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Virgin HealthMiles Responds to New McKinsey Study: Says Prevention Is Key to Lowering Healthcare Costs, Regardless of Source of Insurance


June 9, 2011 - BOSTON, MA

Regardless of whether American employees obtain health insurance from their employer or purchase from subsidized exchanges, prevention is the key to reducing healthcare costs, says Virgin HealthMiles. This statement is in response to a study released this week by McKinsey & Co. suggesting the Affordable Care Act (ACA) might drive as many as 30 percent of employers to eliminate employee healthcare plans once the Act is fully in effect by 2014.

"The government is attempting to broaden access to the current supply of health services, but not addressing the root cause of the dramatic increase in demand," said Chris Boyce, CEO of Virgin HealthMiles. "The reality is, where people get their insurance has little impact on lowering healthcare costs and making insurance more affordable, the ultimate goal of healthcare reform. Instead, our system needs to focus on prevention and offer financial incentives to inspire Americans to take more responsibility for their health -- the equivalent of a 'good driver discount' for health insurance. Otherwise the discussion surrounding the source of health insurance is nothing more than reshuffling of the deck chairs."

While the ACA is mired in the politics of Washington, employers can't afford to wait and must address the issue of rising healthcare costs. Seventy-five percent of today's healthcare costs stem from preventable chronic diseases like heart disease, Type 2 Diabetes and some forms of cancer. What's more, the productivity impact of these conditions is significant for organizations. The lost economic output associated with chronic conditions totals more than $1 trillion(1), including time lost for employee and caregiver workdays and individual and caregiver presenteeism.

Forward-looking businesses are taking action to lower healthcare costs by implementing programs that help employees make healthier lifestyle choices. These companies understand the significant medical and productivity cost impact of an unhealthy workforce and recognize the vital role they play in encouraging their employees to be healthy. Studies prove the workplace is an ideal environment for fostering good health. They provide tremendous social networks to keep employees engaged and motivated in good health. Effectively structured and implemented incentives-based wellness programs drive down healthcare costs by keeping people healthy and preventing the onset of chronic conditions. Leading businesses know they must create a workplace culture of health to avoid a profitability crisis of epic proportions.

About Virgin HealthMiles
Virgin HealthMiles provides technology-based employee health programs that pay people to get active. The company's Pay-for-Prevention™ approach, based on physical activity and healthy lifestyle change, attracts an average of 40 percent of employees who participate, which helps organizations reduce medical costs and improve employee productivity and satisfaction. The program is offered by employers, government entities, and insurers. Over 120 industry leaders representing more than 700,000 employees across the U.S., including American Diabetes Association, OhioHealth, Ochsner Health System, MWV, SunGard, SunTrust, and Timberland have selected Virgin HealthMiles' award-winning program for their employees. The company is a member of Sir Richard Branson's Virgin Group. For more information, visit www.virginhealthmiles.com.

(1) The Milken Institute, http://www.milkeninstitute.org/publications/publications.taf?function=detail&ID=38801018&cat=ResRep

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