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Spending to Save on Diabetes

July 21, 2006
Related Topics: Health and Wellness, Featured Article, Compensation

David Rigby, a 53-year-old supply room worker at Mohawk Industries' textile manufacturing plant in Dub­lin, Georgia, would have loved chocolate to death had his employer not intervened first.

    "I had to have that sweet taste in my mouth," he says. "I wasn't hungry; I just had to have it."

    And as tasty as his wife's cooking is, her fried pork chops, fried chicken and fried steak, and the white rice he had to have four times a week, were an expensive long-term hospital stay waiting to happen. Rigby's love for sugar and starch left him overweight, at 286 pounds, and with high blood sugar. He had blurred vision, headaches, tingly toes and swollen legs.

    For a man who spends his days on his feet, Rigby was in a bad way. Six years ago, a doctor said he was "borderline" diabetic. To Rigby, this meant he didn't need to take his medicine or change his diet. Plus, prescription co-pays add up, he says. Instead, he tried new shoes. He bought new eyeglasses. Rigby, who speaks with a soft Southern drawl, was in denial.

    "I did not do the most sensible thing, which was to take care of it like I should," he says.

    That is indeed the most sensible thing. Diabetes is a disease of epidemic proportions, afflicting 20.6 million people aged 20 or older in the United States. Its costs were $132 billion in 2002, including $92 billion in medical costs and $40 billion in lost wages. American employers, who in 2002 helped pay for a portion of the 82,000 Americans who had their legs or feet amputated because they did not control their diabetes properly, are bearing the brunt of the cost.

    If there is good news about diabetes, it is that companies, working in their own best interest, are beginning to act on two long-held facts. Chronic illnesses compose a majority of a company's health care costs. And managing a chronic illness, like diabetes, is cheaper than paying for the hospitalizations that result from not managing it.

    Only a few companies are going far enough, though, to eliminate the barriers that keep individuals from buying medicine and changing their unhealthy lifestyles, diabetes management experts say.

    Considered by diabetes experts to be the most radical approach to chronic disease management, the city of Asheville in North Carolina began a program in 1997 that provided employees with free diabetes medicine and medical devices, free counseling and education by pharmacists and regular check-ups so long as employees took their medicine and changed their unhealthy life­styles. The city reduced its costs, but many doubted the results could be duplicated in the private sector, especially at companies whose em­ploy­ees lived in less populated areas where counseling appointments can be hard to attend.

    Now a handful of companies are trying to emulate that model. In an era when most employers are requiring employees to pay more of their own money for health care, giving employees with diabetes what amounted to free comprehensive health care might seem like a counterintuitive way to save money. But that is exactly what executives decided to do a little over two years ago at Mohawk Industries, the largest floor covering manufacturer in the world, with 31,000 employees across the country.

    They began their experiment at the company's plant in Dublin, population 15,800.

Tragic wake-up
   The manager who got an ant bite on his foot stands as a seminal moment for both Mohawk Industries and David Westerfield, a human resource manager at the Dublin plant. The manager, it turned out, had diabetes, a disease that can damage nerve endings and make it difficult for sores to heal. The foot got infected. Gangrene set in. Doctors removed the toe, then they amputated the foot below the knee. Eventually doctors cut off his leg. The hospitalizations cost Mohawk thousands of dollars. Worse, much worse, the worker died.

    "Everyone remembers him," Westerfield says. "As that disease progressed with him, everyone saw what the disease could do, and it's very, very frightening. He was a person everyone loved. And to watch it happen, to see the devastation of it … ."

    Judy Pair, Mohawk's director of benefits, is ultimately responsible for bringing down Mohawk's health care costs, which were rising at the national average of about 10 percent annually. By controlling the symptoms of diabetes, Mohawk hoped to address its two costliest health conditions: heart disease and renal failure.

    Mohawk hired a health consultant who happened to be based in Charlotte and had heard what Asheville had done to reduce the health care costs of its diabetic workers. The consultant introduced Mohawk to Daniel Garrett, a 51-year-old pharmacist at the American Pharmacists Association Foundation and the man behind the Asheville project.

    Garrett, a pharmacist for 30 years, wanted pharmacists to be more than pill-fillers. He wanted them to return to their original role as clinicians advising patients on how to change their lifestyle and take their medicine.

    "Our goal is to transform our current sick care system into a health care system," Garrett says. "Right now in the U.S., you only go to the hospital or your health care only gets paid when you are sick. We feel it's really a transformation to promote and pay for patients to manage their chronic conditions." Then he promises: "Whoever is paying the bill will save money."

    Mohawk signed on as one of five employers across the nation to take part in a pilot program begun in January 2003 that was designed to see whether the Asheville model could work at different companies across the country. Thirty percent of the 770 employees at the Dublin plant are either diabetic or at risk of becoming diabetic, Pair says. That's more than triple the 9.6 percent national average for people over 20 years old, according to the American Diabetes Association.

