What’s your company’s return on investment for its employee wellness efforts?
For many executives, and for small business owners
in particular, that can be a tough question to answer, if
it’s being addressed at all.
Big organizations such as Meredith Corp. can make wellness programs look easy. More than 95 percent of Meredith employees participate in voluntary health screenings, and the company has documented tens of millions of dollars in savings through its initiatives. However, Meredith hired its first full-time wellness director just six years ago as it was taking its first baby steps toward the comprehensive programs it now offers its employees.
As part of a general focus to improve overall wellness, business leaders are trying to make their workplaces healthier, in part because more and more data show that each dollar invested in wellness programs pay back $3 to $4 to the company through increased productivity and lower health care costs.
Unfortunately, the data also show that poor health choices have made chronic diseases more prevalent in the workplace. The number of working-age Americans with a chronic condition such as heart disease or diabetes has grown by 25 percent in the past 10 years. Individuals with chronic health conditions are four times more likely to miss work due to illness than their healthy co-workers,
a study by PricewaterhouseCoopers found.
With the full implementation of the federal Patient Protection and Affordable Care Act next year, small employers can wield sizable premium incentives to encourage their staffs to participate in health screenings and wellness programs to improve their health. Additionally, some larger companies are taking their wellness programs to a new level through programs offered by insurers such as Wellmark Blue Cross and Blue Shield and insurance brokerages like Holmes Murphy
and Associates Inc. Here’s a look at the latest trends on
the path to wellness in Iowa.
Improving employees’ emotional health
Bill Leaver has a question for employees and owners of small businesses across the state: What are you doing to make your company a better work environment?
Leaver, CEO of West Des Moines-based UnityPoint Health, can answer that question for his health system, which employs about 24,000 people, but as the head of the Workplace Wellness Task Force of Iowa’s Healthiest State Initiative, he and other business leaders also are concerned about smaller businesses, which employ the majority of the state’s work force.
The task force is taking a broad approach to employee wellness, using the following statement as a measuring stick: “My boss or supervisor views me as a partner, not an employee.”
By early June, the task force will recommend to the Healthiest State Initiative board a plan for a variety of courses to improve the work environment. The standardized courses will be offered by Iowa community colleges and promoted to businesses by local chambers of commerce, Leaver said.
The courses will be “quick-hitting seminars that would be convenient and affordable” and no longer than a full-day session, he said.
“Our belief is the healthier your workplace is, the more business
you’re going to create,” Leaver said. “So it should be a win-win for both employer as well as employee.”
Iowa organizations shouldn’t need to be persuaded to value wellness programs.
“There is strong agreement that wellness programs reduce health care costs, and that the programs increase productivity, reduce absenteeism and increase the quality of life for employees,” a Capital Crossroads wellness and community study found earlier this year.
Of course, it never hurts to offer incentives to encourage employees to participate. Cash or gift cards were the most frequently cited incentives offered by both large and small organizations, the study found. However, large groups were twice as likely as small groups to offer health insurance premium discounts as incentives. Among companies with at least one wellness program, the median per-employee cost for the most popular program was $200.
Wellmark Blue Cross and Blue Shield has operated a health management consulting service for its member companies for the past five years.
“The groups we’re working with are, for the most part, building the incentives themselves,” said Jason Bobst, Wellmark’s director of health management consulting. His team of seven consultants works with employer groups throughout Iowa and South Dakota to plan and implement wellness programs for their organizations. “We
find out the metrics that make the most sense (to track), and then find out what kind of incentive they might have to wrap around it to get the best participation,” he said.
Incentives such as cash or premium discounts can be effective for some organizations, depending on their particular cultures, Bobst said. “I think what you’re going to find in the market is they’re using cash or points that are converted into prizes or premium reductions,” he said.
Although it might be assumed that employers would track the outcomes of their wellness programs, the Capital Crossroads survey found that more than 40 percent of organizations that offer wellness benefits do not track employee health status.
About four out of five larger companies do track employee health, however, and are considerably more likely to use costly methods such as tracking software and employee surveys to monitor results. Large organizations are also more than twice as likely to rely on self-reporting by employees as a no-cost way to track results, though.
Currently, Wellmark is working with about 25 employer groups on wellness programs, Bobst said. Its fully insured groups pay no extra for these services; self-insured companies pay a fee based on the services offered and number of employees. Additionally, a new partnership that begins this fall with WebMD.com will enable the insurer to potentially reach many more companies.
“One of the reasons we’re partnering with WebMD is that we’re anticipating (that demand for wellness screenings) is going to grow significantly in the next couple of years,” Bobst said. The Web portal, scheduled to be launched Sept. 1, will enable Wellmark to assist companies in setting up health screening and wellness events with interactive features to enable employees to track how many points they’ve earned online.
Meredith’s progressive strategy
Meredith’s employee wellness program has earned several national awards in recent years, among them its designation in 2011 as a Platinum-Level Well Workplace by the Wellness Council of America.
