Reducing Health Care Costs: The Safeway Model

By Rachel Stockton

NPR recently interviewed Steve Burd, the CEO of Safeway, regarding his company’s unique wellness incentive plan; it’s a system that he believes could turn health care reform around should other companies decide to implement the program.

As Food Consumer has reported over the last several months, ad nauseum, the vast majority of doctor visits in the United States are the result of life style issues. And the most common life style problem that generates the most doctor visits can be attributed to obesity.

Many legislators and health care providers believe that changing health care reform can only come about if something is done about America’s obesity problem. Of course, it’s not that simple. There are a myriad of reasons why some people are not able to gain control over their weight, such as socioeconomic issues, heredity, etc.

Despite this, Burd and others who support Safeway’s health care plan say that one way to motivate people to lose weight and bring their "numbers" down, is to pay them for it.

Specifically, Safeway’s plan offers a discount on health care insurance if an employee’s body mass is under 30. And that’s not all; should an employee successfully lose weight, they are reimbursed with a check at the end of the year.

And losing weight is not the only unhealthy habit that Safeway is willing to compensate its employees for. Quitting smoking, reducing cholesterol and lowering blood pressure are all rewarded at the end of the year.

Burd’s philosophy is backed up by Safeway’s financials; health care costs have remained flat over five years.

When asked if the company should take the issue one step further and not sell sugary foods or fat laden items to its consumers, Burd made it clear that he would never support taking away a person’s free choice: "All we would say, in Safeway, is that you should bear the consequences of those free-choice decisions that you make. So we don't want to restrict what people buy. I think that takes us in the wrong direction. Why shouldn't I be able to enjoy an occasional french fry as long as I know that I have to make a trade-off and burn those calories off?