Employers seen holding key to health costs

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Employers must provide incentives that encourage employees to make better choices about health care to cut spiraling costs, D.C.-area leaders said yesterday.

Many of the speakers at the Greater Washington Board of Trade's annual Potomac Conference said incentives were needed to force patients and health care providers to take more responsibility for health care.

"I think you need the carrot and the stick," said Andrew Webber, president of the National Business Coalition on Health. "You, the individual, need to bear the responsibility."

Jane Woods, Virginia secretary of health, recommended a program of "managing health" in which health care recipients would receive an incentive such as a grocery store gift card, phone bill payment or transit card for making healthy choices, such as losing weight or getting prenatal care, which save money in the long term.

"When you come down to it, the biggest costs to us are behavior-driven," she said.

Health care costs increased 14 percent last year and will rise almost the same amount next year, according to a study released yesterday by employment consulting firm Hewitt Associates.

Jodi Fuller, director of health and benefits for America Online, described the success of the Sterling, Va., Internet service provider's Well Baby Program, which rewards mothers-to-be with baby store gift cards for entering and completing prenatal care programs.

"Providing incentives and access to the right kinds of resources will have a positive financial impact," she said. A similar program on disease management for people with chronic conditions such as diabetes and asthma is also showing signs of success.

Mrs. Woods also suggested a few ideas for her own office, from restricting elevator use, which would require employees to take the stairs, to placing healthy snacks in vending machines and raising the cost of the less-healthy snacks.

Another approach is health savings accounts in which employees have a certain amount of money to spend on health care each year that rolls over annually if it is not spent.

"No one spends someone else's money as carefully as he spends his own," said Charles Dalluge, president of Leo A. Daly International.

At least two Texas companies with such programs have dramatically reduced spending while improving patients' satisfaction with their care, he said.

Speakers at the conference, attended by almost 150 government and business leaders, also said health care providers should be held accountable by publicizing information about their rates of success and failure.