Will Walker leads his company’s disruption of health care
A forging facility is inherently noisy. It was about to get very quiet.
Will Walker, third generation leader of Walker Forge, felt the need to speak to his workforce about – of all things – health care.
The changes he was spearheading required employee understanding and buy-in. Like a father delivering advice to a college bound kid after the dorm furniture has been assembled, he was aware of the moment: it was a singular opportunity to make a big impact.
He scanned the audience, gathered his thoughts, and began.
That truck of yours in the parking lot. Did you buy it without asking the price?
The vast assemblage – eyes wide with disbelief – forged into an audience of one.
That’s the way health care has worked in this country. Time to change that, don’t you think?
Walker Ð autodidact, lawyer, CEO, husband, father Ð firmly believes in the concept of teamwork, no matter the endeavor. Now at the forefront of navigating the complex Ð and in many ways broken Ð health care system in America, the team at Walker Forge has made it a mission to bend the health care cost curve.
And as it is with bending hot metal, they know what they’re doing.
Walking the Walk(er)
Willard Thomas Walker Jr. comes from a long line of entrepreneurs.
Great-grandfather Willard Thornton Walker, a believer in the automobile when horse drawn wagons were still the go-to conveyance, transformed Walker Manufacturing Company from wagon parts maker to manufacturer of a wildly successful product known as the “tire saver.” Indispensable for early 20th century cars, it’s more commonly called a jack.
Grandfather Gordon Walker started Walker Forge in Racine, Wis., in 1950. An English major at UW-Madison with no engineering training whatsoever, Gordon would helm the company for 20 years, during which time he’d see an original workforce of 40 multiply nearly five-fold and a customer list that would grow from local to regional and beyond.
Dad Willard (Bill) Thomas Walker started on the factory floor in 1957 stacking steel. A dozen years later he was president of Walker Forge and succeeded Gordon as CEO in 1972. Under their leadership, Walker Forge broke ground in 1974 for their Clintonville, Wis., location, a 12,000 square foot facility that initially employed 15 workers.
Currently the facility exceeds 500,000 square feet and is home to more than 400 employees.
In 1980, Bill invited his son Will, a recent high school graduate, to spend the summer at the family business, presumably a bit of a test run for the heir apparent.
Will didn’t last a month.
Wasn’t for a lack of ambition, however. Due to a number of business challenges at the time (including the skyrocketing price of oil and a surge of overseas competition), Walker Forge was forced to lay off a substantial number of employees as the country slid into recession, and one of those was Will.
Fortunately, Walker Forge still had Gordon and Bill, two forward-thinkers who kept the enterprise on the cutting edge of forging technology and whose strategic investments allowed Walker Forge to rise, phoenix-like, from the worst manufacturing downturn since the depression.
During this time Will, like his grandfather and father before him, attended UW-Madison. He later earned his law degree at Northwestern University Law School and practiced law at a Milwaukee firm for two years.
Until the Walker DNA kicked in.
“Each generation of my family has come to find out there’s really no better life than to work for oneself,” he said.
In 1990, three months before his grandfather Gordon passed away, Walker joined the family business. Like his grandfather and father when they first started in the business, he possessed little (or no) knowledge of forging.
But, also like them, he knew how to learn, and he knew how to work hard.
Walker jumped in with both feet, hard safety shoes replacing cap-toe oxfords. By 1992, he was vice president of administration Ð overseeing a range of employee benefits Ð then later, treasurer. Next, sales and key account management. In 2001, he became president; a year later, CEO.
An early move on the part of Walker Forge’s new CEO was to reshape employee profit sharing to include all employees, not just salaried personnel. Reinforcing a long-held belief that each and every employee was vital to organizational success, the modification had an energizing effect.
That understanding of engaging people in the pursuit of achieving something long-lasting and worthwhile guides Walker Forge’s approach to company health care in the present day.
Like many companies, Walker Forge struggled with health care costs. CFO Mark Gelhaus put it another way.
“It’s difficult to manage cost without a clear understanding of what the costs actually are,” said Gelhaus. “When you’re fully insured, you’re paying premiums and relying on a lot of things you’re told.”
Once Walker Forge went self-insured, they got a little closer to the costs.
“That was step one for us,” said Gelhaus. “Then things just started to steamroll.”
Gelhaus credits John Torinus, former longtime CEO of Wisconsin-based Serigraph, Inc., and persistent health care industry gadfly, for illuminating a path to manage health care costs and premiums. Not surprisingly, cost management and improving workforce health go hand in hand.