    Fifty employees signed up for the program. At one of the first meetings, Rigby heard a pharmacist explain why so many diabetics ignore treatment: They feel the diagnosis is a death sentence and they don't know how to begin changing their lifestyle.

    "It was as if they were reading my mail," Rigby says. "They were describing exactly the things I was having. They said, ‘We can help you.' And I said, ‘I need that help.' "

Pharmacists' role
    One of the criticisms leveled against the Asheville model is that it might not work in rural areas, where going to the pharmacy is a long-distance chore. This was the case for some Mohawk employees who found the program proved too demanding. About five dropped out, unable to drive the distance to meet with pharmacists. Others left the company. By the end of the first year, 36 employees remained in the program. Mohawk adjusted by bringing the pharmacists to the Dublin plant. The company contracted with the Georgia Pharmacy Foundation, paying pharmacists $60 an hour to come to the plant two to four days a week.

    Joseph Mengoni, a pharmacist and vice president for the Georgia Pharmacy Foundation, spent two years at the Dub­lin plant meeting with patients.

    "The first thing I say to patients is ‘You and I have something in common,' " says Mengoni, who is 73 and has been a pharmacist for 51 years. "They all look at me kind of silly. ‘I am a diabetic just like you are. It's not a death sentence. If you manage it—and I will help you learn as much as you can about the disease—you can lead a very productive life.' "

    Employees meet with pharmacists during the first year about once every 90 days for 30 to 60 minutes to learn about which foods they can eat, how to check their blood sugar and to monitor for sores on their toes. In the second year, meetings occur about "as often as people need a haircut," Garrett says.

    In the first year, the 256 patients in the pilot program at the five sites met with pharmacists 7.2 times. The rate dropped to 5.8 times in the second year, Garrett says.

    Developing a rapport with employees in a non-clinical setting helps break down the wall of formality between patient and doctor that Mengoni and Garrett believe keeps patients from taking more control of their conditions. People who are diagnosed with diabetes are often scared, Mengoni says.

    "I try to allay those fears right away so they are receptive to what I have to say, " Mengoni says. Pharmacists track a patient's blood sugar level using a glucometer. Failing to follow the regimen incurs the wrath of the pharmacist.

    "He's fixing to clean your plow if you've done wrong," Rigby says.

    Rigby lost 36 pounds. "White food is just a no in our family," Rigby says. He's stopped eating sweets and uses Splenda in his tea. If he eats the wrong food, his pharmacist will reprimand him. Improving his health, and fear of getting removed from the program, motivate him.

    "I can't hide from it, so I've got to do it right or don't participate at all," he says.

Seeing results
    Westerfield has noticed the change in the health of his workers, but both he and Pair wanted to see if that change had a tangible effect on the company's bottom line.

    Pharmaceutical costs went up, as expected, but hospital costs went down. In 2002, the 36 employees rang up a medical bill of $10,396 per employee. In 2004, total medical costs, including the cost of drugs and an on-site pharmacist, were $7,966 for each employee in the program. In 2002, a year before the program, the 36 participants went to the hospital a total of 25 times; in 2004 they went 10 times. Perhaps most startling, Pair says, is that the 36 employees who were absent a total of 252 days in 2002 missed just 14 days of work in 2004.

    "I had no idea it would be so dramatic," Pair says.

    These numbers mirror the savings achieved by the four other employers in the pilot program. Garrett says the companies in the pilot program spent $8,589 per patient in 2003, a figure that was projected to jump to $11,170 by 2005 if they did not change the way they dealt with chronic illness. After enrolling in the diabetes program, their costs per patient dropped to $6,563 in 2005, Garrett says.

    The results have encouraged Mohawk to make the program available at other facilities and to use the same hands-on treatment program for those with hypertension and cardiac disease. The city of Asheville is using the same approach to treat asthma.

    After the diabetes pilot program showed significant cost savings, the Ameri­can Pharmacists Association Foundation began work last fall to enlist more companies into the Asheville model for diabetic disease management in hopes that it might one day become the gold standard for disease management. This is a major challenge. Corporate culture, perhaps as much as cost, will determine the extent of an employer's involvement in the management of chronic disease afflicting its workforce.

    "It depends on a company's perspective around health and how they view the investment of health care for their employee population," says Bonnie Se­christ, a senior consultant with the health and productivity management group of Mercer Health & Benefits. She calls the Asheville model "more forward-thinking."

    "It starts as a philosophical question for the company and then moves into the action phase," Sechrist says.

    Last fall, Mohawk threw a party for the participants in the program, who now number 75, as well as their families and the pharmacists who worked with them. Mohawk catered the event. Mengoni, Westerfield and Garrett were all there to celebrate and speechify. Rigby, who has worked at Mohawk for 31 years, ate broiled chicken.

    Of the program he says simply: "I appreciate it to the max, I really do."

Workforce Management, July 17, 2006, p. 1 -- Subscribe Now!

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