Benefit or Burden - Worthington Industries - Takes medicine, costs under its umbrella
A new study by the Kaiser Family Foundation shows family coverage premiums in the United States reached $1,000 dollars per month this year for the first time. As the plans get more expensive, companies and their workers are paying more. But, workers at one north side company pay, at most, $40 per month. In Part Two of our series, Benefit or Burden--The Rising Cost of Health Insurance, WOSU's Tom Borgerding visits Worthington Industries, a 52 year old home-grown steel processor. The company employs 8,000 workers worldwide, including 1,200 in Columbus and Westerville.
At the Worthington Cylinder plant on Dearborn Drive, 47 year old Fred Sorrell makes valves for refrigerant cylinders. He's worked for Worthington for 26 years and for a longtime, 15 years in fact, put off seeing a doctor.
"I was in pretty bad shape, I was always tired, I couldn't hardly get out of bed, was not functioning very well at the job itself so I thought I'd better go and find out what the problem was." Said Sorrell.
Sorrell made an appointment at the on-site medical center where Worthington employs three physicians, a dietitician, a physical therapist and operates a pharmacy. Following the office visit and some follow-up medical tests, Sorrell says he now knows what ails him.
"I had allergies, I had high blood pressure, high cholesterol, type-two diabetes, and we had a lot of tests done, MRI's, Catscans, those type of things. And since that time I've lost close to 50 pounds. Blood pressure levels and cholesterol levels are coming within normal ranges, also with the blood sugar. And I've seen an allergist and we've had allergy shots that go on about every two weeks." Says Sorrell.
Worthington Industries considers Fred Sorrell a health care success case. The health center is part of Worthington Industries plan to lower health insurance costs. Chairman John P.McConnell says the company's annual bill for health care is big.
"We're currently spending close to 40 million dollars a year in health care and you know its going to go up again this year." Says McConnell.
Worthington's health care costs amount to 35 percent of its net profits and the health care costs are rising nearly 3 percent per year. McConnell says health care costs are hard to control. He blames double-digit increases in prescription prices and expensive boutique hospitals.
Another part of its effort to keep a lid on health care includes financial incentives and penalties. Employees who participate in the company's wellness program pay lower premiums. Other workers pay more. For example: McConnell says smokers pay more, "So, you can do whatever you want. If as an individual you choose to smoke, just pay more." McConnell says the upside for the company is that a healthy employee is also more productive, "Our competitive advantage comes from the people we have here so we want to always make sure that we are taking care of their needs and we are competitive in the marketplace."
Worthington Industries offers three health care plans for its workforce. Two of the plans are Preferred Provider Organizations. The most expensive insurance premium is 40 dollars a month for a family.
A third option for Worthington employees is something called a "Health-Re-imbursement Account." or H.R.A. Here's how it works: Participants get $2,000 from the company to use for healthcare expenses. They don't pay monthly insurance premiums but they have to use that $2,000 to pay for doctor visits, prescriptions, and all other medical bills.
If all of their medical expenses for the year are less than $2,000, in essense the worker ends up paying nothing for their health care.
Instead of paying monthly insurance premiums, Worthington Credit analyst Roger Hewitt, his wife, and four children are enrolled in that program. They've only used $1,500 dollars this year.
"I've not had to go to the doctor as much and also we even had an incident where this year we had one of the children in the emergency room this year and we still had benefit left over," Says Hewitt
If the family's expenses exceed $2,000, they have to pick up the next thousand dollars in costs before Worthington's health insurance plan kicks in.
One of the ways Hewitt and Worthington Industries control their costs for medical care is its on-site medical center. Doctor visit fees are capped at $25 per visit and any tests cost the patient $15. But,Center Director Doctor Bill Gegas, says the true costs of each visit and procedure is marked up in medical center records.
"We know at the end of the day what it would cost had we run it through our health care insurance. At the end of the fiscal year or the calendar year we can look at what we paid to keep the medical center open versus what that would have been charged to the medical plan. When you look at the difference or the spread its always to the positive for what Worthington provides." Says Gegas.
Doctor Gegas says the medical center logs between 4,500 and 5,500 patient visits per year for Worthington employees and their dependents. Worthington Industries credits its health center and other incentives for keeping its health care bill in check. While the company's bill is still rising, its yearly increases are less than half of the average increases paid by other manufacturing companies in the Great Lakes Region.