Quadracci: Self-insurance works for Quad/Graphics, and it will work for Wisconsin

Health care continues to be a red hot topic of discussion, and for good reason. Access to high-quality, affordable health care is a concern for every American as the federal government continues to wrestle with the best solution.

Here in Wisconsin, Gov. Scott Walker has proposed the state become self-insured in an effort to better control costs while at the same time improving the quality of health care provided to state employees. Quad/Graphics made the move to self-insurance 26 years ago without regrets. It has made health care coverage affordable for our company which, today, employs nearly 20,000 people nationwide and 7,500 right here in Wisconsin.

The success of Quad/Graphics’ health care story began with the decision to take responsibility for our employees’ health care and actively work to provide the best possible care at the most affordable cost. Our assumption was that a healthier workforce would result in lower health care costs, and happier employees would result in greater productivity. In this way, Quad/Graphics moved from being a purchaser of health insurance to an investor in employee health and productivity. Employees benefit from higher quality care with lower out-of-pocket expenses.

Let me share our story and why it’s relevant for the state as it discusses the pros and cons of becoming self-insured.

My father Harry V. Quadracci founded Quad/Graphics in 1971 because he believed in the power of the free market. He understood that by taking better care of his employees they would, in turn, take better care of the company’s customers and the business would succeed. As the company grew, he became increasingly frustrated with escalating health insurance costs over which the company had no control. At the same time, he was hearing all-too-frequent complaints from employees about the quality of care (or lack thereof).

For my father, the solution was crystal clear: bring health care in-house and make it work better for the benefit of everyone. He had no doubt it could be done. He had been bringing various processes and services in-house for years (e.g., computerized machine controls, ink manufacturing, child care, etc.). He saw no reason why health care should be any different. So in 1991, he created QuadMed, our own direct primary care provider. Having already gone self-insured, creating QuadMed was a natural progression for our company.

That decision was — and continues to be — a huge success for Quad/Graphics and our employees. Since 1991, Quad/Graphics’ health care costs consistently have been below the average for the Midwest. To illustrate this point, the clinics serving Quad/Graphics directly in 2016 saw an average savings of 35% as compared to the Midwest average and what our costs otherwise would have been. Helping to drive those savings is a 26% reduction in emergency room visits due in large part to the convenience of our on-site clinics and an overall focus on the health of our employees.

Those savings have enabled us to invest in our employees and grow our business into a world leader in print and marketing services during a time of intense industry headwinds and ongoing economic uncertainty. Last year’s results are not an outlier. In fact, they are directly in line with the impressive results we have seen each year QuadMed has been serving Quad/Graphics’ employees. Some years the cost savings are greater than others but the costs have never exceeded the Midwest average.

QuadMed’s philosophy is exceedingly simple: We’ll keep you and your family members well, and if you get sick, we’ll take care of that, too. From the very beginning, QuadMed had the proper incentives to ensure high employee utilization and engaged medical providers who focus on keeping employees healthy and, therefore, avoid unnecessary emergency room visits and chronic health problems that must be treated over the long term.

At Quad/Graphics, we believe that it is our responsibility to tailor our health care plan in a way that empowers the provider-patient relationship in a creative and forward-thinking way. And self-insurance is what enables Quad/Graphics to provide a quality health care experience at a cost that both the company and employee can afford, and without sacrificing essential services that are important to our employees.

The success of being self-insured has allowed QuadMed to grow to the point where it is now providing direct primary care services to 100 different clients and 264,000 lives across the country, of which 120,471 are in the public sector. QuadMed partners with 15 municipal, county and state governments, including Ozaukee and Washington Counties, and the cities of West Bend, Wisconsin and Wichita Falls, Texas, as well as the Commonwealth of Virginia. QuadMed also partners with 36 school districts who have seen the benefits of this model.

Many of our clients are well-known Wisconsin companies, including Briggs & Stratton, Kohl’s Department Stores, Rockwell Automation, West Bend Insurance, Greenheck Fan and other national brands such as Dow Chemical, Smith & Wesson, Whirlpool and McKee Foods. QuadMed also partners with health insurance providers nationally to further enhance their clients’ integrated health care. All of our clients seek the same outcome: higher quality health care at an affordable cost. Being self-insured and actively engaged in the use and management of their health care has afforded them the opportunity to accomplish this two-pronged goal.

The State of Wisconsin has many priorities that all require adequate funding. Just within the manufacturing sector, it is critical that the state maintain its commitment to K-12 education, technical skill training and transportation infrastructure. Better and more efficient management of the state’s own health care will provide cost savings that can be redirected into these core services that Wisconsin depends on for economic growth.

It is my hope that our elected officials will embrace Walker’s recommendation. In doing so, they will be investing in Wisconsin’s future, giving state employees better care at a lower cost. That's a win for state employees and a win for taxpayers.

Joel Quadracci is chairman, president and CEO of Quad/Graphics.