Well here's something you don't hear from government officials much these days: Positive budget news. Specifically, the $61 million King County will shave from employee health care costs in 2011 and 2012, money that is desperately needed to maintain crucial public services.
Six years ago, in cooperation with the public employee unions, former Executive Ron Sims kicked off the county's "Healthy Incentives" benefit plan with much fanfare, but little serious attention from the press. Employees were given an option between the county's traditional KingCare preferred provider plan, and a managed care plan through Group Health that focused on improved wellness and shared costs. Well, after six years the results are in, and they're rather dramatic: an average $4,300 savings per employee for the 26 percent of county workers (and climbing) who are currently enrolled in the plan.
"At a time when we Americans are quite frankly getting fatter and sicker, King County employees are getting thinner and healthier," Executive Dow Constantine said today at a press conference announcing the savings, further emphasizing that "We did not do it by just shifting costs to employees, but by partnering with them." It's a lesson that some other public officials might want to study before seeking cost savings through a war on public employees.
And these savings translate to a real and immediate payoff for county residents. The $38 million of savings in the 2012 budget will be distributed to department budgets based on their total FTEs; that means the Sheriff's office will avoid cuts equivalent to 12 deputies, the Prosecuting Attorney will save the equivalent of 7 attorneys, and Public Health will net savings equal to about 20 nurses. That's both real money, and a real impact. There's $7 million in health care savings credited to General Fund departments alone, money that is desperately needed to help offset an estimated $20-$40 million revenue shortfall.
At the same time, participation in the Healthy Incentives program saved employees money, while significantly improving their overall health. The smoking rate dropped 40 percent over the past six years, from 10 percent of county employees down to 6 percent, while more than 2,000 employees classified as overweight or obese at the start of the program lost at least 5 percent of their weight, for a combined weight loss of over 24 tons. That's a win-win-win.
How does the program work? While the plan shares more of the cost of health coverage with employees, particularly for going out of plan and using non-generic drugs, it also incentivizes employees with lower out-of-pocket expenses if they take a health risk assessment and complete a 10 week individual action plan that focuses on physical activity, nutrition, weight and stress management, and smoking cessation. "When employees stay healthy, they need less expensive treatment, and need treatment less often," explains Constantine. And that has created huge payoffs for both the taxpayer and county workers, helping the county reduce the rate of growth of health care costs from 10 percent a year in 2006 to 6 percent today.
Is there a lesson for the private sector, as well as other governments? Yes, says Constantine: "You can get a lot more done working together, than fighting." Again, the sort of positive message you don't much hear coming out of government these days.