Problem
Read the case and answer the questions below: The new Health Transformation Alliance, a collaboration of 38 companies employing 6 million workers (including American Express and Johnson& Johnson) will use data and technology to improve the quality and reduce the cost of health benefits for its employees. The alliance hopes to save as much as $600 million on drug spending, representing a reduction of approximately 15 percent. Part of the savings comes from the Alliance's bargaining power. However, another part of the plan is to change how care is delivered for conditions like diabetes, hip and knee replacements, and lower back pain. IBM's Watson software will be used to "help" select drugs that provide the best value for the money and to predict which employees are more likely to develop conditions such as diabetes so as to take preventive action sooner. To perform these analyses, the goal is to use four years of data on pharmacy and insurance claims and electronic employee health records. Other companies are taking similar steps, sometimes focusing on particular issues that are more critical to them. For example, engine maker Cummins, Inc. is devoting considerable attention to the misuse of prescription opioid painkillers and is working to find alternative pain control methods for employees. Cummins notes the need for caution as most pain medication is legally prescribed and control of pain is critical. At the same time, use of such medication raises safety issues on the job and also can imperil employees' long-term health. According to one estimate, annual medical expenses for opioid abusers are about twice as high as the employer cost for other employees. Cummins relies on programs that use drug test data and works with a pharmacy-benefits manager to track data on opioid prescriptions and attempts to detect pill shopping. The company recently opened a new facility as its headquarters that provide services such as massage, acupuncture, physical therapy, and a full- time pharmacist, all in the interest of finding better and safer ways to control pain. Cummins has also trained supervisors on how to identify employees who may be having problems with painkillers and has trained plant managers on how to triage employees having an overdose.
Task
A. As an employee, what would your reaction be to these initiatives? Explain
B. Do you have ideas for other ways to use data to improve the cost effectiveness and quality of health-related employee benefits?