Some Employers Are Offering Free Drugs

Correction Appended

For years, employers have been pushing their workers to pay more for health care, raising premiums and out-of-pocket medical expenses in an effort to save money for the company and force workers to seek only the most necessary care.

Now some employers are reversing course, convinced that their pennywise approach does not always reduce long-term costs. In the most radical of various moves, a number of employers are now giving away drugs to help workers manage chronic conditions like diabetes, high blood pressure, asthma and depression.

Major employers like Marriott International, Pitney Bowes, the carpet maker Mohawk Industries and Maine's state government have introduced free drug programs to avoid paying for more expensive treatments down the road.

Companies now recognize that "if you get people's obesity down, cholesterol down, asthma down, you save a lot of money," said Uwe E. Reinhardt, a health economist at Princeton University.

Despite the Bush administration's efforts to promote "consumer directed" health care, many companies are recognizing the limits to shifting too much of the cost of medical care to employees. Experience, Professor Reinhardt said, is contradicting the theory that "patients will be more prudent shoppers for health care if they ache financially when they ache physically."

Another motive for the business world could be to stave off a greater government involvement in health insurance, now that most presidential candidates and other politicians are promoting health care reform.

Big drug makers like Pfizer and Merck, which could benefit politically and financially from the employer drug programs, are also supporting the effort.

Richard T. Clark, the chief executive of Merck, made the political connection in a recent trade journal article. "If we all don't do a better job, the private employer-based market will continue to weaken and the country will move forward toward rationing of care and greater government control, with greater pressure for a single-payer model with price controls," Mr. Clark wrote in the American Journal of Managed Care.

One clear motive is to help workers stay well, averting expensive emergency room care and hospital stays. As health coverage has grown more costly, many people have been skimping on care, and millions of Americans are going without health insurance altogether.

Employers are reacting to a disturbing trend. As most employer-sponsored health plans have raised co-payments sharply for drugs in recent years, employer drug spending has slowed. But total health care spending by employers has nonetheless continued to rise: 7.7 percent last year, or more than double the general inflation rate, according to the Kaiser Family Foundation. The free drug programs are being adopted in hopes of countering the rising costs, taking their place alongside other steps by some employers that have included opening or expanding health clinics in their factories and offices, and offering checkups and medicines at no cost or for a modest co-payment.

Given the millions of Americans who suffer from heart disease, depression, asthma or diabetes - about one in four working-age adults - the movement toward free drugs and preventive care has the potential to help many people, said Craig Dolezal, a health care specialist at Hewitt Associates, a consulting firm.

Co-payments of to a prescription have become typical, while the co-pay for some expensive drugs can be or more for a month's supply. The new employer programs are waiving those fees.

For people with serious health problems, free medicine is an incentive not only to stay with their prescribed regimens, but also to keep in touch with nurses and pharmacists who monitor changes in their weight, blood pressure and other vital signs.

At the Mohawk Industries carpet factory in Dublin, Ga., about 200 of the 750 employees signed up for free blood pressure and heart drugs last summer after the company held meetings to describe the benefits of lowering blood pressure and cholesterol.

Alan Christianson, Mohawk's benefits administrator, said that the company recognized a few years ago that it could eventually face health costs so high that employees could not afford insurance. "We felt we had to do something about it," he said.

Peggy Cauley, 36, who supervises a customer service unit at Mohawk's factory, said she was 30 pounds overweight and had spent a month on blood pressure and heart drugs before she started the program.

Now the drugs are free, and Charles Posey, an independent pharmacist stationed at the plant, monitors her blood pressure and gives advice on "how to maintain my weight," Ms. Cauley said. She has lost 20 pounds, she said, but is "still 10 pounds over my goal."

Eastman Chemical, which is based in Kingsport, Tenn., and has offered free mammograms for its workers and free vaccines for employees' children, now also provides free drugs and supplies for diabetics under its health plan.

The company is trying "to drive value and to target where care is most needed," said David H. Sensibaugh, the director of integrated health.

Correction: February 22, 2007

Because of an editing error, a front-page article in some copies yesterday about employer efforts to provide free drugs to workers with chronic medical conditions misidentified the state in which one of the employers, Polk County, is located. It is in Florida, not Georgia.