Stopping the rise in costs

Mount Pleasant's steady increase in health insurance costs led it to revamp its system, an effort that paid off last year with the first decreases in a decade.

Year No. of workers Town's cost Town cost per worker

2013 520 $5.1 million $9,781

2012 527 $5.7 million $10,744

2011 536 $5.6 million $10,466

2010 552 $5.2 million $9,409

2009 542 $4.3 million $7,851

2008 552 $3.9 million $7,148

2007 554 $3.5 million $6,354

2006 535 $3.3 million $6,141

2005 523 $3.2 million $6,081

2004 497 $3.1 million $6,193

2003 495 $2.5 million $5,081

2002 488 $2.2 million $4,448

Source: Town of Mount Pleasant

MOUNT PLEASANT - Mari Hendrickson, a financial planner in North Charleston, had grappled with health problems that included arthritis and weight gain that made even the prospect of a short walk seem like a chore.

How Mount Pleasant has tried to curb its insurance costs while promoting employee health:

Self-insured: The town is self-insured, which it estimates saves 8 to 12 percent per year. Its insured pool of approximately 1,250 employees and their dependents helps spread the risk.

Wellness program: In 2005 the town launched an ambitious wellness program, offering employees free pedometers, workout bags, flu shots and other services. It also opened an employee fitness center that never closed and offered yoga, zumba and pilates classes and offered nutrition services.

Classes: The town has offered dozens of lunchtime classes on everything from skin cancer to avoiding holiday weight gain to reading labels on food. It also launched a points program that let employees have a day off, a digital camera and all sorts of other prizes by quitting smoking, participating in charity walks and runs, biking to work and exercising at the fitness center.

Employee involvement: In 2007 the town formed an Employee Wellness Committee of 20 employees, one from each department, to oversee the wellness initiative.

Health screening: In 2008-09 the town began health screenings and gave employees who participated a 20-percent break in their insurance rates. Most employees signed on, and two of those who were screened were sent to the emergency room.

Wellness Center: In 2009 the town opened an employee wellness center, which operated from 8 a.m. to noon five days a week, with a nurse and a medical assistant to do health assessments, help employees manage disease and to write some prescriptions.

Discounts: In 2010 the town required employees to have health reimbursement accounts to get a 20-percent discount, and 85 percent signed up, though the number would fall to 51 percent by 2012. The town offered free prescriptions and supplies for diabetics and those battling high blood pressure.

Lifestyle option: In 2013 the town began offering a healthy-lifestyle-plan option that would cost less than half of its basic health insurance plan. To qualify, employees and their dependents had to get health reimbursement accounts, seek treatment if diagnosed with high blood pressure, diabetes, high cholesterol or obesity, and to get age-appropriate tests, such as a colonoscopy. The participation rate is 93 percent.

Prescriptions: The town also changed pharmaceutical benefit managers and saved about $280,000 last year by getting refunds offered by some drug companies.

Advocate program: On July 1, the town began a Medical Advocate Program. Employees can call a number to get information on the quality, price and location of local providers of different medical services, such as MRIs. When they make the call, they get $25; if they go with MAP's recommendation for an outpatient or inpatient procedure, they receive another $125 or $250, respectively. The program saved the town almost $60,000 in its first six months.

Smoking is extra: On July 1 town employees who did not sign an affidavit saying they don't smoke had to pay an extra $10 biweekly. The town will pay 75 percent of all costs for most smoking-cessation steps, such as nicotine gum and patches

Doc on call: The town hired its first doctor in November and expanded its Employee Wellness Clinic hours to 8:30 a.m. to 5 p.m. It plans to hire a second female doctor soon. The town will have clinics at Mount Pleasant Town Hall and in North Charleston and will be on call 24-7.

"It's not good when you're self-employed and you don't work," she said, "but I just didn't have the energy."

