The Company That Solved Health Care: How Serigraph Dramatically Reduced Skyrocketing Costs While Providing Better Care, and How Every Company Can Do the Same

The Company That Solved Health Care: How Serigraph Dramatically Reduced Skyrocketing Costs While Providing Better Care, and How Every Company Can Do the Same

The Company That Solved Health Care: How Serigraph Dramatically Reduced Skyrocketing Costs While Providing Better Care, and How Every Company Can Do the Same

The Company That Solved Health Care: How Serigraph Dramatically Reduced Skyrocketing Costs While Providing Better Care, and How Every Company Can Do the Same

Even with new health-care policies, one thing is clear: health-care costs will continue to rise dramatically. While individuals may get better coverage, businesses will have the same problem they’ve had for the last four decades. Health care, one of corporate America’s largest expenses, is growing at double-digit rates, and nothing done in Washington will change that.

But one medium-size company set out to tame the beast of rising health-care costs, employing best practices and cutting-edge ideas. The results have caused others to sit up and take notice. Serigraph, Inc., a Wisconsin-based manufacturer of decorative parts, and its chairman, John Torinus, did what Washington can’t or won’t do: reduce cost increases to less than 2 percent while improving the quality of health care for its employees. The implications for corporate America are staggering–the opportunity for genuine reform in an expense category that has been spiraling out of control.

Serigraph began its initiative to control health-care costs in 2003, when its annual health-care bill was million and another 0,000 was needed for the projected 15 percent annual increase. The company employed three strategies for reform, each of which can cut the health-care bill by 20 percent to 40 percent–consumer responsibility, the primacy of primary over specialty care and centers of value. Applied in concert with other management methods, these three approaches almost eliminated growth in health-care costs while improving the quality of employee care. The results are documented. They are beyond refute.

“The Company That Solved Health Care” describes the fascinating details of Serigraph’s program, and shows how any company can achieve similar results. This book is essential reading for any manager responsible for his or her company’s health-care expenses, any academic or thinker involved in the health-care debate and anyone who wants to better understand why health-care costs have been rising and what can be done to achieve price stability while improving patient care.

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3 thoughts on “The Company That Solved Health Care: How Serigraph Dramatically Reduced Skyrocketing Costs While Providing Better Care, and How Every Company Can Do the Same”

  • 3 of 3 people found the following review helpful
    5.0 out of 5 stars
    There really is a story about cost control for health care, November 1, 2010
    By 
    Philip Nelson (Green Bay, WI United States) –

    Amazon Verified Purchase(What’s this?)
    This review is from: The Company That Solved Health Care: How Serigraph Dramatically Reduced Skyrocketing Costs While Providing Better Care, and How Every Company Can Do the Same (Hardcover)

    The book answers the questions the critics of consumer driven healthcare pose and I think convincingly. You should really read the whole thing and then decide. High deductible plans can work well when you don’t actually have higher out of pocket expenses but do have in interest in how the money is spent. The money is recovered by finding lower cost and more effective places to have various procedures and treatments done. I have been in a plan like this for a few years now and love it. The recent health care reform laws, really health insurance reform has actually made my plan a bit worse by eliminating over the counter products unless prescribed by a doctor, essentially taking a bit more of my own health care decision making out of my hands. But it is still a good plan.

    If you are open to learning about a new way to think about health care, you will enjoy this book.

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  • 3 of 3 people found the following review helpful
    5.0 out of 5 stars
    Reforming Thyself: Practical ways to reduce healthcare costs, January 14, 2011
    By 

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    This review is from: The Company That Solved Health Care: How Serigraph Dramatically Reduced Skyrocketing Costs While Providing Better Care, and How Every Company Can Do the Same (Hardcover)

    Every executive or HR manager in self-insured plans with high deductibles should read this book. The book is a fast read and implementing just one of the many ideas found here will save any company thousands of dollars.

    Senior executives always complain about the rising cost of healthcare, but no one does anything about it. “Success” is defined as working with your benefits administrator so that the premium increase is “only 9%” this year and being happy that at least it’s not a double digit increase.

    John Torinus is one executive who has not abdicated his responsibility in keeping healthcare costs down. Not accepting the standard premium increases at face value, John developed a program to provide transparency to health care costs and employee incentive programs that helped employees make consumer driven healthcare decisions. The result has been premium increases averaging <3% over the last 8 years, better quality of care and an engaged employee base.

    The Company That Solved Healthcare provides practical and real world suggestions about what self insured employers can do to manage their healthcare costs. For example, Torinus details what happens when employees know that a colonoscopy can cost $400 or $4000, depending on where they go for service. While you might not be able to afford to do everything that John has done (starting a primary care clinic on-site), this book contains many ideas about what companies can do to start actively managing their health care spending.

