Archive for November, 2009

If you are like me, you are a little numbed by all of the discussions about rising health care costs.  But this morning when I read that Safeway is now spending an amount more than double its annual profits on health care, and health care costs are rising a lot faster than earnings. 

While that’s crazy, I bet it’s common.

But the article “Do Health Care Savings Start in the Cafeteria?” written by Melanie Warner for The New York Times offers a recipe for how organizations can get some serious return on investment (ROI) in their wellness spending, that will translate into huge cost savings.  While the focus on the article is a company called the Full Yield that offers healthy food for corporate cafeterias, the article stops a little short of what I think the bigger message is.

There is no question that corporate America has looked for ROI on wellness programs, and in many cases it is very hard to quantify.  A better question for corporate America is what the ROI is in their health care investment, and you won’t get many responses.  I think at the heart of this, there are two very large known problems, but most of America is missing a key statistic that provides a clear path with respect to “how” to solve both problems.  The two problems are:

1) Health care costs are growing faster than a runaway train (Safeway is probably the rule rather than the exception)

2) Obesity, depression, diabetes, heart disease, and strokes are all on the rise and that fuels the cost of health care

Some statistics that most people don’t know include:

1) 50%, or 1 in 2 working Americans suffers from major or minor depression (according to the University of Washington)

2) At a cost of $13,500 for annual treatment per person, the cost for diabetes alone in the US was $174 billion in 2007 (according to the American Diabetes Association – the ADA)

3) Diabetes is typically directly linked as a cause of depression, heart disease, strokes, and others

4) In more than 80% of cases, people with diabetes who lose just 6 (six) pounds all symptoms and costs associated with diabetes go away and do not return  (according to the ADA)

So the key statistic that I mention above is that the overall bill for American health care would have been roughly $139 billion lower in 2007 if people with diabetes lost at least six pounds.  And of course that’s just the tip of the iceberg in terms of costs.  By going upstream of the high costs of health care, you are preventing a huge percentage of the heart disease, strokes, and depression that emerge.

That’s how to get a huge start on getting ahead of health care costs, and I bet if you take Melanie Warner’s guidance and have a company like the Full Yield put food in your corporate cafeterias, you will also boost employee morale a lot by showing that you care about their wellness and that takes the form of some great tasting food.

Is all of this talk about diabetes a thin veil over a discussion about obesity?  Maybe, though I would assert that there’s less stigma associated with diabetes than obesity, but more importantly, it doesn’t matter – focus on, “what” you want in terms of  the outcome of lower costs and higher employee morale, and this is “how” you get there.  So what are you waiting for now?

-Ric

There was an interesting article in The New York Times today, “At Checkout, More Ways to Avoid Cash or Plastic” by Claire Cain Miller.   The point of the article is that technology is presenting some increasingly more convenient and trustworthy ways to pay for things.  In essence, Miller is saying that services like PayPal and others are making truly digital money a real and practical possibility, when it doesn’t seem like so long ago that such a thing was humorously suggested to be futuristic in an episode of The Jetsons.  One interesting point Miller makes is the following:

“The way consumers pay for things has transformed only a few times. Coins replaced bartering, paper bills mostly replaced coins, and bank drafts and checks developed as an alternative to cash.”

While this is true, and a good example of “how” trap rethinking where advances enabled people to change “how” they conducted transactions, a key point that Miller doesn’t emphasize is suggested in this quote:

“Opening up the payment systems in a flexible and frictionless way like PayPal is doing is a really big deal,” said Dana Stalder, a venture capitalist at Matrix Partners

Really big deal doesn’t start to cover it.  It’s a widely discussed fact that the typical American is carrying more than $5,000 in credit card debt, usually with an enormous interest rate where some people struggle to make their monthly minimum payment, which makes the debt snowball.  Obviously some of this is because of poor money management skills, fueled by the need to keep up with the Joneses next door, but the fact is that for many, the credit card is a huge step backward in the sense that it straps, if not buries, people with their own debt.

One manifestation of the “really big deal” that Stadler alluded to is that this could well be a window for a service like PayPal and the others to actually slam the door on credit cards and their onerous interest rates.  We saw the online retail bank ING DIRECT eliminate paper checks from retail banking, which prevents people from bouncing checks – I think we could see some similar shifts with the digital money crowd where they charge lower interest rates and do more to help the consumer with their debts.

Until I read this piece, I didn’t have much hope for saving the American public from their credit card debt, but this gives me new hope that an easier way to pay, can become a smarter way to pay and manage debt and eliminate the 20% interest rates.

I am going to stay very interested in how this develops, and I hope to hear the credit card companies say “Ruh-Ro!”

-Ric

I have written about my frustrations with Comcast in the past, in large part because in their industry, because there are other options, it makes no sense to me that they have such horrible customer service and support.

So this morning when my friend Mark told me about how he is saving $800 a year this year on Comcast, I wasn’t so surprised – they know they have competition.

Mark told me that he had gotten an offer from Dish Network for $30 a month, so as a Comcast customer paying about $100 per month for cable TV with no premium channels, he called Comcast to ask for help.  Mark said he called in a very friendly voice and said he loved Comcast but he needed help with their price because his wife heard about the Dish offer.  And with that they lowered his bill by $70 per month for a year.

When I got home I went out to the Dish site, clicked on the online chat button, and with what I have today from Comcast (Showtime and HBO), I learned can get it from Dish for just $39 a month, so I called Comcast, like Mark, in a very friendly way, and with that they lowered my bill by $60 per month.  It took about ten minutes and I will save $720 this year as a result. Nice.

I think the trick is to have a specific price from a competitor and Comcast knows they have to match that.

So in the notion of the “how” trap that’s central to the book Rethink, this is an example of a way to change “how” you pay for your cable. Pass it on . . .

-Ric