IBM Drops Co-Pays for PCP Visits

November 20th, 2009 | Sources: Wall Street Journal

Subjects:

IBM, one of largest employers in the nation, has decided to waive the $20 co-payments it had charged company-insured employees for visits to their primary care physicians.

Big Blue believes the move can cut its health costs by encouraging people to see their PCPs more frequently which should result in earlier diagnoses and reductions in the number of visits to specialists and ERs.

IBMRandy MacDonald, IBM’s Sr. VP for Human Resources, said the move “is designed to encourage people to get fixed early…we’d rather diagnose a situation and deal with it quickly as opposed to it becoming chronic.”

IBM’s newfound emphasis on primary care is, according to MacDonald, part of its “wellness” strategy which reduces health care costs by preventing illness, or at least treating it earlier. IBM spent $79 million on these programs between 2004 and 2007 and estimates this approach saved the company $191 million.

IBM’s wellness programs pay employees up to $300 per year to take exercise classes or enroll their children in weight-monitoring programs. Soon, it will add a stress relief program to the mix.

“In these economic times, with the loss of home equity and the loss of savings, we are seeing stress-related issues” in employees, MacDonald told the Wall Street Journal.

Helen Darling, president of National Business Group on Health, called IBM’s move “very unusual. The number of employers who cover primary-physician visits without a co-pay is minuscule,” she said.

IBM has 115,000 US employees and spends nearly $1.3 billion per year on their health care. Its benefit practices are watched closely by other employers, and it is known to be a trend-setter in this area.


 

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