Safeway to market health program to other employers

Oakland, Calif. Safeway said Tuesday it plans to capitalize on the success of its existing incentive-based health plan by offering to set up similar programs at other employers for a share of the cost savings generated.

According to an article in Business Insurance, Ken Shachmut, senior VP Safeway and executive VP its subsidiary Safeway Health, announced the new business venture during a keynote address in Washington at the Business Health Agenda 2010 sponsored by the National Business Group on Health.

Safeway gained recognition for its health plan success in 2008 when CEO Stephen A. Burd published an article in the Wall Street Journal describing how it had basically held its healthcare costs flat since 2005.

Safeway also takes credit for a provision in one of the healthcare reform bills pending before Congress that would significantly increase the potential rewards and penalties tied to wellness program participation. Under current law, any incentive paid to plan members is limited to 20% of the cost of single coverage. But under the “Safeway Amendment,” that sum would grow to 30%, and employers potentially could increase it to 50% with authorization from the Department of Health and Human Services.

Although Safeway's health plan is administered by Bloomfield, Conn.-based CIGNA Corp., Shachmut said the incentive plan and other consumerist elements, including greater transparency of provider and drug pricing, were developed in-house “with valuable input from CIGNA” and other firms.

“About the middle of last year, we decided to try and commercialize our experience. We believe that what we have is transportable to other employers,” Shachmut said.

Safeway Health will provide analytics, plan design or redesign assistance, Shachmut said. As compensation, Safeway Health receives 25% of the savings generated over a five-year period.