How to ground skyrocketing
health care costs?
Being smart consumers is
Imagine this scenario. Let's say you knew your car insurance or
grocery bills were increasing at least 15 percent per year for the
next three years. Would you take steps to reduce costs by: changing
the deductible, shopping around, switching to a midsize car or less
expensive food items, or reconsidering your use/consumption? Probably.
Smart consumers use a variety of techniques to manage their costs.
|Boeing currently spends $1.73 billion
per year on health care benefits for actives and retirees.
Using the word "consumer" in relation to health care may seem odd,
but the concept is critical to slowing the growth of these costs.
The company projects that its health care costs will increase at
a rate of 15 percent-per-year for the next few years. These increases
have a direct impact on the company's competitiveness and financial
So to address these increases, the company, its employees and their
families will need to work together as consumers. First, the companyas
a major purchaseris working to lower the rate of increase
through supplier management and quality initiatives. Second, employees
and their families can help address cost increases by becoming more
proactive "consumers" of health care.
What is Boeing doing?
"Just as our business units are applying 'lean' techniques, we
are looking at similar strategies with health insurance carriers,
hospitals, doctors and support services," said Greg Marchand, senior
manager, Health and Welfare Operations. "There are many opportunities
for improvements across the health care system." Some initiatives
Plan Evaluation: The company evaluates health plans for cost, quality,
efficiency, service and access to providers. Boeing negotiates performance
expectations and eliminates inefficient plans.
Purchasing Leverage: As a provider of health and group insurance
benefits coverage for more than 600,000 active employees, retirees
and their dependents, the company uses its size to negotiate the
best rates available in each market.
Wellness and Prevention: The company promotes health and
well-being as another way to reduce long-term health care costs.
Quality Initiatives: Studies show that medical mistakes
cause unnecessary direct and indirect costs, as well as physical
and emotional harm. Boeing is a member of The
Leapfrog Group (a national coalition of 130+ organizations focused
on reducing preventable medical mistakes)to encourage hospitals
and doctors to improve patient safety and increase public access
Involving people in their health
Actions you can take
Research physicians and hospitals before an
illness or injury occurs.
Comparison shop for medical goods and services. The
Leapfrog Group web site lists other consumer-oriented health
Ask about alternatives.
Ask about medical outcomes and how often a health care
practitioner has successfully done whatever procedure is being
Ask for generic drugs whenever possible.
Use the mail order drug program when taking a prescription
on an ongoing basis.
"People have been 'insulated' from the true costs of medications
and health care," said Laurette Koellner, Chief People and Administration
Officer and member of the Office of the Chairman. "In fact, Americans
have been paying a smaller percentage of their total health care
costs over the last 30+ years. The burden of rising costs has been
shouldered by employers."
Boeing strives to keep employee cost sharing competitive with the
market. Many companies currently have their employees pay 25-35
percent of their total health care costs. Having employees share
in the monthly premiums is a tough decision, but it is one that
most employers made long ago.
As the ultimate "consumers" of health care, employees and their
families can have a significant impact on costs by the choices they
make every day. These actions impact the company's annual expenditures
and help slow the growth of health care costs for employees and
their families as well.