Fujitsu is a leading provider of customer-focused IT and communications solutions for the global marketplace. Best known for highly reliable computing and communications platforms, and a worldwide corporation of systems and services experts uniquely position Fujitsu to deliver comprehensive solutions that open up infinite possibilities for its customers'' success. Headquartered in Tokyo, Fujitsu Limited (TSE:6702) reported consolidated revenues of 4.7 trillion yen (US$45 billion) for the fiscal year ended March 31, 2004. Kathy Bartow is responsible for benefit programs at Fujitsu. Her job includes strategic planning, benefits design, communications, and outsourced benefits administration.
Topic: Consumer Driven Healthcare
To access the archived interview, please click here.
To access a schedule of upcoming Reality HR interviews, please click here.
HR.com: Kathy, your company made significant changes to how healthcare benefits are delivered to your employees. Can you tell us why these changes have occurred?
KB: The high cost of healthcare has become an issue over the last 3-4 years and has escalated in importance as it continued its double digit increases. We have our own self-insured medical plan design, so we have had to look for ways where we can still deliver a quality benefit program for our employees and while gaining some control over the rising cost. The employee only pays a portion of that cost, about 15-20%. The company is paying the other 80-85%. We had to look at options. A couple of years ago we brought in several different experts to give us their ideas around plan design options for the future. We are a Shared Services Division within Fujitsu with 20 U.S. companies participating in our Benefit programs. We have an executive benefits team that is comprised of the heads of HR of our larger companies who make the final decisions. We work closely with our consulting firm to prepare information for them.
HR.com: What was the role of the consulting firm?
KB: The role of the consulting firm was to help us understand the future of health care. It was clear that managed care was not making it because there were so many administrative costs. One of the consultants discussed the concept of consumer driven healthcare. Each year employees receive a specified dollar amount provided through a Health Reimbursement Account (HRA) that covers their benefits at 100%. Employees use the money to pay for their routine care and it gives them more control over how the money is spent. This type of consumer driven concept was very interesting to us. We then brought in the major players in consumer driven healthcare. We went through a presentation process and thorough review of each provider and from that we selected Lumenos.
HR.com: What were the factors you were looking for in a supplier?
KB: In particular, we were looking for the customer service aspect. We were looking for a company that would partner with our employees and help us achieve our first year enrollment goal of 15-20%.
HR.com: What about the actual application or technology?
KB: One of the key things in consumer driven healthcare is the technology. The technology is what really makes it work for employees. Employees are making decisions on the actual cost and it is important for them to see the cost of prescribed medications for both brand name and generic drugs. They also need to compare the average costs and quality of doctors, hospitals and treatments. Lumenos offered these user-friendly tools and resources.
HR.com: How did you notify your employees of the changes?
KB: We put out an extensive communications program through Lumenos. We have employees in 46 States. We were not able to physically get to every State but we made it to the larger ones. To communicate the new program we gave educational Web casts and face-to-face meetings for key management. We also sent out announcement letters, an e-mail campaign, brochures, and web ads. In addition, the employees had a chance to view the educational web site in advance, to view the wealth of information available to them. It really interested people when they discovered how easy it was to access the cost of different prescription drugs and doctors. Overall, we had great enrolment success with 34% enrolled in the Lumenos plan for the first year.
HR.com: Have you noticed a difference in the costs to the company?
KB: We´re looking at our new costing and plan design for 2005 and we are seeing a significant reduction in our health care costs in our consumer driven plan. We are noticing a huge increase in the use of generic drugs. The best part about it is that employees are telling us that they like the consumer driven plan .
HR.com: Do you have a program in place to help share the savings with the employees? For instance, do you assign a dollar value of what they get and if they don´t use it they get some of that back?
KB: There are a couple of saving options incorporated into the Lumenos plan. One is an incentive to encourage employees to take the health risk assessment. They will receive an extra $100. In addition to incentives, each employee starts out with $1000 and it goes up from there depending upon whether they have spousal or family coverage. If they don´t use all of their specified dollar amount, they can roll it over into the next year and that continues to happen up to $3000. If they end up with a serious illness in the future, they may end up with the first $3000 covered.
HR.com: What are your next steps?
KB: We have put together a 3-year strategy. We want to watch this design for a year or two and see how it works. We also want to look at ways to get more employees to look at consumer driven healthcare plans.
HR.com: Any words of wisdom for someone looking to implement a consumer driven healthcare?
KB: Look at consumer driven. Be diligent about who you select to deliver it. All health plan providers are not the same. While, they may appear to have the product, what makes it successful is the behind the scenes quality work. Do they have the technology and quality of staff to support it? You need to have a provider that will work with your employees to help them understand the nuances and the changes in this consumer driven approach to healthcare.
Kathy Bartow is Director, Benefit Programs for Fujitsu North America Shared Services. Kathy joined Fujitsu North America Shared Services at its inception in January 2000. Fujitsu North America Shared Services is an innovative and forward thinking Shared Services partner to 25 North American Fujitsu companies. As the Director of Benefit Programs, she is responsible for strategy development, execution, and delivery of benefits to the 6,000 employees of these 25 companies. She is also responsible for the ongoing administration and management of the plans.
She previously worked in benefits and compensation for over 20 years with Amdahl Corporation, Twentieth Century Fox and Westin Hotels. Kathy has a Bachelor of Science degree from the University of San Francisco.