Preventive Medicine Rides the Rails on the Far-flung Union Pacific

At a glance: Union Pacific Railroad
Omaha, Neb.
Number of employees: 35,000 in 23 states
Health insurance options: PPOs, HMOs and employee-owned “hospital associations”
Distinctive program: Railroad cars specially outfitted with exercise equipment so track crews can keep fit as they travel

In cutting health care costs and keeping employees well, managers at the Omaha-based Union Pacific Railroad faced special challenges shaped by their industry’s unique history and the vast geography of the West.

The company’s unionized employees, whose health benefits are negotiated on an industrywide basis, have a health care option that most U.S. workers don’t have: They can turn to Union Pacific’s own “hospital associations,” employee-owned health care delivery organizations formed in the 1940s.

“Our hospital associations are very similar to HMOs,” says Dennis Richling, M.D., the UP’s medical director and assistant vice president of health services. “In fact, when the government started talking about cost-cutting measures and the role HMOs would play, officials talked to these hospital associations to learn from their experience.”

Individual union locals elect coverage either through the hospital associations or through the company’s national insurance contract, which also insures dependents. That contract is administered by MetraHealth, which inherited it from Travelers Insurance, and uses MetraHealth’s network of providers in some states and those of Aetna Health Plans in others.

Management employees, on the other hand, have different health care options: a MetraHealth preferred-provider organization that was previously with MetLife, or one of about 20 HMOs with which the UP has ties.

Though UP hospital associations resemble HMOs, says Richling, “they haven’t been as focused on prevention.” Moving into this breach, in the late 1980s the railroad began a three-part plan to promote wellness and curb rising costs.

Part one was to make fitness centers with exercise equipment available to employees. Company-owned centers were constructed at the Omaha headquarters and in two other locations, and arrangements were made with hotels and commercial fitness centers to give traveling train crews and maintenance workers access to similar equipment in 110 other locations.

That still didn’t reach everyone. “The people who build and maintain our track were looking for an exercise option, and they lived in bunk cars,” Richling explains. So UP headquarters outfitted two rail cars with exercise equipment that would travel with work gangs. The cars were so popular that local managers in the company’s various units found financing to outfit 15 more rail cars, some of them with contributed labor.

“Between 85 and 95 percent of our population has one of these fitness centers within a reasonable driving distance of their home,” says Richling, and 49 percent have obtained the medical OK necessary to participate.

“The use of fitness cars and facilities is a long-term strategy that in itself probably does not produce much cost reduction,” he adds. “But it’s the foundation for our other programs.”

Parts two and three of the UP initiative were a book and video designed to help employees use health care resources more cost-effectively (reducing emergency-room visits, for example) and a risk-reduction program aimed at those with high health risks. Cost-benefit analyses concluded that the book and video returned $2.70 in value for every dollar expended, while the risk-reduction program brought back $1.57.

There’s nothing railroad-specific about the latter efforts, of course, but there’s a tip of the cap to the UP’s mission in the risk-reduction program’s name: “Project HealthTrack.”

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