15-39 Segment 1: The Return of Workplace Wellness

 

Synopsis: Most medium and large businesses now have corporate wellness programs for employees in an effort to keep health insurance costs down. Many have incentives for reaching health goals. Experts discuss how these plans work and whether the effort shows up favorably on the bottom line.

Host: Reed Pence. Guests: Dr. Katherine Baicker, Professor of Health Economics, Harvard School of Public Health; Larry Chapman, President and CEO, Chapman Institute; Al Lewis, co-author, Cracking Health Costs: How to Cut Your Company’s Health Costs and Provide Employees Better Care

Links for more information:

The Return of Workplace Wellness

Reed Pence: For most companies, health insurance for employees is one of the biggest costs on the balance sheet. So, for the last couple of decades, employers have tried just about everything to drive that cost down. They’ve imposed HMO’s on workers, passed along more of the premiums, and raised deductibles and co-pays. Still, the costs have gone up. That’s why more than 80% of medium and large businesses are now trying to keep their employees from getting sick by instituting wellness programs.

Katherine Baker: Different employers take very different approaches to wellness programs. It’s a term that’s applied to a pretty wide variety of interventions, including things like promoting healthy behavior like exercise, reducing unhealthy behavior like smoking, to disease management —  helping people with high blood pressure keep their blood pressure under control, or helping people with diabetes keep their blood sugar under control.

Pence: That’s Dr. Katherine Baker, Professor of Health Economics at the Harvard School of Public Health. She says wellness programs often provide nutrition and smoking cessation classes, or help workers find a walking buddy at lunchtime for weight loss. Those are the basics. But these days, companies do a lot more than simply make those programs available and hope employees sign up.

Larry Chapman: Usually wellness programs appeal to somewhere between 10-25% of the employees in any particular business. Those people will already be active and actively doing some things for their own wellness. Incentives tend to help us reach that other 75 – 90% that aren’t engaged in wellness at the beginning of a program.

Pence: That’s Larry Chapman, President and CEO of the Chapman Institute, a major provider of worksite wellness program certification.

Chapman: One of the best incentives is the ability to reduce the individual’s premium contribution for their health plan for specific involvement in a wellness program. Typically, that includes completing a health risk assessment. It may include taking a preventive screening set of activities. It may include registering on an e-health portal and perhaps taking a ten-week program and proving your nutrition. Those are where the flexibility often times comes in wellness programs. You can, in fact, choose different interventions and connect them with the benefits that are offered to employees.

Pence: A study by Aon Hewitt shows that more than half of companies with wellness plans require workers to participate. More than 80% offer incentives for participation, and about a quarter of them offer rewards for changing behavior.

Baker: I think there is intriguing evidence that it takes both incentives and other aspects of programs to get employees fully engaged and to achieve the outcomes that the insurer and health care providers and the employers are trying to achieve. Incentives can take the form of penalties for not demonstrating healthy behaviors or bonuses for demonstrating healthy behaviors. We’ve seen examples of both in recent years in different employers. Non-incentives or non-financial incentives can focus on behavioral economics or psychological nudges to try to promote healthful behavior in a way that is a little bit lighter touch to use a term of art. Meaning, you can implement some social supports for participating in the wellness program. You can frame the choices that people face in a way that makes it easier for them to choose the better health management options.  

Pence: Rewards are a powerful way to get employees to pay attention to their health… But if companies are offering carrots, they often also brandish a stick. According to the Aon-Hewitt study, nearly 60% of wellness programs plan to impose penalties on those who don’t participate, or don’t take action to improve their health. Chapman is not a big fan of imposing penalties.

Chapman: The problem comes with the fact that wellness is essentially a voluntary activity. It means people have to want to follow through and want to do it. So, if I am using disincentives or sticks, what frequently happens is it irritates people. People get resentful that their employer has set up something that they’re going to lose, they’re going to have to avoid or want to avoid. I tend to focus incentives on the types of carrots that people like and they want to get. For instance, if you have a premium contribution for your health plan and it’s $50 a month, it’s nice if you can say to people, ‘We’ll reduce that by half, or we’ll reduce it by 100% down to zero if you are active in the wellness program.’

Pence: However, to some other experts, most aspects of wellness programs leave a bad taste.

Al Lewis: Most of them are things that employers do to their employees to try to force them to become healthier. There are two problems with that: one is you really can’t force people to become healthier; and the second, which is a bigger problem, is that much, if not most, of what they want people to do actually is bad for them.

Pence:  Al Lewis is co-author of the book, cracking health costs: how to cut your company’s health costs and provide employees better care.

