Other big firms are watching closely. Amazon.com Inc, JPMorgan Chase & Co and Berkshire Hathaway Inc. said in January they will form an independent company to improve healthcare for their roughly 750,000 U.S. employees, prompting speculation that they would displace health insurers and other industry middlemen.
Amazon and partners say they will use big-data analysis and other high-tech tools to improve care and cut wasteful spending. The trio will study the new plans coming from Intel and other pioneers, a source close to the venture told Reuters.
If they do, they will find plenty of hurdles. Reuters interviews with executives at Cisco, Intel and Boeing and their health partners revealed similar challenges.
Chief among them is habit. Many workers will not stray from conventional plans because they like their doctors or worry about access to the best specialists.
To boost enrollment, all three companies have dangled sweeteners such as extra money for health savings accounts or lower monthly premiums and co-pays. The approach also requires employers to take a more hands-on role.
“It’s not something that you just turn the switch and not manage,” said Katelyn Johnson, Cisco’s senior integrated health manager for global benefits.
Cisco’s experiment began in 2008 when it opened the campus clinic for all of its employees there. Designed like a spa, the facility offered primary care in new-age sounding treatment areas: body, mind, heart and spirit.
The savings were notable: about 30 percent compared to an offsite doctor’s office. Cisco later brought in Stanford to develop a full-blown medical plan, which took effect in 2017. Stanford operates the clinic and provides more specialized services through Stanford University’s medical system.
Like a health maintenance organization, the plan requires enrollees to stick to a closed network of doctors. There is emphasis on primary care and fewer referrals to specialists. Treatment for back pain, for example, often begins with physical therapy at the clinic.
Cisco also mandates that Stanford track a dozen health measures, including glycemic levels for diabetics and blood pressure for those with hypertension.
Johnson said fewer than 1,000 people are enrolled, below Cisco’s goal of 1,300 for 2018. The plan has yet to make a dent in Cisco’s $500 million annual healthcare tab, which has been rising by 3–4% in recent years.
Still, Cisco is encouraged enough by the savings that it may expand the program to the company’s second-largest U.S. center, in North Carolina’s Research Triangle Park.