In his book The Company That Solved Health Care, Torinus described the strategies used at Serigraph to not only flatten the trajectory of their health care spend, but to reduce those costs.
After significant study (“We’re ferocious readers on these topics, and John has become a friend of ours”), Gelhaus can eloquently quote chapter and verse regarding the steps companies can take to effect meaningful change:
- Encourage consumerism: Employees start shopping for health care with price, service, and quality in mind.
- Demand price transparency: In most markets, prices for medical procedures vary by a factor of three-to-one. Huge savings are available with the right information.
- Locate centers of value: Better quality and lower costs go together. Find providers and facilities with high quality outcome metrics.
- Emphasize primary care: Convenient primary care options keep people out of hospitals, places Torinus calls “dangerous and expensive.”
- Manage chronic disease: Health care’s 80-20 rule (80% of costs incurred by 20% of the people) can be counteracted with a support system that encourages good health and proactive treatments.
Gelhaus is quick to point out something else at the company that has aided in the effort to manage health and costs.
“Buy-in at the top is important,” he said. “Being committed and getting to the heart of these issues, it’s a team effort, for sure. But Will’s passion for doing right by his employees cannot be overstated.”
Gelhaus highlighted noteworthy strategies that moved Walker Forge along the path: going with an independent third party administrator or TPA (“for flexibility and data transparency”); using care navigation to connect employees with accessible, high value providers (“with Alithias, it’s like having a personal health care shopper for employees”); contracting for bundled health care procedures (“we’ve saved a lot of money with NOVO Health”); finding a best in class pharmacy benefit solution (“ScoutRx reduced our drug spend by 50%”).
The exit from a fully insured world Ð a bygone era at Walker Forge Ð begins with a completely different mindset, said Gelhaus.
“At first, you take your premium increase every year, but after a while when costs start to go way up, you start to ask what caused it. Then you ask yourself ‘Can we control it?’ Finally, you start to peel back the layers and find answers.”
“Most CEO’s and HR managers have come to believe that health care costs can’t be managed. Basically, you just hope for a good renewal and pray for the best,” he said. “After becoming self-insured, we got very engaged and talked with a lot of people in the industry, brokers, consultants, executives to find solutions.”
In Walker Forge’s case, this mindset ignited a movement to lower costs by offering better health care to employees.
“You’re excited then,” said Gelhaus. “And that just makes you want to do more and more.”
Will Walker is big on relationships. That includes the importance of hiring good people Ð and keeping them Ð as well as working with groups and organizations committed to continuous improvement.
“Our employees are the company’s most important asset,” said Walker. “So, we’re very interested in their health and want to keep them healthy, because we want them around for a long time.”
And workers often stay with Walker Forge for an entire career.
Gelhaus, who joined the Walker Forge team in 2017, sensed a worker/culture dynamic early on.
“The people here can do anything, fix anything, and you’re allowed to do that,” said Gelhaus. “Leadership encourages independent, outside the box thinking.”
That outside the box thinking comes in handy when trying to get a handle on medical costs.
As health care is the fourth largest expense at Walker Forge behind payroll, raw materials, and electricity Ð “we have to heat our steel” Ð the team continually looks for new ways and new connections to help manage these costs.
Their plan for 2021 is a doozy.
Walker Forge and three other area employers have come together to build a primary care clinic in Clintonville for their employees. It’s all about making access to primary care easier and developing strong primary care relationships that allow for the identification and treatment of issues before they become catastrophic.
“It’s a critical part of our strategy to provide employees with swift and easy access to primary care,” said Gelhaus. “By building our own clinic, they’ll get fast, appropriate care, and it will be low cost as well.”
The employer-driven clinic is a big-time effort, with lots of moving parts. But it’s a model that has precedent in the state, and Walker Forge has, as per usual, done serious homework. They believe the model will become the trend.
Does the CFO consider it a gamble?
“We’re working with our employees to get these things done right,” Gelhaus said. “If you do it right, there is little to no risk.”
For the CEO, it’s all part of a common thread.
“The primary care clinic is disruptive,” Walker said. “The pharmacy solution is disruptive. The bundled services, that’s disruptive. Disruptive strategies are our best chance for fixing what is really wrong in health care.”
Willard T. Walker Jr. returns one final time to the subject of relationships, the very heart of a company culture of which he is both product and champion. Its pounding rhythm, hammer-like and inexorable, existed before he was born and will remain long after he’s gone.
“Doesn’t matter what obstacles you face if you have the right people,” he said.