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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.



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