IBM Plans to Cover Its Employees' Deductibles, Copays for Primary Care Services
Other Companies May Follow Computer Giant's Lead
By James Arvantes
11/17/2009
IBM plans to eliminate copays and deductibles for primary care physician services for most of its employees in January, a move that could prompt other large companies and employers to eliminate financial barriers for primary care services as well, according to analysts interviewed by AAFP News Now.
"IBM is doing this because we think it is the right thing to do," said Paul Grundy, M.D., M.P.H., IBM's global director of health care transformation. "We have really listened to our patients. They want a meaningful relationship with their doctor. They want to have a healing relationship, and they want us to support them in having better access and more convenience around their care."
IBM is one of the nation's largest employers, employing about 115,000 people who reside in nearly every part of the country. The new 'first dollar' for primary care program essentially will make primary care services free for 80 percent of the 328,888 employees and dependents who are enrolled in IBM's self-insured plans. It does not apply to the 20 percent of employees and their dependents who are enrolled in the company's HMO.
Grundy expects that the elimination of copays and deductibles for primary care services will "create much better value for our employees and for IBM." The company spent $79 million on a series of wellness programs between 2005 and 2007, which helped the company save $191 million, said Grundy.
"We feel if we can get much more robust prevention, if we can focus on an early diagnosis, it will save on expenses like hospitalizations, (sub)specialist care and emergency room care," said Grundy. In turn, this should lead to increased productivity among the company's employees -- perhaps the greatest benefit for IBM, according to Grundy.
"We find that the more medical conditions employees have, the more likely they are to be distracted and not be as present as fully as they should be," he said.
IBM spends about $1.3 billion a year on health care in the United States, and about 6 percent to 7 percent of that is spent on primary care, according to Grundy. He did not know how much the 'first dollar' program for primary care would actually save the company in the long run, however.
"I don't have a preconceived notion of a dollar amount, but we will look at the data as it rolls out," he said. "We believe in the long run this is a better investment in our employees."
Helen Darling, president of the National Business Group on Health, said two-thirds of the nation's Fortune 500 companies cover evidence-based preventive care, such as annual physicals, well-child and -baby visits, and mammograms, at 100 percent of cost. IBM, for example, has been providing 100 percent coverage for routine preventive care since 2006. But IBM appears to be the first Fortune 500 company to foot the entire cost for primary care services, a move that could convince other companies to follow suit, Darling said.
"There are a lot of large employers who will look at this and say, 'That is really interesting, we ought to consider that,'" Darling said. "IBM tends to be the kind of company that other companies look at and want to emulate."
Grundy described IBM as a "trendsetter," saying, "We've already had contact with other companies who have asked how we are going to do this."
Family physician José "Jun" David, M.D., of Albany, N.Y., founder and senior partner of Prime Care Physicians, a multispecialty practice in Albany, takes care of about 30 IBM employees and their families. He said IBM's first dollar program for primary care is good for patient care, and it will encourage patients to be more proactive about their health care.
David does not expect the program to lead to a big jump in patient visits because most IBM employees already know the value of seeing their primary care physicians on a regular basis. However, he said there may be a danger of "overutilization," or patients who visit their primary care physician unnecessarily because the care is free.
Grundy said overutilization is not a concern.
"We are making the assumption that our employees are going to do the right thing," he said. "It is a trust issue and an education issue."
IBM is one of the nation's largest employers, employing about 115,000 people who reside in nearly every part of the country. The new 'first dollar' for primary care program essentially will make primary care services free for 80 percent of the 328,888 employees and dependents who are enrolled in IBM's self-insured plans. It does not apply to the 20 percent of employees and their dependents who are enrolled in the company's HMO.
Grundy expects that the elimination of copays and deductibles for primary care services will "create much better value for our employees and for IBM." The company spent $79 million on a series of wellness programs between 2005 and 2007, which helped the company save $191 million, said Grundy.
"We feel if we can get much more robust prevention, if we can focus on an early diagnosis, it will save on expenses like hospitalizations, (sub)specialist care and emergency room care," said Grundy. In turn, this should lead to increased productivity among the company's employees -- perhaps the greatest benefit for IBM, according to Grundy.
"We find that the more medical conditions employees have, the more likely they are to be distracted and not be as present as fully as they should be," he said.
IBM spends about $1.3 billion a year on health care in the United States, and about 6 percent to 7 percent of that is spent on primary care, according to Grundy. He did not know how much the 'first dollar' program for primary care would actually save the company in the long run, however.
"I don't have a preconceived notion of a dollar amount, but we will look at the data as it rolls out," he said. "We believe in the long run this is a better investment in our employees."
Helen Darling, president of the National Business Group on Health, said two-thirds of the nation's Fortune 500 companies cover evidence-based preventive care, such as annual physicals, well-child and -baby visits, and mammograms, at 100 percent of cost. IBM, for example, has been providing 100 percent coverage for routine preventive care since 2006. But IBM appears to be the first Fortune 500 company to foot the entire cost for primary care services, a move that could convince other companies to follow suit, Darling said.
"There are a lot of large employers who will look at this and say, 'That is really interesting, we ought to consider that,'" Darling said. "IBM tends to be the kind of company that other companies look at and want to emulate."
Grundy described IBM as a "trendsetter," saying, "We've already had contact with other companies who have asked how we are going to do this."
Family physician José "Jun" David, M.D., of Albany, N.Y., founder and senior partner of Prime Care Physicians, a multispecialty practice in Albany, takes care of about 30 IBM employees and their families. He said IBM's first dollar program for primary care is good for patient care, and it will encourage patients to be more proactive about their health care.
David does not expect the program to lead to a big jump in patient visits because most IBM employees already know the value of seeing their primary care physicians on a regular basis. However, he said there may be a danger of "overutilization," or patients who visit their primary care physician unnecessarily because the care is free.
Grundy said overutilization is not a concern.
"We are making the assumption that our employees are going to do the right thing," he said. "It is a trust issue and an education issue."
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