The Safeway Effect - Saviors of American Healthcare?

This entry is crossposted at the World Healthcare Congress blog.

Day 2 kicks off bright and early (8am start) with the Healthways Band Strat 5 belting out “Here I Am Baby.”

The good morning America musical interlude is followed by Safeway CEO Steve Burd taking the stage.

Steve bounds up out of his chair to take the podium. He’s a great metaphor for his company - these guys just can’t sit still. The grocery chain is doing some of the most innovative things in today’s healthcare economy.

This isn’t my first time following Safeway - when the company introduced the FoodFlex program for consumers, Health Management Rx broke that story here.

When the organization discovered a 10-fold difference in the costs of care for a procedure within a 30 mile radius of corporate HQ, they decided to develop an internal measurement for ‘cost effective’ services. Employees can find a list of cost-effective providers by zip code.

As with other services provided by the Safeway plan, workers are welcome to go ‘outside’ the hub, but they’ll pay extra to stray from the corporate medical home. Safeway’s argument is this: Give employees financial accountability for healthcare choices and they’ll begin to make healthier decisions.

Steve uses some interesting real-life examples of how the Safeway plan impacts employee behavior:

  • A staffer had a bowl of Hershey’s kisses sitting on a desk. The bowl was removed because it was “not consistent” with the goals (no word on whether the employee who brought the chocolate on board removed the bowl).
  • In the Safeway cafeteria, an employee can order whatever food they want (”cheeseburger, onion rings”) but they’ll pay “full market price.” Healthier meal options are actually subsidized by Safeway.

Some of Hurd’s graphics representing quantitative are a bit surprising - the assertion that 80 percent of Type II diabetes is preventable or reversable, for instance. These figures definitely bear closer examination.

The grocer is tackling corporate wellness engagement at the individual level with healthy meal subsidies, but they’re also creating larger groups to motivate each other.

Workers getting each other involved helps alleviate the faint taste of ‘1984′ that lingers…this is exciting stuff, but its also a large employer thrusting themselves between staff and the system. Do the benefits outweigh the risks of this positioning?

Safeway is concretizing the competitive drive for employees to be connected with care (and with each other) - they’ve organized 7 health and wellness teams. When Steve reports corporate earnings this Thursday, he’ll also report on progress of the teams.

This morning Steve announced an initiative that “may be an American first” - the creation of an employer funded, employer managed medical concierge coordination service created for cardiac disease and cancer – employees can call and they will be walked through the process of treatment at major treatment centers.

Steve also thinks labor unions are a natural partner in employer-driven wellness initiatives.

Both parties, he explains, are concerned about skyrocketing healthcare costs putting the squeeze on the bottom line. Unions want those dollars to go towards higher wages - companies want them back in the kit for investment and growth.

It’ll be interesting to see who Safeway hooks up with next in its single-handed drive to improve healthcare.

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