Thursday, December 29, 2005

Prescription for profits

Most CEOs in this country aren't smart enough to look past tomorrow. If they were, this would have been widely implemented a long time ago. But even with evidence and common sense pointing them in the right direction, it will take years for this to become the rule instead of the exception. After all, most of these people still think there's something to be gained from enforcing dress codes.

If employers would pay more for their employees' prescription and nonprescription medicines, workers and companies could spend less on health care.

It might sound like a radical idea -- spending more for drugs now to save money later -- but the concept is simple: Employers would have more productive workers who would require medical care less often and need fewer days off if employers pay for the medicines that keep employees healthy.

Pitney Bowes Inc., for instance, has saved more than $1 million each year since it cut co-pays for diabetes, hypertension and asthma drugs. The city of Asheville, N.C., reduced the average annual cost of care for its diabetic workers by $2,000
per person as soon as it started paying the whole cost of diabetes drugs. After the success with diabetes, the city added hypertension and asthma programs and
saw similar positive results. And both employers report that the programs have cut employee use of sick time and short-term disability.

"We asked our employees what happened," said Pitney Bowes corporate medical director Dr. Jack Mahoney. "They said the price came down so they got their medications. ... Really there is no rocket science here. If you encourage people to be well and you provide a service, but you put an access barrier there in terms of cost, you have just limited your success rate."

Many businesses are used to reducing health-care plan costs by charging employees higher premiums, deductibles and co-pays. It has worked to slow increases, in some instances.

But researchers at Harvard Medical School and Medco Health Solutions Inc. report that higher co-pays can also discourage employees from filling prescriptions for medicines that could prevent serious -- and expensive -- health complications.
Makes sense. After all, look how great the economy is doing after years of layoffs, eliminating benefits and raises that don't keep up with the cost of living. Look how well these short-sighted, unenlightened policies have kept profits up.

This is an important story for executives to read because the only way you're going to get their attention is to show them that this approach will maximize profits. That it's the right thing to do from a human decency standpoint is irrelevant.

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