MERRILL LYNCH: Offers Expanded Benefits
At a time when companies are struggling with higher health costs for employees, Merrill Lynch & Co.'s health plan continues to offer extensive coverage. Unlike managed care plans which monitor access to benefits, the nation's largest investment firm claims it saves money by focusing on quality care and early detection. Some of the approved services offered by the plan include a $6,000 synthetic speech machine for a secretary with Lou Gehrig's disease and a small pool so an employee with multiple sclerosis can receive exercise therapy. The company plan also "sets no arbitrary limits on the number of home health visits or the number of days for inpatient hospital care for mental health, substance abuse or rehabilitation." Merrill executives say they will continue to offer 100% coverage for such services as long as doctors deem them necessary.
Savings Through Prevention
Merrill opened its first on-site health clinic more than 50 years ago. Today, the firm uses these facilities as part of their early detection network. Merrill began developing its health care program in the late 1980s after then-CEO William Schreyer brought in cardiologist Dr. Lonny Reisman to screen Merrill executives for heart problems. Reisman suggested the firm focus on preventive care and later formed Active Health Management Inc. with colleague Charles Blanksteen. Active Health developed a computer program that would review data from doctors offices, pharmacies and laboratory test results and "flag mistakes, misdiagnoses and disasters waiting to happen." Merrill employees hail the system, which underwent testing in 1998, was fully implemented in 1999 and now covers 80% of company workers. Last year Merrill's medical costs per employee, including worker contributions, was $3,600 -- 25% below average costs according to a Towers Perrin study of 54 large companies last summer. Further, Merrill's health insurance costs per capita dropped between 1995 and 1999, and the rate of large claims -- those more than $50,000 -- have also steadily declined. John Brence, a vice president for global benefits, estimates that the company has saved $6.5 million in direct medical costs over a five-year period. The quality-monitoring system is drawing so much attention that six other large firms, including Sears, Roebuck & Co. and Circuit City Stores Inc., plan to implement similar plans. The federal government will launch a pilot program this summer in New York involving 40,000 federal workers and an undetermined number of other workers elsewhere (Gentry, Wall Street Journal, 5/23).