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  • 15 of 15 people found the following review helpful
    5.0 out of 5 stars
    Excellent Material –, January 4, 2011
    By 
    Loyd E. Eskildson “Pragmatist” (Phoenix, AZ.) –
    (HALL OF FAME REVIEWER)
      
    (REAL NAME)
      

    This review is from: The Company That Solved Health Care: How Serigraph Dramatically Reduced Skyrocketing Costs While Providing Better Care, and How Every Company Can Do the Same (Hardcover)

    Recent Washington health care reforms have done little to reduce costs – our #1 problem in health care. Instead, the focus was on improving access. John Torinus, chairman of Wisconsin-based Serigraph, took the problem of employee health-insurance cost doubling every eight years into his own hands. (Serigraph is a 61-year-old firm with 450 U.S. employees, 1,700 world-wide, focusing on plastics printing via pressure-sensitive decals, in-mold decorations, and silk-screening.) At the time (’03), health costs were the firm’s third-largest expense and headed towards second-largest. Over the last seven years their increases (employer and employee) ave averaged 2.8%/year, vs. a national average of 7% – without cutting benefits. Changes emphasized consumer responsibility, centers of excellence, and a prime role for primary care. Previous efforts (wellness programs, some rationing, participating in a buying group, and cost-shifting to employees) had accomplished little. The firm is now self-insured, saving over $1.5 million/year (about one-third of average expenditures), with costs now split 80/20 with its employees.

    In the new plan, employee premiums dropped by about $1,500 to almost nothing, in return for $780/employee in a form similar to Health Savings Accounts, higher deductibles of $750, $1,000, or $1,500 (employee’s choice; formerly $300), and 30% in network co-insurance (same as before). Maximum employee out-of-pocket expenditure/year is $3,250 to $6,000. Other current benefits include free on-site annual mini-physicals (including blood work), rebates of $250 (upper GI endoscopy) to $2,000 (CABG) for use of ‘Centers of Value’ for specified electives, $5 generic medicine co-pays, access to a free on-site clinic staffed by a nurse practitioner, nurse, chiropractor, and dietitian), free primary care through an on-site part-time primary-care doctor, an on-site fitness center, free elective procedures via a medical tourism program (eg. $5,000 for a knee replacement at Apollo Hospital in India, plus $5,000 for travel with a companion – vs. $$36,000 locally; CABGs in the U.S. average $80,000, vs. $25,000 in Costa Rica, $8,500 in India, and $34,000 at better U.S. facilities), free second-opinions on electives, and free prevention exams (mammograms, Pap tests, colonoscopies, prostate tests). Serigraph’s web-site provides employees with bundled price and quality ratings for 27 electives (information accuracy verified by the local BC/BS). Employees wanting expensive brand name drugs instead of effective generics or substitutes pay the cost difference, plus $30; expensive drugs lacking cheaper equivalents are paid for by the firm, less the $30 co-pay.

    Serigraph employees also get half the savings from any billing errors they discover. Outpatient bills sometimes have half their costs accounted for by ‘non-specific outpatient treatments” – impossible to decipher without lots of help, from the hospitals. Hospitals also hire consultants and staff to ‘up-code’ to more expensive charges, obfuscate price increases by limiting the largest increases to the least-used services and then publishing the unweighted average increase, and resisting bundled (simpler, encourages higher quality) pricing. (Bundled pricing actually was initiated by a hospital in 1984 – the Texas Heart Institute; Geisinger Health System since added rehospitalizations within 90 days to their bundled pricing.) Still another hospital network strategy is buying up primary-care practices to incentivize them for keeping within their high-priced system. Insurers, for their part, get around state limits on rate increases by reclassifying a firm’s level from ‘preferred’ to ‘standard’ or ‘sub-standard.’

    Serigraph employees now shop for care to reduce their co-pays and share of overall costs, avoid non-emergency ambulance trips (Torinus is justifiably angered by the reputed common practice among Medicaid recipients of calling an ambulance to go to an E.R. for a sore throat), and are more likely to adhere to provider care plans (they’re rewarded with time off for following recommendations, as well as good test results).

    Torinus asserts, along with many physicians, that there is no relationship between health care costs and quality, whether measured by patient outcomes or adherence to treatment regimens recommended by expert panels. (Providers with greater experience and acquired skill take less time, make fewer errors – potential lives saved/year estimated at 3,000; surgeons using checklists reduce complications by 1/3 and in-hospital deaths by 20-50%. Staffing ICUs with specially trained intensivists would save nearly 50,000 lives/year and $4.3 billion. Sources: Leapfrog Group, Dr. John Birkmeyer.) Overall, Torinus also believes too many companies delegate health care to H.R., don’t give the topic the ‘C-level’ attention required, and limit efforts to simply undertaking routine bidding – trusting the health plans to do the…

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