The seven percent solution.

• Author: Shackelford, Susan
• Position: Nucor Corp.'s workers pay maximum of 7% of annual pay for health-care costs - Focus on Health Care

For most of the 2.75 million North Carolinians covered by company medical plans, insurance picks up 80% of the doctor's bill - once a deductible is met.

But for 5,500 Nucor Corp. employees just 20 in North Carolina, in the company's Charlotte headquarters - getting sick now means more than physical pain. For some, it can mean a shock to the pocketbook: The steel maker's workers pay 50% of their total health-care costs, up to a maximum of 7% of their annual pay.

In the 80s, company-sponsored health-plan costs climbed sharply. In 1984, U.S. employers paid $1,645 per employee annually, according to New York insurance consultant A. Foster Higgins. In 1990, the figure reached $3,217. Some employers have gone with health-maintenance organizations, in effect dangling a carrot before their workers, hoping to lure them to better health - and lower costs - by encouraging them to see a doctor before they develop serious illnesses.

Nucor, it seems, is spuming the carrot in favor of the stick. And its approach has grabbed the attention of insurance executives and company managers.

This is a great leap forward when you start involving the employee in 50% of his cost," says Dan Butler, senior vice president for health affairs at Blue Cross and Blue Shield of North Carolina, a non-profit health-insurance company.

Is Nucor's move to keep its bottom Une healthy a sign of things to come in employee benefits? After an, the company is famous for its innovative ways - and for its reluctance to part with pennies needlessly - in its steel production. And it has stood behind ideas others deemed unworkable.

For instance, when the company wanted to build a mill in Crawfordsville, Ind., big steel makers said it would never work. Bethlehem Steel Corp. compiled an inch-thick report concluding the plant couldn't possibly produce steel for less.

But Nucor made it work, eventually turning out a thin slab of steel that took less energy and labor to produce than other methods. Along the way, the company experienced fatal accidents, machinery failures, nervous inquiries from Wall Street and a six-point drop in its stock price during one week in September 1989.

A company with Nucor's steely determination to work its will in manufacturing isn't likely to be deterred in its search for a streamlined group health plan.

While many large North Carolina employers are curbing costs by reining in workers' physicians with managed-care programs, Nucor is targeting the employee, trying to eliminate overuse of medical care.

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