Safeway Creates a Proactive Healthcare Coverage Model

Supermarket giant Safeway, Inc., takes a proactive approach to its healthcare coverage and is in the forefront of the movement toward reform, according to Steven A. Burd, CEO.

Safeway’s voluntary Healthy Measures program, in which 74 percent of the non-union workforce participates, lets employees receive premium discounts for every behavior test they pass.  Employees who pass all four tests have their annual premiums reduced $780 for individuals and $1,560 for families.safeway_cart

Burd, who also founded the Coalition to Advance Healthcare Reform, believes that well thought-out healthcare reform, using market-based solutions, will reduce the nation’s cost of coverage by 40 percent.  That is more than enough to provide coverage for the 47 million Americans who currently lack insurance.

According to Burd, “At Safeway, we are building a culture of health and fitness.  The key to achieving these savings is healthcare plans that reward healthy behavior.  As a self-insured employer, Safeway designed a plan in 2005 and has made improvements every year.  During this four-year period, we have kept our per capita healthcare costs flat (this includes both the employee and the employer portion), while most American companies’ costs have increased 38 percent.”

Safeway’s plan focuses on the fact that 70 percent of healthcare costs are the result of behavior, and that 74 percent of all costs are due to four chronic conditions – cardiovascular disease, cancer, diabetes and obesity.  The firm also learned that 80 percent of cardiovascular disease and diabetes, 60 percent of cancers and 90 percent of obesity are all preventable.

“As much as we would like to take credit for being a healthcare innovator, Safeway has done nothing more than borrow from the well-tested automobile insurance model,” Burd said.  “For decades, driving behavior has been correlated with accident risk and has therefore translated into premium differences among drivers.  Stated somewhat differently, the auto insurance industry has long recognized the role of personal responsibility.  As a result, bad behaviors (like speeding, tickets for failure to follow the rules of the road, and frequency of accidents) are considered when establishing insurance premiums.  Bad driver premiums are not subsidized by the good driver premiums.”

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