. I am proud to be a strong supporter of employee wellness programs, and I would encourage other employers to follow King County’s strong lead.”

National experts who reviewed four years of data for the county’s annual report on its Health Reform Initiative urge the county to continue its wellness-based health benefits model. The report tracks results of the program from 2005 through 2008 and is accompanied by validation from independent national experts that the methodology is sound, the results valid and the approach is on the right track.

“King County staff members have used sound and defensible statistical methods to analyze the HRI’s progress in reaching its health and financial goals,” says the quality assurance report by Ron Goetzel, Vice President of Consulting and Applied Research in the Healthcare division of Thomson Reuters. “The changes in King County employees’ self-reported health risk are positive and impressive.”

The report’s findings show that:

  • the county’s health care expenses were $18 million less than projected since the program began in 2005.
  • county employees and their spouses/domestic partners have made statistically significant improvements in 12 out of 14 health indicators including body weight, cholesterol, blood pressure, smoking, and managing stress.
  • participation rates are among the highest in the nation for employee wellness programs. County employees and their spouses or domestic partners covered by the county’s benefits participate at a rate of 90 percent and above.

In addition to spending $18 million less than projected, unions that represent county employees have agreed to $37 million in health benefit reductions over the next three years by increasing deductibles, some co-pays and brand name prescription costs. The wellness program coupled with the employee share of costs being paid at point of service rather than premiums is believed to help contribute to the county’s savings.

In addition to evaluating research methodology, the Health Reform Initiative convened a peer review panel of four national experts to assess the current program design and make recommendations for the future. The peer review panel was “impressed by the cost data,” and found the Health Reform Initiative’s results “amazingly good.”

The national experts urged the county to continue its investment in the initiative and expand its incentivized wellness approach to address chronic conditions. “Employers in the forefront of the best practice employee health initiatives are implementing value-based insurance designs that actively reward members who adhere to recommended treatment plans for chronic conditions,” the report states.

King County’s Fourth Annual Health Reform Initiative Measurement and Evaluation Report is part of a growing body of evidence that employee wellness programs work to reduce health care costs. This evidence is leading many employers to adopt the approach which reduces costs through financial- and behavior-based incentives, instead of simply shifting costs to employees. According to a national survey of employer health plans conducted by Mercer at least 65 percent of employers will offer employees a health risk assessment this year. A recent report on public radio’s “Marketplace” said many employers are cutting back on budgets and staff, but continuing to grow their employee wellness programs because of their potential long-term return on investment

Peer review panelists included Mike Cochran, benefits management consultant, past benefits manager for Washington Mutual and former Puget Sound Health Alliance board member; Peggy Hannon, Assistance Professor, Health Promotion Research Center, University of Washington; Dan Newton, Director, Total Health Management, Resolution Health, Inc.; and, Cindy Watts, Director, Resource Center for Health Policy, University of Washington.

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For the complete Measurement and Evaluation report along with the Peer Review and Quality Assurance Report see https://www.kingcounty.gov/employees/HealthMatters.aspx

For stories from King County employees about how the Health Reform Initiative has supported their efforts to get healthy, visit https://www.kingcounty.gov/employees/HealthMatters/HealthReformInitiative/HealthHeroes.aspx



King County Executive
Dow Constantine
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