strategy+business is published by PwC Strategy& Inc.
 
or, sign in with:
strategy and business
Published: October 29, 2010

 
 

Beer, Brats, and Butterfat

Kurt is a healthier, happier guy. His employer will benefit from a more productive worker. His family’s budget will be less strapped, and the company’s bottom line will be healthier than it would have been had he not made a course correction.

It’s a win for everyone but the providers who would have profited had he become sick.

Despite all kinds of talk about prevention and wellness in the medical world, incentives are missing for providers to get serious. Most health systems and insurers make token efforts at wellness education and prevention, such as brochures and passive Web sites. They are largely inert.

In that vacuum, payers like Serigraph have no choice but to take on the challenge themselves, to be very proactive on health management. A principal tool that we deploy is our annual free mini-physicals, known as a Health Risk Assessment (HRA). The annual process invariably surfaces several time bombs — urgent health conditions that need addressing immediately.

Kurt’s situation was not an emergency, but another co-worker faced a more imminent threat. That person recorded a PSA reading of 7.5, a high number that indicated prostate cancer. Fortunately, it is a cancer that is very treatable if caught early. While the Health Risk Assessment yielded unwelcome news, he visited an oncologist that same week. His subsequent treatment was successful. His renewed health was the best outcome. Another positive outcome was the reduced cost to him and the company. Early treatment is less expensive than dealing with a full-blown disease. It also saves lives.

We feel so strongly about the necessity of an annual mini-physical that we make them virtually mandatory for employees and their spouses. If you want to be in our health plan, we believe the least you can do is to take the annual physical. You can opt out, but you then pay the full premium for your annual care.

The mini-physicals are not expensive. We contract with our on-site provider, which charges us $45 per person. Using our own nurse practitioner also has the benefit of helping her establish a trusted relationship with our people. Privacy laws in the United States prevent anyone in the company from knowing about those individual conditions, except for the nurse and a benefits specialist. So the nurse is the one who runs the coaching process.

As a bonus, the aggregate health of our group of employees and spouses can be monitored and managed. It’s a by-product. Company managers can analyze group data without invisible individual data. Again, what you measure is what you get, so Serigraph keeps close track of the biometrics of its population.

For example, doctors now want to see patients below 200 for overall cholesterol, so we track that. We know our average cholesterol number in 2003 was 209. We know that it dropped to 200 by 2006 and has now been reduced even further to 193.

We measured our average systolic blood pressure in 2003 at 128, and we watched it drop by 2006 to 120, the latest target for good health. We saw the same progress on our diastolic reading.

It took Serigraph a couple years to come to the perfectly obvious truth that health costs can’t be managed without managing health. Duh! 

— John Torinus Jr.

Copyright 2010 by John Torinus Jr. Reprinted with permission of BenBella Books Inc.

 
 
 
Follow Us 
Facebook Twitter LinkedIn Google Plus YouTube RSS strategy+business Digital and Mobile products App Store

 

This Reviewer

  1. Regina E. Herzlinger, the Nancy R. McPherson Professor of Business Administration at Harvard Business School, is a leading healthcare expert. She is the author of seven books, including Who Killed Health Care? America’s $2 Trillion Medical Problem — and the Consumer-Driven Cure (McGraw-Hill, 2007) and Consumer-Driven Health Care: Implications for Providers, Payers, and Policymakers (Jossey-Bass, 2004), which received the 2004 American Journal of Nursing Book of the Year award for history and public policy.

This Excerpt

  1. The Company That Solved Health Care: How Serigraph Dramatically Reduced Skyrocketing Costs While Providing Better Care, and How Every Company Can Do the Same (BenBella Books, 2010), by John Torinus Jr.
  2. John Torinus Jr. is the chairman of Serigraph Inc. He headed an investment group that purchased the company in 1987, and served as its CEO for 20 years. Previously, he was a newspaper journalist, editor, and general manager.