Pitney Bowes: Employer Health Strategy
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Read the case "Pitney Bowes: Employer Health Strategy" from the Harvard Business School, by Michael E. Porter and Jennifer Baron, February 24, 2009.
a) Why was Pitney Bowes spending so much on employee health at a time when most organizations were cutting health benefits?
b) How did the company's health and wellness programs add value?
c) Evaluate the company's approach to selecting and designing a health plan, and pharmacy benefits.
d) How would you improve the company's plan? What challenges and constraints must be addressed?
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This solution discusses the Pitney Bowes case in 867 words.
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a) Why was Pitney Bowes spending so much on employee health at a time when most organizations were cutting health benefits?
Pitney Bowes was spending so much on employee health at a time when most organizations were cutting health benefits because they thought it would be most beneficial for them in the long run. Pitney Bowes believed that if they provided successful and good health care benefits for their workers, that they could reduce the amount of workers who missed time from work due to health or mental illness.
Pitney Bowes determined that spending more on health care and these plans would be a benefit. The company viewed its employees as an investment, "noting that firms with less overhead often had higher total health care costs". Therefore, Pitney Bowes believed if they spent the money on health care, they would save in the long run as employees would seek treatment at a lower cost to them, and then in the end come to work as they are healthier individuals.
b) How did the company's health and wellness programs add value?
When Pitney Bowes added health and wellness programs it added value to the company and to the employees. In 2003, Pitney Bowes had 10% less cost in health costs versus other benchmark firms. In 2005 it was 11% less. In 2006 and 2007 it was 3% less cost in health ...
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