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HEALTH CARE REFORM: Consumers know best

Bluegrass Institute for Public Policy Solutions

From special sessions for Kentucky government workers to rising prescription costs for seniors, it seems no one has a sufficient answer to skyrocketing medical costs. Almost no one, that is.

Kentucky’s own Logan Aluminum has implemented a consumer-directed health care program that combines preventive care, health screenings and employee incentives. The result has been a high level of satisfaction for the company and its workers and lower costs.

While most firms are facing annual health insurance cost increases of 20 percent, Logan Aluminum decreased its cost by almost 19 percent in 2003. Best of all, the company accomplished these savings while offering employees exceptional service that rivals much larger companies.

Workers have access to a part-time physician and two nurses who are on the factory’s staff. Yet despite these benefits, the company does not require Logan employees to pay a portion of the cost of this insurance plan.

Because of a plan that uses smart incentives while emphasizing preventive measures and healthy lifestyles, Logan employees will average only $440 in total expenses versus an average contribution of $1,500 for employees nationwide.

While the debate over the future of health care has been raging, innovative businesses like Logan Aluminum are addressing the problems of rising costs and employee contributions and declining satisfaction with services. With a new state employee health-care plan that will increase costs by nearly $200 million, Kentucky would do well to follow this example.

“In consumer-directed health care, we have found an approach that provides employees with the health care services they need, helps make our employees wiser, more educated consumers and holds the line on costs,” said Logan Aluminum’s Human Resource Manager Howard Leach while testifying before a congressional committee. “I call that a win-win by any measure.”

Sources:

Testimony of Howard Leach, Logan Aluminum’s manager of human resources

Aetna HealthFund® First-Year Results Validate Positive Impact of Health Care Consumerism, an analysis by Aetna

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