By Evan Falchuk

I spent the last day and a half at the World Health Care Congress in DC.

This was my fifth big health care conference this year.  The WHCC had about 1,500 attendees, which was less than they hoped for but about the same as last year.  It’s a strong showing — most conferences (with the exception of those for health care IT) have been down 25% or more.  I noticed in the exhibit hall that the Era of Big Booths may be over — with one exception, every booth was small and simple.

At all of these events, employers regularly complain about health care costs and talk about things they are doing to control them.  You might think, given the new political environment in Washington, they would now be talking about ways the government could just eliminate those costs by taking over health care.  But in fact, employers are opposed to the idea.

It didn’t seem consistent to me, until I heard someone talk about France.

I was at a presentation by top benefits executives from the US subsidiary of France’s Michelin. They were talking about some innovative programs they had implemented to control health care costs.  When asked by an audience member what people at the parent company in France thought about the US system, one explained that “while they may not understand our health care system, they definitely understand dollars going out the door.”

I realized that this is how it is for US employers.

Health care is a cost problem, and good businesses know how to deal with cost problems.  They put smart people on them, come up with solutions and try them.  If a solution works, the company ends up with a better cost structure than its competitors.  If it works really well, the company might even find it accidentally created a new business line, selling its cost-saving techniques to others.

It’s gotten surprisingly little notice in the media.  Companies have been getting very smart about health care costs, and have learned that the biggest driver is unhealthy lifestyles, especially being overweight, smoking and not managing chronic diseases.  Employers have been busy creating and implementing their own, customized programs to help employees change these habits.  They’ve paired this with efforts to engage employees and make them feel valued as individuals and important to the company.  It’s a combination that’s working.

Companies like Safeway, Wal-Mart, Michelin, General Mills, Marriott and so many others have implemented programs to create a “culture” of wellness among their employees and their families.  Leaders at these companies constantly talk about living healthy lifestyles, and are paying to make it happen.  At Michelin, employees get a cash reward for getting a biometric screening and for participating in company-sponsored health improvement programs.  It even started work-site exercise programs, including yoga (although it found that with a workforce that was 82% male it had to call its yoga classes “strengthening and conditioning”).

General Mills published wellness statistics about its different plants and found that the workers in each one competed with the others to get the best scores for BMI and other important health metrics.  Marriott found that by eliminating co-pays on drugs for certain chronic diseases, more employees followed doctors’ orders to take them, and although Mariott’s drug costs went up, overall health expenses went down.  Abbott Labs brings in motivational speakers and set up weigh-in kiosks in its offices that took pictures of employees as they got healthier so they could see the difference.  All of these companies reported on enthusiastic participation, and a sense among employees that their company cared about their well-being.

Safeway has taken this idea even further, and redesigned its entire benefits plan around this concept.  Employees who live unhealthy lifestyles and refuse to participate in wellness programs pay more for their health insurance — just like a bad driver pays more for  auto insurance.  Safeway did this in a highly positive and motivational way, making available a wide array of free services to help employees be more healthy and enjoy lower health premiums.  The results have been dramatic:  Steve Burd, Safeway’s CEO reported at the WHCC that Safeway’s health costs have been flat since 2005.

Burd claims that if Safeway’s results could be replicated nation-wide, US health expenses would drop from 17% of GDP to as little as 9%, and we would have the best and most efficient health care system in the world.  But he, like most people at the WHCC, was pessimistic about the government’s ability to implement much that was effective.  “You don’t have to wait for the government to do anything,” he said in his address, “you can create your own health care reform.”

Burd believes in his results so strongly that Safeway is creating a new business division to sell its program to other companies.  Abbott Labs has done the same, competing with the dozens of existing wellness companies in the market.  It’s all part of an emerging culture of personal health responsibility that many hope is taking root in America.

And so why do companies seem to want to keep paying health care costs?  It’s not a simple answer, but some of the best companies in the country seem to have discovered that they can have a big impact on costs all by themselves, and that it gives them a competitive advantage in costs and in having a motivated workforce.  Government will continue to have an important role, but it should take note of what these innovators are doing.