Data in hand, Mayville Engineering Co. leads a by-the-numbers charge to reduce benefit costs while improving employee health.
Cliff Sanderson knows his numbers. It’s a simple strategy that has served him well in his career in human resources.
It’s a recipe for success that engages employees from the bottom to the top of an organization, empowering them to make better decisions because they understand the benefits that follow.
Since joining Mayville Engineering Co. as the vice president of human resources, both employer and employees have deployed the mantra not just to control the escalating costs of health care, but improve quality and produce savings that could be reinvested in additional benefits for the greater MEC community, including the launch of an on-site primary care clinic in 2019.
A simple formula. Meaningful results.
“There is not a single person out on the floor who does not know the production rate of the machine they are running, or how many vacation days they get and how many they have used,” Sanderson said. “All I have done is said ‘Great, you know those numbers, here are some new ones. What is your blood pressure? Glucose? BMI? Is it better or worse than last year?’”
For Sanderson, those simple, biometric numbers can be the difference between spending a few dollars a month to set an employee up with a maintenance drug for blood pressure or the hundreds of thousands of dollars on an ER visit for a heart attack, or worse.
By focusing on employee knowledge and taking control of maintenance health issues before they reached critical stages, the company has bent its health care cost curve nearly flat the past six years. Adding the NOVO Health Bundled Payment Program for Health Services in 2018 further empowered employees to choose high quality, independent specialists for certain health care needs, providing even greater control of costs and outcomes.
The Bundled Payment Program produced more than $200,000 in savings for MEC from the first 15 patients, and has quickly been embraced by employees, producing more than $500,000 in just two years since the program was installed.
It’s a boost for the bottom line, and since MEC is an employee-owned company, the employees have a vested interest in keeping that healthy.
“There will always be those parts of your medical spend you can’t control — the catastrophic diagnosis like cancer — but you can get out front of it.
In the beginning
The know-your-numbers approach was not always in vogue at MEC.
When Sanderson arrived at MEC in 2013 — he spent most of his career in Illinois and readily admits to being a recovering flatlander – the company bought its health insurance like many other companies, chasing the largest discount they could obtain against rapidly escalating premiums.
As Sanderson recalls, the focus was on total cost and which carriers were hungriest for the business. The insurer changed almost every year and there was very little examination of the details to determine what the costs drivers were. The company was mostly chasing the promise of a great rate.
“It’s a lot like shopping at a retailer where everything is always 30% or 40% off,” Sanderson said. “That sounds good, but 30% to 40% percent off of what is the question that didn’t get answered.”
That’s when Sanderson began to install the building blocks of his plan. Drawing on his experience at previous companies, the first step was introducing the biometrics program where employees received their routine screenings and learned the numbers of their basic health information.
The point is to make it easy for them to know the information, Sanderson said.
As the employees became more engaged in understanding their health information, it was time to turn that knowledge into action. The next step was to make it simple to take action on any existing conditions — to make sure folks were buying and taking any needed maintenance medications. The company launched MECmeds, a mail-order prescription service that delivers the drugs to the employee’s home.
Not only does MEC pay 100 percent of the costs, but the company also opened the program up to spouses as well.
“This is where the math is, right here,” Sanderson says. “So I am going to pay screenings and generic preventative drugs for the year. For what I pay, if I prevent a heart attack every other year, then I come out ahead.”
With employees seeing results and buying into the program, Sanderson and his team began looking for other, larger controllable costs in MEC’s annual medical spend. Attention soon focused on elective procedures in high-cost areas such as spine or orthopedics.
It became apparent that the provider groups MEC’s employees were being steered to by the local health systems and insurance networks were not necessarily the most cost-effective option available, Sanderson said. “I’m not really interested in paying for their overhead or administrators.”
That’s when MEC began to take a long look at NOVO Health’s Bundled Payment Program.
MEC’s senior human resources generalist Denise Yanke had met and gotten to know members of the NOVO Health team during visits to the annual Wisconsin Society of Human Resource Management conference and found the potential of the Bundled Payment Program tantalizing. She and Sanderson started asking for more specifics and had the NOVO Health team make a formal presentation to MEC’s leadership group.
“The more we talked with them the more we were interested. When we talked to other companies that used them, it became even more clear we should do this,” Yanke said. “Why wouldn’t we try this.”
Having previously converted to a self-funded model for health insurance, MEC installed the NOVO Health Bundled Payment Program for Health Services in 2018. The savings were dramatic and immediate, with nearly $550,000 in accrued savings on more than 40 procedures.
“If we pay just the average Wisconsin cost for all of those procedures, the cost is in excess of $1.1 million,” Sanderson says. “When we first heard the NOVO pitch, we thought it was too good to be true. Now that we are into it, it’s actually better than promised.”
