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For Karin Peterson, it just makes good sense to drive down costs by increasing efficiencies in the health-care system while making wellness resources more accessible to employees.

As vice president of human resources for Pella Corp., Peterson has battled rising health-care costs on behalf of her employer and its 8,000 workers across the country, and she has had some success recently in slowing the rate of increase in costs for the self-insured company.

“We design our plans based on what we see in our data,” she said. “For instance, we’ve put more coverage in for medications associated with certain chronic illnesses. So I may need to put more money in one area over another.”

At the same time, the company has instituted a culture of wellness, with incentives for health screenings, on-site Weight Watchers meetings and other company-sponsored programs. One of her concerns is that federal health-care reform may limit her company’s flexibility to shift resources as needed or to provide wellness incentives.

Peterson was among 19 Iowans who participated in the Iowa Committee for Value in Healthcare, which devised a set of principles it recently sent to members of Congress and the Obama administration to consider as they address health-care reform. The committee included a number of key health-care stakeholders, among them representatives from the Iowa Medical Society, AARP, Wellmark Blue Cross and Blue Shield, the Iowa Business Council and a variety of physicians in private practice and public health organizations across the state.

The committee was formed earlier this year by The Concord Coalition, a nonpartisan group advocating fiscal responsibility, in partnership with the University of Iowa College of Public Health and the Iowa Healthcare Collaborative. The committee is part of the coalition’s Fiscal Stewardship Project, which encourages regional fiscal advisory councils across the country to formulate policy prescriptions for addressing the nation’s long-term fiscal imbalance.

“I think what we’re really trying to demonstrate is that the Iowa model can be used as a place to develop national reform,” said Chris Atchison, associate dean for public health practice at the University of Iowa College of Public Health and one of the committee’s co-chairs. In many instances, Iowa has been shown to have provided superior value in health care by attaining better outcomes for patients at lower costs than much of the rest of the country, he said.

Among the recipients of the report is Sen. Chuck Grassley, ranking member of the Senate Finance Committee, which will play a key role in determining whether bipartisan legislation will move forward.

“I appreciate the Iowa Committee For Value in Healthcare’s efforts in this area,” Grassley said in a prepared statement. “I share their principles of high value and high quality care. The committee is helping bring national attention to what many of us in Iowa already know – that Iowa is one of the most efficient and high quality states in the country for health care. I look forward to digging into the details and learning more about their report.”

One of the committee’s primary recommendations is that any effort to change the health-care system must be explicitly linked with value, rather than simply considering cost.

“What I particularly like about this approach is to move it away from simply costs and payments to what the health system actually needs to do,” said Atchison, who previously served as the state’s director of public health under Gov. Terry Branstad. “It really gives the providers, the consumers and even the payers some meat to discuss. It’s not just about the money; it’s about the value.”

Another committee member, Joe LeValley, senior vice president for planning and advocacy at Mercy Medical Center – Des Moines, said Mercy and other Iowa hospitals have initiated programs that are significantly lowering costs. For instance, Mercy has instituted a program in which nurse case managers telephone patients with congestive heart failure daily.

“By changing the way we interact with those patients and supporting them at home, we’ve reduced readmissions of those patients by 85 percent,” LeValley said. “We’re not talking about incremental changes to save small amounts of money. When you change your approaches, you can have enormous amounts of savings.”

Wellness and disease-prevention initiatives are other ways to reduce costs that are working, LeValley said. “We’ve seen internally how we can lower Mercy’s health costs by encouraging healthy lifestyles in our organization,” he said. “The power of that investment (in wellness) can’t be over-emphasized.”

Several years ago, Mercy received a grant from the Wellmark Foundation that enabled it to hire health coaches at its clinics to work with patients to provide advice that doctors don’t have the time to offer. “We can show you in the data how we’ve made a difference in people’s health status by doing this,” LeValley said. “But if we’re going to accomplish reform, we need to be able to do the same thing on a national level.”

These types of value approaches to health care are considerably more desirable than the “slash-and-burn” approach to Medicare reimbursements that some lawmakers have recommended to pay for reform, LeValley said.

“We’re encouraging the government to pursue (those cost-saving measures) rather than across-the-board payment cuts,” he said. “If we succeed in reducing readmissions, it will lower our revenues, but it will also lower our costs, and so everybody wins. If all they do is cut our payment rates but they don’t change the system to reduce the utilization and costs of care, then Iowa’s very fragile health system is in very serious trouble.”

Overall, extending health coverage to as many people as possible remains the top health-reform priority, LeValley said.

“The number of uninsured is not acceptable, and as a nation we have to figure out how to get more people covered.

“From a patient perspective, if you feel you don’t have access to the system, you’re likely to put off preventive care, and tragically, people put off things that really need care, and by the time they come to us, their condition is far worse than if we could have taken care of it sooner.”

At Pella Corp., Peterson said, four years of work toward implementing wellness programs and redirecting money to where it’s most needed in the company’s health plan have begun to pay off.

“It took us three years to start seeing an impact on our health costs,” she said. “And we now cover physicals. It’s that kind of shift in coverage that is making a difference. This year we’re seeing a nice trend in reduced costs. We were in double-digit increases in 2005 and 2006; now we’re in single-digit increases in 2007 and 2008. It’s too early to tell for 2009, but (it’s) very favorable to what I budgeted last year.”

The momentum in health-care reform must be flexible, Peterson said.

“I think the other message from businesses is: Let’s not move too quickly,” she said. “And any mechanism that’s put in place, let’s have an ability to reverse it if it’s not working.”