Alliance Coal’s Health Care Program Adds Efficiency

For a company that was spending more than $30 million per year on health care, Paul Mackey, general manager of Human Resources Administration for Alliance Coal LLC, was not satisfied that the firm was getting its money’s worth.
“We were spending a tremendous amount of resources for health care, yet our people were not really getting healthier,” he said. “I have a fundamental belief that if you buy something it really ought to work.”
Tulsa-based Alliance Coal, a subsidiary of Alliance Resource Partners, L.P., operates eight underground coal mining complexes in five states and has been recognized annually since 2003 by BusinessWeek as one of America’s top 100 hot growth companies to watch.
Mackey, who has managed the benefit plans for Alliance Coal for 12 years, set out to get more value for the firm’s health plan dollars while improving the health of its employees.
What he came up with was the Alliance Health Transformation Project, which was recently awarded the SouthWest Benefits Association’s Annual Best of Class Benefits Solution Awards for innovative employee benefits programs.
“Our goal was to more efficiently use our benefits budget to encourage health care that improves the overall health of our employees and not just sick care,” Mackey said. “We provide a unique combination of medical and epidemiological-based health resources to our employees through on-site medical professionals, disease management and prevention programs, and nutrition and wellness services to measurably improve the health and quality of life for participants.”
He said the company, which is self-insured and employs nearly 80 at its Tulsa headquarters at 1717 S. Boulder Ave., “will this year expend in excess of $30 million on health care for 7,000 covered lives” – roughly 2,600 employees and their families.
He said the coal industry offers some of the most generous benefits.
“There are no premiums for our coverage,” he said. “We cover everybody for up to $1 million lifetime maximum, the current drug plan is $5 for generic and $10 for branded drugs.”
“The first thing we had to come up with was how to determine if the money we are spending is worth it,” he said, noting that Americans spend $2 trillion a year on health care, more than any other country in the world, and yet ranks 26th in life expectancy.
“Right off the bat, there is a problem between how long we are living and what we are spending,” he said.
As administrator of the company’s health plan, he realized employees were dying of cardiovascular disease at about three times the national average.
“That is what popped out at me as being problematic, was the rate of early death,” he said.
To measure the value of how the firm’s health care dollars were being spent, Mackey retained the services of epidemiologist Dr. Thomas Wilson of Trajectory Healthcare LLC and medical director Dr. Raymond Wells.
“I needed to measure the baseline,” he said. “Working with my medical director and epidemiologist, we came up with a health assessment tool that included 10 questions and 10 measurements –height, weight, hip circumference, waist circumference, total cholesterol, HDL, LDL, serum glucose – very standard things.”
The health risk assessment tool was implemented using nurse practitioners on site through the health plan.
“This tool is huge,” Mackey said. “We manage individuals, but who manages the group of individuals? Nobody. That is the fundamental problem. What became very clear to me was that nobody was looking at my population and addressing my population’s needs in a systematic and scientific way.”
He said the health risk assessment not only serves as an intervention form for the individual but as a population baseline tool.
Introducing the program in Tulsa in 2006 and systematically adding it to other sites, Mackey said the program now has more than 1,000 participants.
He said the HRA tool found significantly more health issues in the company’s population than was indicated by the number of health care claims. The HRA found more than 80 percent of participating employees had high blood pressure, 67 percentage points higher than insurance claims indicated.
“No wonder we are having heart attacks,” he said. “Clearly we have a problem, and it is not just a little problem. We are paying for 100 percent health care, and we are relying on these disparate doctors in this network to take care of us, and we are relying on participants to take care of themselves. It’s not working.”
“If we allow people to continue to do what they are doing, it’s not working for them and it’s not working for us,” he said. “So we began putting nurses on site and making doctors available, some of them at zero co-pay, and we are going to be making certain drugs free.”
Mackey said the program is important for the health of the employees and the long-term goals of the company.
“We are a long-term employer – people tend to be with us an average of 15 years or more. We are a growing company, We are putting in four new coal mines. We need more employees, and we want these employees to be with us long-term,” he said, adding Joseph W. Craft III, president and CEO of Alliance Resource Management “has been very supportive in this strategy – he is willing to invest in health as an investment.”
He said the idea is that if the company can spend more on preventive care it won’t have to spend as much on sick care.
“Can I say it has proven itself 100 percent? It is too early to say, but we have had some very good indications,” he said.
In 2007, the company’s average health plan increase was 18 percent, while at locations where there was more than 50 percent engagement in this program with a nurse practitioner on site, the increase was less than 1 percent, he said.
“Where there was no nurse practitioner and no involvement on site, they trended up 28 percent, so there are pretty early indications that these services, when they are conveniently available, help our employees engage the population and they have a tendency to use less resources overall,” Mackey said. ?

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