Wal-Mart and e-Health: Notes from Reporting this week's magazine story

Posted by: Reena Jana on December 3, 2008

In the December 8 issue of BusinessWeek’s print edition, on newsstands now, I’ve got a story on Wal-Mart’s push toward digital personal health records (PHRs) for its eligible employees, in an effort to cut long-term insurance costs.

The retailer is also a founder—along with Intel, Pitney Bowes, AT&T, and other major corporations—of a non-profit organization called Dossia, which will market an online PHR service to employers to offer their staffs in 2009. In the process of reporting the story, I conducted numerous interviews with high-level executives involved in the project, including Michael Critelli, CEO of Pitney Bowes, and Wayne Gattinella, CEO of WebMD, which Wal-Mart hired to design and build the interface of its PHRs (using the Dossia software platform). Wal-Mart’s employees will first use the PHRs in early 2009.

Here, I’ve compiled some of the background material and observations from Critelli and Gattinella.

Michael Critelli, CEO of Pitney Bowes:
When he was first given the task of lowering Pitney Bowes' health care costs, he "discovered that our objectives in the benefits department were misaligned to employee health and well-being. When I brought up issue of health improvement, I got pushback from leaders, and was told we can’t control it. But I knew if we made employees pay more [for their insurance], we had to give them something else."

So he supported on-site health clinics. He says since they were established at Pitney Bowes offices in the 1990s, they have saved the company $2 for every $1 it invested in the clinic, in terms of regaining lost productivity hours due to employee sickness and cheaper long-term insurance bills (based on third-party analyses).

While this isn't a direct example of how PHRs can save companies money, it's one of the only concrete illustrations of how a large company betting that investing in employee-managed healthcare can pay off saw actual results.

Wayne Gattinella, CEO of WebMd:

"We've been building corporate health sites for 10 years, for businesses the size of IBM, Pepsi, and Verizon. We've seen companies who have a strong commitment to personal health services can save money for their employees. That leads to a more productive environment, and less absenteeism. Preventative care has the highest upside for long-term employee healthcare costs. Even our president-elect talked about the importance of preventative care."

Gattinella told me he saw Wal-Mart's deployment of PHRs as a "watershed" event not only because of the visibility of the project or the scale of it, but because the PHRs are offered to a wide swath of employees that includes part-time workers who are eligible, and sales associates as well as higher-level executives. He clarified that he makes this statement not as the head of the company hired to create Wal-Mart's interface for its Dossia-based PHRs, but as an observer of how corporations have investigated or deployed PHRs over the last decade.

 

About

What comes next? The Bloomberg Businessweek Innovation and Design blog chronicles new tools for creativity and collaboration, innovation case studies in both the corporate and social sectors, and the new ideas that have the power to change the way things have always been done.

BW Mall - Sponsored Links

Buy a link now!