For the fifth time in eight years, co-workers at Serigraph Inc. will see no premium increases for the coming year. That is a remarkable accomplishment when double-digit increases are the norm cross the country. It has happened because the employees at our self-insured company are engaged as intelligent consumers of health care; they are not passive recipients. Their efforts have helped to contain our 2010 costs per employee for medical treatments and drugs to about $6,785. That compares to the national average, as reported by the Kaiser Family Foundation, of $11,341 per employee. With our all-out attack on health costs, we are 40% below the U.S. average. Further, the Milwaukee region where we are based always ranks above the national average. So, our results are even more noteworthy.
The campaign at Serigraph, the subject of my book, is based on employee engagement. That’s the silver bullet, without which no system can operate successfully. The compact with the employees revolves around a 75-25% employer-employee split of costs, about the national average for companies. That’s how the premium is divvied up for the coming year. We take the total costs for the previous year, divide by the number of employees and then assign 25% to employees as their premium. Obviously, if we neutralize the costs together in a given year, the employer and employees dodge a premium increase the year later. Our 2010 costs projects to roughly the same level as 2009 costs.
Since we embarked on a consumer-driven health plan (CDHP) in 2003, we have had to raise premiums only three times in the ensuing eight years. Other reforms beyond CDHP have been added over that period, all with the purpose of deeper engagement of co-workers as intelligent players in a complex system. We have always asked our people to “Help Run the Company.” We want them to make bold decisions in their areas of responsibility. Now we are asking them to help manage our health delivery system. It’s working.