February 27, 2012

How PepsiCo is Controlling Healthcare Costs through Hospital Deal

newsPepsiCo, a major distributor of snack foods, beverages, and other branded products, has entered into a partnership with Baltimore-based Johns Hopkins Hospital which sends Pepsi employees and their families to the hospital for certain surgeries; namely cardiac and joint. Pepsi is rolling out a plan to pay its quarter-million domestic employees to travel to Baltimore while also covering the bill for all deductibles and coinsurance fees for qualified procedures at the hospital.

Johns Hopkins is one of the highest-rated hospitals in the country for cardiac care and surgeries on the joints. In an effort to reduce future complications that could take employees back out of the workforce for extended periods, Pepsi is working to improve the care its employees receive and get its employees back to work more quickly. This initial investment is expected to reduce long-term costs and increase overall productivity.

The hospital stands to gain both increased recognition and guaranteed business. The primary concern for employees participating in the benefit program is the traveling. Due to trepidation over the process of being transported across country, only 25 to 30 percent of qualified employees have participated so far. The obvious step to address this issue is to partner with hospitals in closer proximity to its offices and plants.

Though this health model is currently rare, this experiment may lead to other company’s considering it as they attempt to simplify and control healthcare expenditures. Said Bruce Monte, senior director of PepsiCo Health and Welfare Benefits, “The folks at Hopkins can focus on the best medical care for our employees and their families without worrying about if a meter is running, or about the financial impact of the care they are providing.”

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Rachel, writer for Recruiter.com, has graduate level work in literature and currently works in university administration.