The Employer-Led Health Care Revolution

In the years leading up to 2009, Intel tried a number of popular approaches to tame its soaring health care costs. To encourage employees and their families to be more involved in the purchase of their care and aware of its actual cost, the company implemented “consumer-driven health care” offerings such as higher-deductible plans with lower premiums, tax-advantaged accounts, and tiered-provider options. To save employees time and improve access, it opened primary care clinics at Intel work sites in Oregon, New Mexico, and Arizona. It offered wellness and fitness incentives, including optional annual health checks that would reduce premiums or deductibles, health coaches, and free on-site fitness classes.

While those programs generated improvements in employee awareness, engagement, and accountability, it had become clear by 2009 that they alone would not enable Intel to solve the problem, because they didn’t affect the root cause: the steadily rising cost of the care that employees and their families were receiving. Intel projected that expenditures for its 48,000 U.S. employees and their 80,000 dependents would hit $1 billion by 2012—triple the amount it spent in 2004. Intel’s leaders were torn: They wanted to protect the bottom line but were reluctant to shift more of the cost to employees, concerned that it would become harder to attract and retain top talent.