The media company hired Tim O’Neil to manage the program in 2007, a year after it launched a pilot-scale voluntary health screening program. That initial program offered participating employees a $300 discount on their health premiums for the following year. To qualify for the discount, employees must earn at least 1,000 points during the year by participating in the screening as well as other applicable programs, including working with a health coach if they have three or more health risk factors.
“We really took a progressive strategy,” O’Neil said, noting that Meredith gradually increased the incentive amount, bumping it up again last year to $650. This year, the company added a $350 premium discount for spouses who participate in the program. “So if you combine that with the employee incentive, that’s a $1,000 incentive – that’s some real money,” he said.
The effect on Meredith’s health insurance claims costs has been clear, O’Neil said. In 2006 Meredith spent about $25 million on health insurance costs, an expense that was increasing at a 10 percent clip each year. Since implementing the wellness programs, Meredith’s annual growth in health care expenses has moderated to about 3 percent. On average, the dollar amount of annual health claims for those who participate in the screenings are 27 percent lower than non-participants’ claims. “It’s something that really saves the employees a lot of money,” he said.
Perhaps even more dramatic are the participation rates and resulting health improvements. More than 98 percent of Meredith employees and their spouses participated in the latest round of employee health screenings last fall, and 86 percent of employees are now in the low-risk health category, O’Neil said. The percentage of employees in the high-risk health category has declined from 9 percent to 3 percent since 2006, and tobacco usage has decreased from 11 percent of employees to 3 percent.
“We’ve seen some really nice health improvements, which really speaks to the effort of the employees,” he said.
Support and personal involvement by Meredith’s senior leadership has been a key factor in the program’s success, O’Neil said. Additionally, the company uses technology, such as online forums in which employees can form teams to compete, to keep the program fun and interesting. Meredith recently added a financial wellness component to the program, emphasizing the importance of maintaining control of personal finances to reduce stress and contribute to overall wellness.
More incentives available
Holmes Murphy has been on the front lines with both large and small employers to develop more effective wellness programs. The West Des Moines-based benefits broker has flattened growth in its own employees’ health premiums to near-zero yearly increases through an aggressive health screening program.
Steve Flood, senior vice president of employee benefits for Holmes Murphy, said the federal Affodable Care Act has provided smaller employers with more potential financial incentives for employees to participate in wellness plans. Under the health-care overhaul, the vast majority of small businesses that provide health plans are now required to provide 100 percent coverage for routine and preventive care in their plans, with no deductible payment required of the employee.
“Because of that, (small employers) have a tool now to go to their employees and say, ‘I’m providing this to you for free, so because of that, we are now going to have expectations of you.’” Flood said. “Not only routine physicals, but also all the age-appropriate screenings are now being built into these programs with expectations of employees to comply.”
Effective this year for companies with less than 50 employees, an employer health plan can charge an employee who does not participate in a health screening a premium that’s up to 20 percent higher than what a compliant employee pays. The allowed differential will increase to 30 percent in 2014. Alternatively, if an employee is a smoker, the premium charged can be up to 50 percent higher than what nonsmoking employees pay.
Employees’ compliance in getting recommended health screenings, however, has generally been very lax, Holmes Murphy has found. For instance, fewer than 30 percent of women get mammograms at the recommended times. If those compliance rates can be increased, more cancers and other diseases could be caught in earlier stages when they’re more treatable and less costly to treat, Flood said.
With that in mind, Holmes Murphy has designed checklists for employees to bring with them to their physician’s office to help ensure that recommended preventive screenings are performed when they’re due.
“The doctors like this because it’s not them saying this has to be done,” Flood said. “The employee brings this back and then we can charge the lower rate.”
An added bonus: “The cost of the screenings is already built into the premiums, and the results are dramatically better than the employees just doing screenings on a voluntary basis,” he said.
The U.S. Equal Employment Opportunity Commission is currently considering whether employee incentives based on wellness screenings could be violating anti-discrimination laws. Flood said he believes that outcomes-based wellness programs will likely be outlawed, but that compliance-based ones such as his company’s will continue to be allowed.
Big opportunity, big return
From Leaver’s perspective, the ability to identify the UnityPoint Health employees who are at the highest risk for developing a chronic disease has been one of the biggest benefits of his company’s wellness program in the past several years.
“That is really where we’re seeing the biggest opportunity and the biggest return,” he said. “Where you’re going to see the return in the short run is in your health care costs. In the last year, we have been very focused on, through our benefit design, encouraging people to get a health assessment or to help them understand why they’re seeking care - focusing on intervening earlier with people with chronic diseases.”
Though UnityPoint Healthy doesn’t disclose its own health insurance cost trends, “we are seeing a positive impact on our health care costs,” Leaver said. “Long-term, you would hope to see people saying (through employee opinion surveys) that ‘I feel better about myself and I am more positive about the work environment.’”
What is more difficult to measure, even for a health care organization, is whether intervening earlier to reverse chronic diseases is actually increasing productivity and reducing absenteeism, Leaver said. “We are trying to measure that, but I don’t know that we have that down,” he said.