Reining in Healthcare Costs: One Company’s Success Story.
Laura Putre Fri, 2017-06-23 15:58.
Healthcare costs at manufacturer Maclean-Fogg have risen 7.5% total since 2009—when, for most companies of that size, 7.5% per year is closer to the norm.
Most of the time, Tim White isn’t particularly effusive, but hit on the subject of how he keeps healthcare costs down at his company, Maclean-Fogg, and the words rain down in bucketfuls.
“You can cut me off, because people tell me I tend to be a little overly passionate on this stuff,” says White, who is the corporate benefits manager for the $1 billion+ manufacturer of vehicle components and power systems products.
Formerly a consultant to Fortune 500 companies on compensation and benefits, White was brought in to Maclean-Fogg in 2009, when the company decided to go self-funded on its healthcare benefits. Since then, healthcare costs at the company, headquartered in Illinois,have risen 7.5% total—when, for most companies of that size, 7.5% per year is more the norm.
White and Kristen Malbasa, Maclean-Fogg’s vice president of human resources shared their secrets for keeping the overhead reasonable, without passing costs on to employees.
“We don’t believe in cost-shifting,” says White. “What we’re big on is controlling the top number—what the total dollar is going to cost.” The employee share of the premium is 28%, up from 24% in 2009, and “a lot of that has to do with employees shifting to higher-deductible plan and health savings accounts,” he says.
Consolidating Plans
To get started, White mapped out a five-year plan for Maclean-Fogg to manage its self-funded healthcare. “This is a $20 million spend for us, so somebody better be managing it,” he says.
The first task at hand: Muchsimplifying. Acquisitions and expansions over the years had the company juggling 39 different plan designs. White pared that down to six across all of its operations: three union, three non-union. “There was a lot of head-scratching,” White says. But most plans were so similar—maybe $100 difference in deductible but nearly identical in design—that he was able “to take the ones that matched the closest and start to knock ‘em off.”
BlueCross is the company’s insurer—for now, it has the best network of doctors across Maclean-Fogg’s footprint. But White says he’s constantly running claims through other systems—Cigna, United Healthcare, Aetna—to keep tabs on which PPOs have the best discounts and physician access.
Establishing On-Site Clinicians
As part of the plan, Maclean-Fogg brought on wellness clinicians for each of its locations. These RNs and nurse practitioners, some with occupational credentials, work from a few hours a week at smaller locations to full time at the largest sites. A third party employs them, to comply with HIPPA law preventing employers from having access to employee medical records.
They do routine bloodwork and treat minor ailments (if they’re nurse practitioners, they can write prescriptions), cutting down on missed work time and improving productivity. “There’s a savings that’s associated with it—that if an employee isn’t feeling great, they’re able to see the nurse practitioner to be diagnosed and determine whether they need to go somewhere else and seek treatment,” says Malbasa.
The on-site clinicians are also the go-to people for employees with chronic health conditions who need things like regular blood pressure checks, or who just want to talk to someone about how they’re doing or ask for advice. If an employee needs an MRI or has to take a child to the hospital for a broken leg, a clinician can give them a quick cost comparison.
“It’s all about handholding in a time of need,” says White. “We know that employees are very complacent: ‘I take medical coverage because I have to.’ They’re not paying attention until something happens.”
During her first pregnancy, Malbasa checked in with the on-site nurse practitioner weekly. “I had a lot of questions,” she says. “So every Wednesday, we’d talk. Sometimes she just checked my blood pressure, and we talked about multivitamins and all of that fun stuff. It was very helpful having her to talk to between my regular doctor visits.”
Using Data Analytics
Through an outside firm, USI, Maclean-Fogg aggregates data from employee biometrics, medical and prescription claims and health-risk assessments, and applies it to identify health trends among its employees and predict potential problems. White says it took him three or four years to find the right vendors and consultants and build a good database. “I want to manage the consultants,” he says. “I don’t want the consultants managing me.”
He wants to understand what’s being spent, and more importantly, what’s going to be spent. Meaningful analytics will give you information about your population’s health that will help you predict what will happen in the future, White says. “And from that, you can start making decisions on stop-loss coverages, plan designs and those type of things.”
The analytics, for instance, tell him that a disproportionate number of employees are diabetic at Metform, Maclean-Fogg’s auto components site in Savanna, Ill. Or that at another site, hypertension is a problem. Armed with the data, the company and its clinicians can build site-specific programming around particular risks. And, sometimes, give site managers a wakeup call.
“We get all this data and start feeding it to the locations, and the next thing, they go, ‘Holy cow!’ and they’re changing their vending machine locations, and the food that they bring in for their lunch meetings significantly changes,” says White.
