By Michael Terry
President and CEO
Delivering public transportation in American cities requires managerial tenacity and dedication to providing vital service as part of our nation’s infrastructure. Many systems across the country struggle to keep vital transit services on the street due to pressures of the economy on the industry. Costs for fuel and employee benefits have skyrocketed in recent years and, to add insult to injury, revenue streams of local transit systems have become unstable. In Indianapolis, the operation of our IndyGo system is funded largely by local property taxes, which were recently capped at 1 percent by an amendment to the Indiana Constitution. IndyGo has been faced with serious challenges to keep its service intact, including dealing with higher operating costs, unstable budgets and increased ridership. Cost containment, creating operational efficiencies and leveraging partnerships have become key strategies that IndyGo has pursued to help keep local bus service on the street. These strategies improve the perception of the agency in the community and increase the quality of services offered to riders and employees.
IndyGo Case Study: Employee benefits cost containment
In 2009, IndyGo’s health insurance benefits for employees reached a critical mass. The agency saw loss ratios tip the scales at 105 percent. 70 percent of the company’s workforce had no primary care provider. Medical and prescription claims rose by $500,000 in one year. The bid process for procuring coverage yielded only one bid from the incumbent provider, which included a 49 percent premium hike that would have resulted in and additional $2.3 million in expense for the corporation. Absenteeism was high and our employees were struggling to manage chronic health conditions like high blood pressure and diabetes. We needed to intervene and invest in the health of our employees.
Through negotiation with the incumbent health insurance provider, IndyGo proposed the introduction of a new comprehensive employee wellness program. Tenants of the new wellness program included quarterly measurements to gauge employee participation (blood draw, health assessment, health coaching and participation in one healthy activity), a discounted premium for participating employees (with the difference to be paid by IndyGo) and the launch of a free on-site health clinic, which would operate as an urgent care and occupational health center. IndyGo was able to mitigate the premium increase to 26 percent instead of 49 percent as the provider submitted the bid.
In that first year, an overwhelming majority of employees participated in the wellness program, taking steps to reduce their premiums and health risks. The clinic saw two employees who may have otherwise suffered a fatal heart attack and kidney failure, respectively.
At the end of the wellness program’s inaugural year, IndyGo management had seen significant improvements including an 11 percent drop in loss ratios and a premium renewal rate with only a 4.5 percent increase. Payoffs for investing in employee wellness were coming fast and furiously.
As the wellness program gained momentum at IndyGo, we experienced a palpable difference in the culture of our workplace. By offering healthy activities at work, including Weight Watchers meetings, company-sponsored teams for run/walk events and on-site Zumba and yoga classes, we’ve seen our employees becoming healthier and happier. IndyGo continues to evaluate its wellness offerings and respond to the unique needs of our employees. In 2012 IndyGo revamped the care model for our on-site clinic, departing from a model of acute care and occupational treatment to a full-service primary care model.
At our new clinic, employees can visit our dedicated full-time physician, a nurse practitioner and even have their prescriptions filled. Participation in the wellness program is integrated into the administration of the clinic—employees that wish to participate must now visit the clinic to have a yearly health assessment.
Nearly three years after the launch of the employee wellness program and on-site clinic, IndyGo received bids from five different providers for its 2012 health insurance coverage and secured a premium 2.2 percent lower than the previous year. Loss ratios are continuing to fall and the 2011-2012 fiscal year reached a 10-year low of 73 percent.
The strategy to make a significant investment in employee wellness has shown impressive results. By 2013, nearly 90 percent of employees participate in the program and 15 percent of employees use the on-site clinic for their primary care. Due to the work we have done, and the work employees have done, our 2013 insurance premium dropped 12.5 percent and the wellness program and clinic have saved the company more than $2 million in health insurance premiums over the past three years. Injecting this robust wellness strategy into our operation is yielding priceless dividends in better employee health.
IndyGo Case Study: PUPstops – Community partnership for transit amenities
In mid-2011, local land developers began to redevelop the site of the historic Bush Stadium ballpark, former home of the Indianapolis Indians, to make way for a new technology district. A local non-profit group, People for Urban Progress (PUP), negotiated rights to salvage the stadium seating that would have otherwise gone to landfills. In partnership with Ecolaborative, Indianapolis Fabrications and Recycle Force, PUP has facilitated the refurbishment of the stadium seats. A strategic relationship between IndyGo and PUP is bringing the rehabbed stand-alone benches to bus stops around Indianapolis.
In late 2011, the sustainably-made pilot PUPstop was installed in downtown Indianapolis where a public art mural of Kurt Vonnegut is the backdrop. Additional PUPstops have been placed at various locations around town and more are planned for high-pedestrian areas and new developments like 16Tech, the historic Bush Stadium site.
To place more PUPstops around the city, IndyGo is promoting the program to local businesses, community groups and individuals. Through a cost-sharing model with IndyGo, program participants endow their very own PUPstop with a unique local flare. Leveraging support for transit in this way has expanded IndyGo’s capacity to place these one-of-a-kind transit amenities throughout Indianapolis.