Last week, I had the chance to tour the UPM Madison paper mill as part of the Maine Development Foundation's Policy Leaders Academy (PLA) bus tour of central Maine. (See Wendy's blog from 1/15 for more on the PLA.)
The mill is located in Madison, just northeast of Skowhegan, right in the center of town along the Kennebec River. Our group of 70 legislators and guests shuffled off the buses and into the historic mill where we heard from UPM Madison's CEO, Russ Dreschel. Russ gave us a brief history of the mill, including its purchase a couple of years back by a Helsinki, Finland based company, UPM.
The international nature of UPM's business brought up a lot of questions from the group about global competitiveness, including the impact of the U.S. health care system on the ability of U.S.-based operations to stay competitive. Russ explained that it costs up to 40% more for him to employ a worker in the U.S. than it would in Germany, most of which is due to the cost of providing health insurance. Germany has a national health care system so private companies don't need to shoulder the cost of providing health insurance.
There are certainly other factors to consider in that percentage difference, but 40% is a stark figure.
The good news is that UPM Madison is taking steps to lower its health insurance costs. Michael Michaud, Madison's Director of Human Resources (not to be confused with Maine's Second District congressman) told me Madison is self-insured, as many large employers in Maine are, which saves the company several cents on the dollar. When a company self-insures it has a much better view of how the health of the employees affects the health of the bottom line - in Madison's case, the cost of making paper. They can see the immediate value of providing wellness programs for their employees, keeping them healthy and productive at work.
Michael also told me the company offered robust tobacco cessation programs for over a year to prepare for becoming a fully tobacco-free workplace. He estimates the tobacco use rate went from 50% down to 20%, and perhaps as a consequence, his employees suffer very few cardiovascular disease related issues. According to the American Heart Association, treating cardiovascular disease is incredibly costly, representing more than 17% of U.S. health care spending.
While health insurance continues to be a 40% burden on U.S. companies relative to some international counterparts, many companies are getting it right. They know the cost benefits of keeping their employees healthy with preventive care and wellness programs versus waiting until they're sick, paying a great deal more, and losing several hours of productivity. For the folks at UPM Madison, they know that an ounce of prevention really is worth a pound of paper.
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