Her health insurance was provided through the town of Mount Pleasant, where her husband Paul works as a firefighter. A few years ago, the town offered to discount employees' premiums if they got a check-up. Hendrickson agreed and was floored by the results.

"Never in my wildest dreams did I expect diabetes," she said. The diagnosis led her into the town's wellness program that reformed her eating and exercise habits, which in turn addressed her diabetes, helped her lose 55 pounds and qualify to have both her knees replaced. In April, she plans to do the Cooper River Bridge Walk for the first time.

It's the kind of success story town officials hoped for when they decided to experiment aggressively with the town's approach to health insurance, tackling one of the great pocketbook - and political - issues of the times.

The town also has seen another success: Last year, its health insurance cost per employee dipped below $10,000 for the first time in years, the first reduction in more than a decade.

'It's Busted'

The town's decision to revamp its health insurance stemmed mostly from the ever-bigger bite it was taking from the town budget.

In 2012 the town had 8 percent more employees than it had a decade earlier, but its health insurance cost - total and per employee - had more than doubled in that time.

Instead of reducing employees' benefits or asking them to contribute more for a fourth time since 2008, Town Council agreed to let Administrator Eric DeMoura try to figure out another approach.

"We had tried all the other methods to reduce costs in health care, all of the traditional administrative moves - lower the benefits, raise the costs, higher deductibles," he said. "We tried all that, and it wasn't working."

If unchecked, the rising costs would threaten the town's services or lead to a tax hike - or both, he said.

"They've given us the latitude to take a risk, which is hard to find in government," DeMoura said of council members. "We could fall right on our face with this. We're all in new territory here."

Working with a consultant, the town began a years-long project to revamp how it provided health care with a focus on three areas - promoting employees' wellness, bringing market forces back into play, and making it easier for employees to receive primary care.

DeMoura, who became administrator in 2010, took a personal interest after his young daughter began suffering persistent, mysterious headaches. He had the town's Human Resources Department to inquire about what different providers charged for an MRI scan, and HR Officer Meghan Kelly made some calls.

"We started calling places, and they couldn't tell us what the price tag was going to be," she said. She persisted and found prices that ranged from $430 to $1,800 for the MRI scan.

She priced other services and found that the cost of a colonoscopy, for example, ranged from $897 to $5,561, while a knee arthroscopy and repair ranged from $2,700 to $16,000.

"We were shocked when we saw them, the variances," Kelly said. "These are real numbers in the real tri-county area."

Since 2005 the town had worked with Rick Gantt of Benefit Control Companies on wellness and other health initiatives, such as having an on-site health clinic with a nurse. To reign in costs more, without sacrificing quality, they agreed to do more homework on researching more ways to save.

Gantt provided town officials with the book, "The Company That Solved Health Care," a how-to written by a former journalist and Wisconsin businessman John Torinus, who was fed up with rising costs. A delegation of town employees paid Torinus a visit.

Torinus said his book mostly offers common-sense management, and he likened a high-performing health care plan to a safe, fast car: Everything from the motor to the drive train to control systems to the tires has to work right.

"Once you do all of those pieces, which are pieces of best practices, you've got a car that runs down the road at 100 miles per hour," he said in an interview. "There is a whole new business model out there that is replacing the busted one. I've never heard anyone argue that the current business model for health care isn't busted. It works pretty good on the medical side, but on the business side, it's busted."

Doc Out of the Box

Mount Pleasant had been doing a wellness program for years, but realized it needed to do something more.

Finance Director Charlie Potts said the town agreed to give employees financial incentives based on participating in programs designed to make them healthier - and to reduce health care costs. In the case of a family, employees in the town's healthy lifestyle plan pay only $100 - not $200 - a pay period and save $2,600 a year.

"Every employee likes to save money," he said. "And you're providing a better quality of health care. The really sweet spinoff is we think it will save the town money too."

But the biggest change came last November, when the town hired a primary care doctor to work out of town hall.