A recent look at the numbers revealed that a whopping 70% of Maclean-Fogg employees had had a prescription for opioids in the past 12 months. White says they’re still figuring out what exactly to do with that bombshell.“We questioned our HR managers at the locations, and not one employee has come forward and said, ‘I can’t run my machine today because I’m on this drug,’” he says.
Not that they’ve been idle in trying to address the problem: A recent company wellness newsletter was devoted to opioid addiction, and other plant literature and lunch-and-learns have tackled the topic. White and his team are also working with HR people at the plants to make sure they understand “what happens when an employee comes forward and says, ‘Hey, I’m on this drug for the next couple of days—can you give me something other than a machine to run?’”
Another telltale piece of analytics: How many plan members are on diabetic medication, versus how many people are purchasing insulin testing strips (through their Rx plan). According to the numbers, many diabetics weren’t testing. “Based on that, I had my pharmacy management company [Envision Rx] do a mailing and start surveying those folks: ‘Why don’t you test?’” says White. He had been thinking about offering the test strips for free, but changed his mind when the survey came back saying cost wasn’t an issue.
Tying It All into a Wellness Program
The on-site clinicians, the company newsletter, the analytics, the lunch-and-learns—they’re all part of the companywide wellness program, You+. In exchange for premium discounts, employees have their biometrics tested and go online and do third-party health risk assessments. They sign a waiver allowing the clinicians to coach them on the assessment results.
Other wellness activities include Biggest Loser-style competitions, walking groups, gym discounts, health fairs and visiting nutritionists.
“We don’t usually reward people for results,” says White. “We reward people for participating.”
Summary of NLRB Decisions for Week of June 12 – 16, 2017.
The Summary of NLRB Decisions is provided for informational purposes only and is not intended to substitute for the opinions of the NLRB. Inquiries should be directed to the Office of the Executive Secretary at 202‑273‑1940.
Summarized Board Decisions
United States Postal Service (07-CA-145159 and 07-CA-159684; 365 NLRB No. 92) Detroit, MI, June 12, 2017.
The Board adopted the Administrative Law Judge’s conclusions that the Respondent violated Section 8(a)(5) and (1) by unreasonably delaying furnishing information about light-duty employees’ work restrictions, unreasonably delaying furnishing information used to establish a seniority list, and refusing to furnish information regarding how it compiled another seniority list. In adopting the judge’s finding that the Respondent unreasonably delayed furnishing information about the light-duty employees’ work restrictions, the Board did not rely on the judge’s suggestion that the Respondent “waived” its right to bargain over how to protect the employees’ confidential medical information. The Board also affirmed the judge’s recommended remedial Order, including district-wide notice posting, and found that the judge did not err by declining to recommend a broad cease-and-desist order or by failing to extend the order to apply to “any other labor organization.”
Charges filed by Branch 256, National Association of Letter Carriers, AFL-CIO. Administrative Law Judge Christine E. Dibble issued her decision on December 2, 2016. Chairman Miscimarra and Members Pearce and McFerran participated.
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Howard Industries, Inc. (15-CA-131447; 365 NLRB No. 96) Laurel, MS, June 13, 2017.
The Board adopted the Administrative Law Judge’s recommended order dismissing the complaint and deferring to an arbitrator’s award upholding the discharge of a union steward for violating plant rules. In so doing, the Board adopted the judge’s finding that, applying the Board’s prior standard for deferral under Olin Corp., 268 NLRB 573 (1984), the arbitrator had adequately considered the unfair labor practice and his award was not repugnant to the Act.
Charge filed by International Brotherhood of Electrical Workers, Local Union No. 1317. Administrative Law Judge Keltner W. Locke issued his decision on September 24, 2015. Chairman Miscimarra and Members Pearce and McFerran participated.
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Lenawee Stamping Corporation d/b/a Kirchoff Van-Rob (07-CA-168498 and 07-CA-172535; 365 NLRB No. 97) Tecumseh, MI, June 14, 2017.
The Board adopted the Administrative Law Judge’s conclusions that the Respondent violated Section 8(a)(5) and (1) by making a midterm contract modification by granting raises to unit employees without obtaining the Union’s consent, and also by making a unilateral change to employees’ terms and conditions of employment by granting sign-on and referral bonuses to employees without first notifying and bargaining with the Union.
Charges filed by Local 3000, International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), AFL-CIO. Administrative Law Judge Mark Carissimi issued his decision on December 22, 2016. Chairman Miscimarra and Members Pearce and McFerran participated.
