LAS VEGAS — Noting that he had recently met with two of the three remaining presidential candidates to discuss Safeway's success in lowering health care costs for its employees, Steve Burd, chairman and chief executive officer of Safeway, reiterated his call for market-based health care reform here during his keynote address at the United Fresh Produce Association's 2008 trade show.
“Produce is the medicine cabinet of the future. There's no better business to be in,” Burd said to a round of applause, explaining that Safeway has reduced costs partly by encouraging employees to adopt healthier lifestyles.
As has been widely reported, Burd is opposed to nationalized health care, and believes if market forces can be brought to bear on the country's current inefficient system, costs could be drastically reduced — up to 40%, he claims — and quality care will be affordable to everyone in the country.
To this end, Burd last year helped found the Coalition to Advance Healthcare Reform, which now counts 50 large businesses among its members. And, earlier this year, Safeway launched its own health care services company to help other businesses implement the strategies that have helped it cut costs while maintaining quality.
“In real markets, costs go down and quality goes up,” Burd said. But, in the current U.S. system, patients have no way to compare prices of preventive care measures, such as colonoscopies or blood tests, from doctor to doctor — or to check on those doctors' records of success with different patients.
As a result, health care providers have little incentive to be cost-conscious, Burd said, and adding transparency to the system could potentially cut costs by 20% nationally. Safeway, he explained, introduced transparency by comparing the price of major preventive care measures — such as cancer screenings — in each of its market areas, averaging a fair market rate for these services, and then listing physicians who offer each specific service at or below that rate.
Safeway compensates employees for 100% of costs up to but not exceeding the approved rate. When employees can see for themselves who is charging what for very similar health care services, they tend to choose the more fairly priced options, rather than paying out of pocket for the difference charged by a higher-cost provider.
This type of information could be made available to everyone in the country in about six months, he said, by simply passing legislation to unlock parts of the nation's Medicare database.
“The Medicare database is sitting there with all of this information,” he said. “All we need is a piece of legislation passed that makes that information public. People will make better choices and people will live healthier lives.”
