Cutting Health Costs: Discounts For The Healthy? One company's health benefits program offers employees a discount if their body mass index is below the obesity line. Safeway Inc. executive Steve Burd says the program has kept costs from rising. Critics say it's a form of discrimination.
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Cutting Health Costs: Discounts For The Healthy?

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Cutting Health Costs: Discounts For The Healthy?

Cutting Health Costs: Discounts For The Healthy?

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It's MORNING EDITION from NPR News. I'm Steve Inskeep.


And I'm Renee Montagne.

This is the week the Senate Finance Committee is expected to vote on a health care overhaul. One of the most influential voices on controlling costs in health care is the CEO of a grocery store chain. Safeway chief Steve Burd thinks his company has come up with the way to save money and contribute to a healthier workforce. It's a program that gives employees a break on what they pay for health insurance, if they lower their cholesterol or blood pressure, quit smoking or lose weight. The idea has a few powerful critics, but Burd says his employees' obesity rates have dropped below the national average, along with Safeway's health insurance bills.

Mr. STEVE BURD (CEO, Safeway): We give people a discount for having a weight level that's below 30 BMI, which is the dividing line between obesity. If it's above 30, that means they pay about $318 more than someone who's in the other camp. But the beauty of our plan is that if you make a reduction of, let's say, 10 percent in your body mass index, we write you a check at the end of the year for making that progress. We do that for smoking. We do that hypertension that is under control, and we do that for cholesterol. About 75 percent of our workforce has voluntarily entered this plan. And in a recent survey of our employees, 78 percent have rated it as either very good or excellent.

MONTAGNE: When you speak about this, you talk about how much Safeway has saved, and you have a figure for that.

Mr. BURD: I do. Safeway has, on a per capita basis, has kept its cost flat now for the last five years. It's a pretty simple formula. Very few companies have done it for one reason or another. And, you know, we're confident that the nation could adopt a similar formula if the legislation gets written correctly, and you could not only reverse the obesity trends. You can reverse the cost curve, as well.

MONTAGNE: Well, it certainly has a commonsense appeal. A person who is obese, many people would say probably should lose weight. But there is still an element in that of discriminating against people if the condition is one that they don't have enormous control over, or for all kinds of reasons, socio-economic reasons, don't - you know, can't get to the gym or don't have the time if they don't have child care, various things like that.

Mr. BURD: Yeah, I would tell you that people that would make that argument don't really understand these four behaviors. Any…

MONTAGNE: Well, we're talking about the American Heart Association, the American Cancer Society.

Mr. BURD: Yeah. I would tell you that even both of those groups are a bit misguided on this. For example, the American Cancer Society has lined up against this kind of incentive, yet they support tobacco taxes because they say it raises the price of the cigarette and it deters people from smoking. In our particular case, when we have an elevated premium for a smoker, that premium goes into our health care fund with the ability to take care of that employee 10, 15 years down the road, should they develop lung cancer. So it does function as a deterrent, but more than that we need that in our health care plan. Otherwise, we have nonsmokers really paying for the medical cost of smokers. And we think that's wrong. We think one could also make a fairness argument for this. Obesity, I would go so far as to tell you that you cannot bend the cost curve on health care costs unless you get obesity under control in this country.

MONTAGNE: What about another way of going at it, say, not selling extremely sugary cereals or not putting them at kids' eye level or backing a tax on junk food and sweets and certain kinds of fried food?

Mr. BURD: Sure.

MONTAGNE: Is that something Safeway - is that something you would look kindly on?

Mr. BURD: No, we wouldn't advocate that at all. I mean, America was built on the notion of free choice, and people are free to choose what they eat and whether or not they exercise. All we would say, in Safeway, is that you should bear the consequences of those free-choice decisions you make. So we don't want to restrict what people buy. I think that takes us in the wrong direction. Why shouldn't I be able to enjoy an occasional french fry as long as I know that I have to make a trade-off and burn those calories off?

MONTAGNE: Steve Burd is CEO of Safeway. Thanks very much for talking with us.

Mr. BURD: You're welcome.

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