Emanuel wants to use incentives to drive down city health costs
BY FRAN SPIELMAN City Hall Reporter December 19, 2010 7:52PM
If Rahm Emanuel is elected mayor, he plans to implement an incentive-laden health and wellness plan mirroring those pioneered by companies such as Safeway and Johnson & Johnson. | Scott Stewart~Sun-Times
Updated: April 19, 2011 5:13AM
Mayoral challenger Rahm Emanuel will unveil plans Monday to implement a health and wellness plan for city employees that would use incentives to drive down costs by as much as $240 million over four years.
“The last thing I thought I was going to deal with is health care, but here we are again,” said Emanuel, chief architect of President Obama’s health reform bill during his nearly two-year stint as White House chief of staff.
“You can wring costs out of the health-care budget by rewarding the positive steps people take. You take your blood pressure medicine, we pay more. If you don’t, you end up picking up more of the cost. The cost-benefit reward is structured in a way that it’s in your own interest to do what’s right for your health.”
Chicago taxpayers spend $500 million a year to provide health care for city employees. That’s nearly 10 percent of the city’s annual budget. Those costs are rising 10 percent a year.
Even more troubling, 4 percent of the city’s work force accounts for 60 percent of the annual expense. They are primarily people with chronic illnesses such as diabetes, high blood pressure, heart disease and asthma. Obesity is also a contributor. So is heavy smoking.
If Emanuel is elected mayor, he plans to implement an incentive-laden health and wellness plan mirroring those pioneered by companies such as Safeway and Johnson & Johnson.
Emanuel noted that Johnson & Johnson managed to reduce employee smoking by two-thirds and cut the rate of high-blood pressure among its workers in half. The company got $3 of savings for every $1 invested in incentives, he said.
The city has tried to make inroads on wellness by using preventive screening programs. But Emanuel argued that participation has fallen short, in part, because lucrative incentives are missing. His reforms would begin by offering all participants in the city’s health plan an enhanced screening to establish benchmarks and long-term goals, including weight loss and exercise. Emanuel’s goal is to reduce health-care costs by $40 million to $60 million a year over four years.
In 1991, former U.S. Attorney Anton R. Valukas reported that fraud, waste and mismanagement in the city’s then-$252 million-a-year health insurance program had cost taxpayers “tens of millions of dollars” since 1985.
This year, Mayor Daley ordered another audit with the potential to save millions by purging ineligible dependents from the insurance rolls.