It helped that one of the first patients in the program became one of its most unlikely advocates.
It takes just one
With any new program — particularly one involving a change in employee health care benefits — there is likely to be skepticism.
For MEC, though, a cosmic alignment of fortune turned what could have been one of the program’s greatest skeptics into one of its most vocal proponents.
The employee needed both of his knees replaced and had a procedure to replace one performed at the local health system hospital and it did not go well. He had missed more than a month-and-half of work and had a slow recovery. The discomfort was so bad he had been putting off getting the second one done.
The HR team at MEC spent considerable time just convincing him to get a consult from the orthopedic surgeons that were part of the NOVO team. He went, took a look and decided to give it a try.
What a difference it made. Not the gregarious type – indeed, he was considered quiet, gruff and perhaps a bit grumpy – the employee was back home in two days and back at work in two weeks. He could not stop talking about the positive experience he had.
As Yanke and the NOVO Sales team continued to introduce the bundled payment program in a series of 26 training sessions spread across MEC’s multiple facilities in Wisconsin, having that type of advocacy really helped sell employees on the benefits of the bundled payment program.
“It was fortunate for us that happened so early in the program. We were like ‘Wow! Let’s get him in front of the group.’ And he was willing to talk with anyone who would listen and became our number one advocate,” Yanke said. “It’s one thing to hear about the program in a presentation and have the magnet on the fridge, but when someone comes back to work and is waiving their arm or knee around saying ‘you have to try this!’ That’s the thing that really sells them.”
Building momentum
The success stories keep coming for MEC.
For years, Mike Schaefer had tolerated the pain building up in his shoulders as best he could. Some days, he could not even lift his arm more than a few inches. Not an ideal situation for someone whose job as the shipping and receiving coordinator at MEC involves a lot of arm movement.
The cortisone shots he had received over the years just weren’t cutting it anymore. Finally, in March of 2019, he decided to give NOVO Health a try. He’s a convert now.
“I haven’t felt this good in a long time,” Schaefer said. “I went up there, got the MRI and they showed me exactly what they were going to do. I had the procedure and I have felt great since.”
Particularly pleasing to Schaefer was the experience. He had nothing but great things to say about the staff at Orthopedics & Sports Institute, the NOVO partner that repaired his shoulder, and was favorably impressed by the facility.
“Some places, you just get a sour taste and everything is frustrating, and you know you would never go back,” Schaefer said. “At OSI, it was great from the first second and I would definitely go back if I have to.”
For Jamie Eithun, it was not only the quality of the experience that impressed her about OSI, but it was the speed in which they were able to see her and schedule the procedure to repair her broken ankle.
Eithun, an organizational development manager at MEC, had slipped down a staircase in her home and after visiting a local emergency room, was told she needed to see a specialist in two days. But when she tried to contact the specialist at the local health system, the earliest they would see her was more than a week out. Moreover, she found herself having to deal with additional insurance company requirements to see the specialist.
Remembering NOVO Health from one of the benefits meetings with Yanke, and after reaching out to Yanke, she had an appointment at OSI the following day.
“It’s an amazing experience. Everything just takes care of itself,” Eithun said. “My daughter came with me and both of us walked away from it saying we had never had a medical experience like it. It is the easiest experience you will ever have. You call the number, and they take care of everything.”
Eithun is back to work and can be seen these days with a scooter in the halls and offices of MEC. She is scheduled to have the walking cast off shortly and is looking forward to being able to drive herself and is optimistic about the weeks of therapy ahead.
“The doctor is not usually a positive experience, but this was the easiest experience I have ever had in a medical setting,” she said.
Another piece of the savings puzzle
The team at MEC is planning for more great stories like those.
Armed with the savings that have been achieved using NOVO Health’s Bundled Payment Program for Health Care and the other programs launched since 2013, MEC launched a well-received on-site clinic that employees can access for primary care.
Not only does it provide care in a convenient environment for employees – fewer long drives and missed hours at work — but it gives MEC and its employers a greater role in patient steerage. The clinic provider is not beholden to the local health system and subsequently has greater freedom when it comes to recommending follow up care.
Sometimes it is the specialist within the health system. But referrals to independent providers – such as those in the NOVO Health provider panel — are also common. For the MEC team, the goals are to get the best result for employees at the lowest cost.
Of course, they ran the numbers first. “What we are seeing the past few years is that we have been able to fight the natural inflation in health care and keep the cost curve close to flat,” Yanke said. “A lot of the programs we have started are just a year or two old, and I think we will really see them pick up speed in the next few years. The next phase is to make sure our employees have all the tools they need and know how to use those tools.”
