Health Care Costs, Prevention and Disease Management – An Employer Mandate

Larry Clevenger MD, Sandia National Laboratories

Controlling Health Care Costs through Employer Driven Initiatives

November 11, 2005

Sandia National Laboratories is a company of nearly 8500 employees providing a diverse set of research, development and application initiatives in support of national security needs. Sandia has had a presence in Albuquerque and Livermore, California for over 50 years and while proud of its facilities and research capabilities recognizes that contributions are made only through the people who call themselves Sandians.

The community of these individuals includes men and women from all ethnic groups and individuals are hired through both national and regional recruiting efforts. As a strategic human resource goal, employees generally stay at Sandia and attrition remains at under 4% annually with most spending their career at Sandia. Considering the number of employees, Sandia is much like a small town. Health behaviors for many lead to life style related diseases. Others experience adverse health events just like others in our local community. Finally, like other employers, costs associated with health care have continued to escalate with expenditures now exceeding $100m/annually for health and welfare benefits.

Sandia is a good employer and does not lament caring for its employees. But the aggregate costs call for creative solutions to assist employees in maintaining a culture of health, assuring the care provided has measurable outcomes reflective of evidence based medicine and that the value of health care dollars spent is maximized to the greatest degree possible. To accomplish this, there is a need for focused and complementary initiatives. These include:

· Creative health plan designs with appropriate cost sharing strategies

· Employee education and movement to increasing skills of employees as consumers

· Professionally designed and managed contracts with TPAs and other vendors

· Establishment of strategic partnerships where possible with provider groups and institutions

· Aggressive sustainable programs in preventive health

· Structured programs in disease management in collaboration with the local medical community

Employees who focus initiatives along these directions can expect improved performance and financial management of their health care plans, increased confidence that dollars are well spent and enhanced productivity of their workforce. Central to this discussion is the recognition of the impact of chronic disease on employers’ bottom line and that initiatives in prevention and disease management with a focus on diabetes and co-morbid conditions will return three dollars for every dollar spent.