Arrowhead Health Centers CEO Ken Levin was featured in the April issue of inBusiness Magazine. The article talked about how healthcare companies and organizations are adapting their business models to use healthcare as a means of good business practice. Ken talks discusses Arrowhead’s recent move to offer free healthcare to their employees and families.
Using Free Healthcare as a Tool to Reward and Recruit
From the inbusinessmag.com article:
Arrowhead Health Centers, began providing free healthcare to its employees and their families. “This evolved over a decade — the realization that we had developed a healthcare model to offer superior care at a lower cost,” says Ken Levin, CEO of Arrowhead Health Centers. The key was, “we could keep people healthy, and the healthier people are, the lower the cost of care is.”
The decision to become self-insured as an employer was in 2008, Levin relates. “With premium prices going up 20 to 30 percent a year, it takes a toll on a small business’s ability to invest in its future and grow. [Then-CEO David] Berg looked into self-insurance, and developed a plan model for employees that consistently brought down cost per insured.” According to Levin, the annual price per insured that leading national healthcare company Kaiser quotes is $6,500; Arrowhead’s annual price per insured is $2,500.
Over and above what Levin calls the “tried and true practice of taking care of our employees,” Arrowhead’s leadership “came to realization that we could reframe healthcare as being an expense of being in business to become an asset to recruit and attract the best employees in the marketplace.” Free healthcare, then, is a tool for recruitment — and, perhaps not surprisingly, applications in February 2016 were triple the number in February 2015.
Levin emphasizes that healthcare is not free to Arrowhead. “We do spend a substantial amount of operating income on making healthcare free to employees,” he says, adding, “We believe other employers can create a similar model for their business.” Arrowhead currently employs about 195 people, and Levin shares the cost of their healthcare is 2.5 to 3 percent of revenue — which he estimates is about one-third what it would cost to buy insurance on the open market.
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