Healthcare Costs

Steven Burd, the CEO of Safeway, Inc. had a really interesting column in the Wall Street Journal a couple weeks ago outlining his company’s approach to reducing healthcare costs.  He included some fascinating statistics that I thought were worth pointing out:
  • Healthcare spending will represent 18% of GDP in 2009
  • 70% of all healthcare costs are confined to four chronic conditions (cardiovascular disease, obesity, diabetes and cancer)
  • Most instances of the above conditions are preventable
Safeway’s approach to reducing costs is simple.  They reward employees financially for taking preventative measures based on the four chronic conditions listed above.  If they pass a baseline test on each of the four factors, they can save as much as $780 and $1560 for families.  

Based on the work I’ve done in this area, it seems that it’s nearly impossible to generate reliable correlations between investments in promoting healthy behaviors and reduced healthcare costs for companies.  But I think it’s nearly impossible to doubt Safeway’s investment is a long term win employees, the company and the public.