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Solving the Health Care Crisis—One Company's Success Story

About 46 million uninsured Americans got some much-needed help from the Obama health-care-reform bill, but for businesses, it's a different story.

Many businesses — large and small are still trying to figure out how and if they can afford to provide health insurance to their employees. Some are choosing to drop health coverage altogether — they'd rather pay any fines leveled against them than to try to fund benefits.

With health-care costs threatening to take down his company, John Torinus, Jr. a former Marine, took matters into his own hands.

In 2003 Torinus the Chairman and CEO of Serigraph, Inc., a Wisconsin manufacturer, implemented several innovative steps to curtail escalating costs.

Employees were given a stake in the financial outcome of health care and by doing so, they cut their costs drastically.

Five years into the reform, Serigraph spends one-third less than the national average to insure its workers.

Now Torinus is telling his story in the book "The Company That Solved Health Care" . In the book, he outlines in detail the steps his company took and shares how other businesses can achieve similar results. By weaving in real life stories of how reformed health care plans work at his companies and others including Scotts Miracle-Gro, Kohl's Department Stores, SAS International and Humana, Torinus lays out a compelling study full of possibilities for other companies to research and employ.

Want to learn more? Continue reading for his Guest Author Blog where Torinus shares the three main strategies for reform.

SOLVING HEALTH CARE

Guest Author Blog: Solving Health Care by John Torinus, Jr. Author of "The Company That Solved Health Care"

Guest Author Blog
Guest Author Blog

The conversation around health care continues to be white hot. In fact, health care is mentioned every 20 seconds in one form of media or another. There’s little debate that something must to be done about the ever-rising health care costs; the point of contention is the what.

Currently, health care costs for companies double on average every eight years. Insurance premiums increase at least 10 percent annually for most companies of any size, and some are seeing increases of 20 percent or more. Our organization looked at these numbers and came to the conclusion that this was an unsustainable path and that small course corrections would not ultimately solve the problem. It was apparent that our company was in the undertow of runaway health care costs, and as CEO and chairman, it fell on me and my leadership team to lead the way out of the situation toward a workable solution for the company and our employees.

The evidence so far says we are on the right track: over the last seven years, our average annual increase in total medical costs was 2.8 percent, far below the national average of 8 percent. Our employees are healthier overall and both they and Serigraph have reaped the benefits.

Our plan consists of three core platforms:

Consumer responsibility – We implemented a consumer-driven health plan. These types of plans have at their core a very basic truth: behavior changes on a dime when employees and associates have accounts that are tied to high deductibles and co-insurance. Companies that have used consumer-driven health plans have enjoyed savings from 20 to 40 percent.

Prime role for primary care – The pyramid is currently upside down, with specialists providing the most care – and significantly hiking up the health care costs. Our plan was to return to the use of primary care doctors over specialists, allowing employees to receive more intimate and integrated care from their primary health provider and saving us from hefty hospital and specialist fees.

We established our own on-site clinic at Serigraph, hiring a concierge doctor to offer free primary care to any employee who signed up. The result was fewer hospital visits and a better handle on chronic illnesses among employees.

Centers of Value – We were determined to find the best providers of health care, where value meant the best combination of service, quality and price. This was – mildly put – a difficult task, filled with dead ends and complications. The sad truth is that the majority of Americans have almost no idea whether their doctor or hospital system is good, bad or average for performance. What’s more, cost is rarely discussed between patient and provider, making pricing elusive at best. However, once we were able to cut through the red tape, we made the performance and cost variation of providers viewable via the company intranet site. Employees can now make informed decisions about where they will receive care. Further, rewards are set up to steer employees to the best-in-class providers – regardless of whether they’re down the street or across the ocean. The end result is better care for employees and lower prices for companies.

"Our organization looked at these numbers and came to the conclusion that this was an unsustainable path." -The Company That Solved Health Care, John Torinus, Jr

While there is still much work to be done in companies large and small, the relentless rise of health cost, year-in and year-out, is not an inevitable outcome.

Our company fought health care and won; through top-to-bottom dedication to solving the problem together, yours can too.

About the author:John Torinus, Jr. is the author of The Company That Solved Health Care (BenBella Books; hardcover; October 2010). John served 20 years as CEO of Serigraph Inc., a graphics parts manufacturer with ownership in 10 plants in the U.S., Mexico, China and India. He continues as its active chairman.

Email me at bullishonbooks@cnbc.comAnd follow me on Twitter @BullishonBooks

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