And it's not just any doctor. John Holeman, 59, admitted that he messed up in college the first go-round and eventually worked as a truck driver, a welder and a deckhand on a barge before forming his own dredging company. He sold the company, tried retirement for two weeks, then eventually enrolled in medical school at age 50.

He worked in a conventional general practice in Louisville, but didn't care for it because he was expected to keep files on 1,500 to 2,000 patients and field calls from many more. He settled into a career teaching and working one night at a free clinic when a desire to be closer to his grandchildren made him search for a job in the Lowcountry.

Paladina Health, a private company that the town chose to help it contract with two doctors, called Holeman, who initially said he wasn't interested. Then he heard the company's pitch and changed his mind.

"I said, 'So you're going to let me have 30 minutes to visit with my patient? And an hour on my first encounter?" he said. "OK, you've got my attention because I can now practice medicine the way I wanted to."

He began work in November, and his start has been a bit rocky. The town has had trouble hiring a second doctor to share the load, and Holeman's office suite in town hall is cramped and wanting for privacy. But he said employees have welcomed him, and he is optimistic about the future.

"This model is designed to be what I think is good health care, and that's where we have more time with our patients, where we get to know our patients because there are fewer patients," he said. "If you're sick during the week, you'll get seen within 24 hours. Our goal is to try to get you the same day, but sometimes that's not practical."

His patients have his cellphone number and email address.

"The bottom line is you've got to keep your eye on the goal, and the goal is better medicine," Holeman said. "If we manage to cut some costs, that's great."

Other governments

Mount Pleasant isn't the only government searching for a better way, but it's the only one in the state to hire its own doctor or give out financial incentives of up to $250 for employees who comparison-shop for the best prices.

Rock Hill and Aiken have wellness programs that involve the use of nurses and on-site, clinic-type services, said Reba Campbell of the Municipal Association of South Carolina. The city of Charleston also has a wellness program, but not an on-site clinic.

The city of Clemson was one of the first to provide primary care at a city-university partner practice.

Charleston also has structured its plan to give employees a financial incentive to get an annual physical, make regular trips to the dentist and get certain cancer screenings. Its employees also have health-reimbursement accounts that encourage employees to shop around for the best price for a procedure, as if they were shopping for a car or TV.

The city was able to budget a 2.1 percent increase last year, well below the trend line, said Joleen Deames, the city's assistant chief financial officer.

"Our emphasis has been on prevention and wellness, and I think over the years we're starting to finally see the benefits financially of that," she said.?

'Are we competing?'

Mount Pleasant's health care revamp has had the support of Town Council, but it has been driven by staff more than by anyone seeking to score political points.

The change was not an issue in the town's 2013 elections.

Mayor Linda Page was among the most wary, but she said recently her previous concerns have eased somewhat.

"I'm a little concerned about having our own doctor. Are we becoming a business? I'm always concerned about municipalities being in business. Are we competing with our taxpayers?" she said.

But she said that since Holeman arrived, most doctors she has talked with appreciate the town's new approach. "I haven't heard the push back that I thought I would," she said. "It's certainly hard to balk at something that's obviously working so well."

DeMoura, the town administrator, said he still figures there could be obstacles, and there's no guarantee that the numbers will continue to improve.

"But I'm willing to take the risk because something has to be done here," he said. "The only way this will be successful is if the employees buy into it."

Derreck Seabrook, 47, is on the maintenance crew for the town's buildings, parks and playgrounds, and he had smoked since he was a junior in high school.

Seabrook said he dutifully attended six weeks of town-sponsored smoking-cessation classes, and the town provided him nicotine patches to curb his craving to light up. This month marks a year since he had his last cigarette. While he was one of the few in his class to quit successfully, he said the town's wellness program changed his life.

"I feel a lot more energized now," he said. "My eyesight got better. With my diabetes, my numbers went down. A lot of things improved. I can breathe."

Reach Robert Behre at 937-5771.