Safeway executive, panel explore answers; huge challenges remain

SANTA ROSA, NORTH BAY –Employers occupy a vital role in transforming the U.S. health care system, not only as a payer but also with its influence, attendees were told Wednesday at the Business Journal's annual health care conference.

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This theme and others were central to the Nov. 11 Health Care Solutions that Work event, which featured a discussion of Safeway Health’s nationally recognized cost-containment program and a comprehensive panel on health reform legislation by local health, law and insurance experts.

“It is important that employers recognize that they have a role and the potential to improve the health of their employees,” said Ken Shachmut, keynote speaker and executive director of Safeway Health.

In the first hour of the event, Mr. Shachmut described the statistical magnitude of lifestyle choices on health care costs and what businesses can do to reverse the trend. In addition to incentivizing healthier behaviors, Safeway introduced transparency in pricing, where procedures can cost as much as ten times more from one facility to the next.

“Imagine walking into a grocery store where nothing has prices listed and you don’t find out how much it costs until you get your Visa bill. This is how the health care system works, and people accept this not only because we do not have an alternative, but also because the employer is footing the bill,” he said.

By identifying the lowest cost for certain procedures and only reimbursing up to that amount, Safeway has successfully held down costs and saved more than $150 million since the program was launched in 2005. At the same time, employees that improved their health indicators saved about $1,600 a year.

The company is now working to create Web sites with pricing information that employers from various regions across the United States could use.

In the second half of the morning event, a panel of local experts discussed federal health care reform from three different industry perspectives.

Sonoma County Department of Health Services Public Health Officer Mary Maddux-Gonzalez led the discussion with a review of changes made at the local level by the Sonoma Health Action Council.

Entering its third year of work, the council has commenced implementation of three initiatives related to increasing access to healthy food, encouraging more physical activity and most importantly, according to Dr. Maddux-Gonzalez, increasing access to primary health care.

“On the federal level, addressing the misalignment of reimbursement for primary care physicians is crucial,” she said.

Sonoma Health Action "has focused much of our efforts on increasing access to preventative health care, but until the cost reimbursement structure is addressed, it will be difficult to sustain our supply of family doctors in the future.”

Gaw Van Male attorney and health care law expert Ken Brock provided the most recent assessment of House, Senate and finance committee health care reform bills. Each varies in implementation, but he said the key components are similar: an individual and employer mandate, assistance in purchasing insurance, reducing the cost of coverage and increasing market competition. Mr. Brock said he does not expect anything to pass until after the New Year, and it’s still possible nothing could pass at all.

“There is an old expression that says for those who appreciate good democracy and good sausage, don’t watch either being made,” he said.

Redwood Regional Medical Group Chief Executive Officer Wayne Fairchild described how health care cost shifting has essentially forced physicians to consolidate and merge.

“So far, nothing I have seen out of the capitol has addressed what is happening in health care delivery, and I think they really need to make sure physicians are at least at the table.”

Sitzmann Morris & Lavis consultant Victor McKnight closed the panel with a current assessment of private health insurance pricing and how draft reform bills could affect future pricing.

The panel was moderated by Dr. Gary Greensweig, chief medical officer for St. Joseph Health System Sonoma County, which underwrote the event along with Kaiser Permanente, Sutter Health Partners & Sutter Medical Foundation North Bay and Redwood Regional Medical Group.