Some ideas on health care we probably will not see in the new legislation

Very interesting op-ed piece on the employee health plan at Safeway in last Friday's Wall Street Journal: "How Safeway Is Cutting Health Care Costs." In a nutshell Safeway's program provides discounts on health insurance premiums, copays, and deductibles to employees who meet standards for weight control, smoking, and other conditions that are known to contribute significantly to reduced healthcare expenditures AND are potentially controllable by employees. The article (written by Safeway CEO Steven Burd) claims that all testing and monitoring is done by an outside party, so at least in theory Safeway cannot arbitrarily limit the number of bonuses it hands out.

Does it work? Safeway has held its health care costs flat over the last four years, whereas the average employer has seen these expenditures rise by 38 percent. Now obviously there are many other factors driving the increase in health care: rising incomes translate into more demand for any normal good, third party payment dominates, tax subsidies for those insured by their employers, etc.

Burd's article focuses on the plan for nonunion employees; apparently the plan for employees covered by collective bargaining does not yet include these features (and he does not mention what has happened to costs in that plan). My guess is that this tells us a lot about the odds that nonsmokers will get a rebate on their health insurance premiums under ObamaCare.