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Security Walls, Inc. (16-CA-152423; 365 NLRB No. 99) Austin, TX, June 15, 2017.
The Board (Members Pearce and McFerran; Chairman Miscimarra, dissenting) adopted the Administrative Law Judge’s conclusion that the Respondent violated Section 8(a)(5) and (1) by making unilateral changes to its disciplinary policy and refusing to bargain over its suspension and discharge of three employees. In so finding, the Board majority found that the Respondent’s existing disciplinary system did not mandate the discharges and the Respondent did not offer to bargain or respond to the Union’s requests for information or its grievance. The majority also denied the Respondent’s motion to reopen the record, finding that the proffered evidence that the Respondent’s contractor refused to rehire the three employees following the judge’s decision was not newly discovered or previously unavailable. Dissenting, Chairman Miscimarra would dismiss the unilateral change violation and find that the Respondent’s contractor’s disciplinary policy mandated the discharges. Additionally, he would grant the motion to reopen the record and allow the Respondent to present evidence that the discharges were not discretionary. Finally, he would dismiss the refusal-to-bargain allegation and find that the complaint alleged only pre-discharge bargaining, and not the post-discharge bargaining violation that the majority found.
Charge filed by International Union, Security, Police and Fire Professionals of America. Administrative Law Judge Arthur J. Amchan issued his decision on January 21, 2016. Chairman Miscimarra and Members Pearce and McFerran participated.
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Unpublished Board Decisions in Representation and Unfair Labor Practice Cases
R Cases
No Unpublished R Cases Issued
C Cases
CSC Holdings, LLC (29-CA-190108) Hauppauge, NY, June 12, 2017. The Board denied the Employer’s Petition to Revoke the subpoena duces tecum, as the subpoena sought information relevant to the matter under investigation and described with sufficient particularity the evidence sought, and there was no other legal basis for revoking the subpoena. Chairman Miscimarra would have granted the petition as to the subpoena paragraph which requested employee handbooks and manuals concerning workplace rules, except for those handbook and manual provisions that reasonably relate to the charge allegation. Charge filed by Communications Workers of America. Chairman Miscimarra and Members Pearce and McFerran participated.
Edwards Painting, Inc. (19-CA-116399 and 19-CA-122730) Oregon City, OR, June 12, 2017. The Board denied the Respondent’s Motion for Reconsideration and Reopening the Record, finding that the Respondent did not identify any material error or demonstrate extraordinary circumstances warranting reconsideration. Chairman Miscimarra disagreed that a motion to reopen the record must relate to proffered evidence that could have been presented at the hearing under Sec. 102.48(c)(1) of the Board’s Rules and Regulations, but agreed with his colleagues that there were no grounds for granting the Respondent’s motion. Chairman Miscimarra and Members Pearce and McFerran participated.
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Appellate Court Decisions
Space Needle, LLC, Board Case No. 19-CA-098908 (reported at 362 NLRB No. 11) (9th Cir. decided June 13, 2017)
In an unpublished memorandum opinion, the Court enforced the Board’s order issued against the operator of the famed Seattle skyscraper whose employees working in the restaurant and banquet space on the tower’s 500-foot level are represented by UNITE HERE! Local 8. The Board (then-Chairman Pearce and Members Hirozawa and Johnson) found that the Employer violated Section 8(a)(1) by soliciting or encouraging employees to resign from Local 8, polling employees regarding their support for Local 8, and making coercive statements to two employees. The Board further found that the Employer violated Section 8(a)(3) and (1) by failing to recall two employees because they had engaged in protected activity, and that the Employer unlawfully refused to bargain in good faith when it reneged on its agreement with the Union to restart dues deduction in violation of Section 8(a)(5) and (1). On review, the Court, with little comment, held that substantial evidence supported the Board’s findings, and enforced the Board’s order in full.
The Court’s opinion is here (link is external).
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Administrative Law Judge Decisions
Meyer Tool, Inc. (09-CA-185410; JD-47-17) Cincinnati, OH. Administrative Law Judge Andrew S. Gollin issued his decision on June 12, 2017. Charge filed by an individual.
Uber Technologies, Inc. (20-CA-181146; JD(SF)-24-17) San Francisco, CA. Administrative Law Judge Mara-Louise Anzalone issued her decision on June 13, 2017. Charge filed by an individual.
International Longshoremen’s Association, Local 28 (Ceres Gulf, Inc.) (16-CB-181716 and 16-CB-194603; JD-46-17) Houston, TX. Administrative Law Judge Robert A. Ringler issued his decision on June 13, 2017. Charges filed by an individual.