At Bloomberg View, Ezra Klein recounts the efforts of the Cleveland Clinic to reduce its own health expenditures. In an effort to change habits, the clinic put in place a series of tough mandates:
“First thing we said was we had to make our institution toxin free,” Roizen said. “The biggest toxin we have in the U.S. is tobacco. So we began offering free tobacco-cessation programs to our employees. Then we banned smoking on campus. You can’t even smoke in the parking lot in your car. The first offense you get a warning, and the second you get fired. We fired two high- profile physicians who refused to quit. Then they knew we were serious.” …
“We want to make it easy for you to do healthy things and hard for you to do unhealthy things,” Roizen said. “If you want a sugared drink, you have to go out of your way to bring it from home. We’re not going to provide it.”
That left fitness and stress relief. The first step was easy: Offer free fitness and stress-management classes. But the clinic still had to get its employees to attend. So they reversed the normal calculus. Usually, you have to pay to hit the gym or attend a yoga class. If you work for the Cleveland Clinic, you have to pay if you don’t.
“We raised the premiums for all employees,” Roizen said. But employees didn’t necessarily have to pay the increase. “If you’re doing a healthy program — attending Weight Watchers or Shape Up and Go — you get a rebate.”
To effectively enforce these mandates, the clinic needed to get under the hood:
The clinic tracks its employees’ blood pressure, lipids, blood sugar, weight and smoking habits. If any of these are what the clinic calls “abnormal,” a doctor must certify that the employee is taking steps to get them under control. Otherwise, no insurance rebate. The idea is to force employees to have regular conversations with their doctors about wellness. If they participate, they can lock in the rates they were paying two years ago. The savings amount to many thousands of dollars.
It appears to be working. Not only has the clinic cut its health-care costs, but its employees are also getting healthier in measurable ways. Workers have lost a collective 250,000 pounds since 2005. Their blood pressure is lower than it was three years ago. Smoking has declined from 15.4 percent of employees to 6.8 percent.
Ezra expresses some unease about the clinic’s methods, or rather he suggests that others might find them problematic:
In one sense, the clinic has achieved the health policy ideal: cutting health-care costs by making people healthier. But consider how the clinic has done it — tying premiums to personal decisions, firing smokers, tracking employee metrics, eliminating popular sodas and foods from campus. By making it harder and more expensive for employees to be unhealthy, the clinic has radically overstepped the traditional, laissez-faire approach of employers to their workers’ personal habits.
Another way of looking at this approach is that it represents an adjustment of the contract. Other firms might be willing to pay you less in the form of salary, yet they’ll pay you more in terms of autonomy — and in terms of paying for the inevitable health expenditures associated with allowing workers to indulge in unhealthy practices on company time.
It is hardly surprising that a large employer like the Cleveland Clinic would embrace this epidemiological strategy. Choices regarding diet and exercise are powerfully shaped by our peers, and shifts have to be firm-wide or neighborhood-wide if they are to be effective. The Cleveland Clinic can’t mandate that all of its employees only associate with the healthy, fit, and svelte, yet it can mandate that its employees embrace certain habits while in the workplace.
The column ends with the following:
As [Michael] Roizen notes, tough choices are inevitable over the next decade. The question is which ones we prefer to make. If we opt for Cleveland Clinic-style wellness programs, we won’t have to gut education, raise taxes or slash Medicare. And we’ll end up healthier. But in a country where proposed counseling sessions to discuss end-of-life options were denounced as “death panels,” are we really ready to let employers — much less the government — tell us to quit smoking, skip the junk food and lose weight?
There is another way out of this dilemma. By embracing something like Yuval Levin’s confident market solution, we might be able to manage health expenditures by encouraging individuals and families to choose medical providers that deliver quality care at affordable prices. One strategy providers will use is to embrace Cleveland Clinic-style wellness programs. Others will embrace other strategies, tailored to the needs of different populations.
The anxiety over “death panels” flowed from the belief that a global public budget for health expenditures would lead to the government making decisions, leaving out intermediate institutions, etc. We know that HMOs haven’t been very popular in the past. But employers and new-model providers will have a strong incentive to encourage people to plan ahead, to think about end-of-life options, etc., because they will internalize costs in ways that a democratic public can’t.
So what do I mean by that? Well, if I’m running a ball-bearing company based in a Milwaukee suburb, it’s fairly easy to see how health expenditures impact by ability to function even in the short- to medium-term. The same is true of a household. But in a democratic context, the costs can be concealed in a variety of ways, e.g., federal borrowing can make the cost by deferring it to future taxpayers. This lack of clarity weakens the incentives for constructive behavior. It actually is very sensible to think about end-of-life options. But that message is far easier to accept when you have someone presenting you with the relevant issues in an accessible, intelligible way.
The obvious slogan for this approach: “no hidden fees.”