Lewis: They’re making you fill out forms and making you line up to get tested, to get poked with needles, and over screened and over-diagnosed. If your employer’s doing that and there is probably some forfeiture of money involved if you don’t go along with the plan, that’s a stupid idea… period. If, however, your employer is putting in fitness facilities, if they’re encouraging healthy eating, if they’re making it easier for you to ride your bicycle to work, if they’re giving you a stretch break, if they’re putting out bowls of fruit instead of bowls of candy… well, you know, more power to those employers.  

Pence:  Lewis says wellness programs are too often punitive, and screening may lead to false positives and unnecessary treatment. What’s more, he says programs are invasive almost by definition, starting with the health assessment employees are asked to complete. He says employers often want to know about a worker’s lifestyle habits like alcohol use that are none of their business, or require people to take a whole battery of medical tests. Baker says those tests are necessary.  

Baker: There’s a truism that you can’t change what you don’t measure. It’s very hard to know what’s working and what isn’t working if you are not, at the very least, measuring the outcomes that you are trying to change. I think that a lot of the efforts to find people with high blood pressure, to find diabetic patients whose blood sugar isn’t under control, to identify smokers, you can’t target interventions if you don’t know who those people are. You don’t know if the interventions are working if you don’t continue to measure progress along the way. I suspect that measurement is necessary, but not sufficient to help achieve those outcomes. Now there are all sorts of issues that come along with measurement, particularly when these programs are being implemented in an employer environment. People may be very nervous about their employers having access to potentially sensitive health information. There are a lot of issues of privacy that need to be addressed.

Pence:  Chapman says most companies address those issues by having someone else do the tests, handle the information, and administer the program.  

Chapman: What usually happens is you have a third party. It can be a health plan, it can be an athletic club, it can be a set of wellness professionals that are offering services in a community. Those are the people that essentially know the individual data.

Pence:  But Lewis says even then he’d never advise answering invasive questions honestly. A third party administrator might have its computers hacked, and personal health information could be broadcast everywhere. These days, many employees are worried about that. But Chapman says even more important to most workers is making sure their employer doesn’t know what’s in their file.  

Chapman: We don’t want people to feel like they’re going to be damaged or injured by any information that comes out of a wellness program. If you allow that to happen as an employer you can kiss the program goodbye. Secondly, you want people to see wellness as a benefit. You want them to see it not as the wellness police watching over me, but you want them to see it as something that a company does for it’s employees that is really designed to help improve the health of that individual, that family, those individuals that are under a health benefit program.  

Pence:  Chapman says the key to a wellness program’s effectiveness is its participation rate. If workers don’t get involved, the entire program may be a waste. That’s why companies are cranking up incentives, and penalties, to make sure employees are in. But Lewis says even those don’t make a difference. If a company is looking to save money, he doesn’t think a wellness program is the way to do it.

Lewis: You would actually be shocked at how little the impact of good health is on an employer’s costs. People think, ‘Oh, we can avoid heart attacks,’ and that kind of thing. Well, almost nobody gets a heart attack in the working age population anymore. There’s not really much to be saved. That’s thing number one. Thing number two is, employers can make and help employees become healthier if they want to [become healthier]. They can have things like fitness centers and subsidized healthier food in the cafeteria. When they have meetings at lunch they can have healthy foods there, etc. It’s not going to reduce your health care costs, but your healthier employees will appreciate that. That to me is what wellness is all about; it’s about doing things for your employees, not lining them up and poking them with needles, which clearly falls under the category of doing things to your employees.

Pence:  Lewis cites a recent RAND study finding that it takes five years for the average wellness program to return anything. And even then, returns are minimal. However, Chapman’s review of 56 other studies comes up with a different conclusion.

Chapman: The literature is pretty clear that your traditional smorgasbord style, use at will, not strongly incented or complex or comprehensive wellness programs will generally produce about a three to one cost benefit return, which means $3 of saving to each dollar of cost for a wellness program. The majority of the time about 70% of that economic return of three to one will occur in health plan cost savings.

Pence:  That leaves another 30% of savings attributable to factors such as reduced sick leave, absenteeism and presenteeism. But Lewis is skeptical.

Lewis: Look at the reasons that people miss work. The last time you missed work you were probably either acutely ill, or you had a death in the family, or maybe one of your kids was ill. You never hear anybody saying, ‘Oh, my diabetes flared up today, so I have to miss work.’

Pence:  However, over at Harvard, Baker’s review of about 100 studies finds that absenteeism savings are substantial as a result of wellness plans, along with a big return in healthcare costs.

Baker: For every dollar spent on a wellness program, medical costs went down by about $3.27. Absenteeism costs went down by about $2.73. That’s a really big return for each dollar spent on wellness. But, I would issue a note of caution in taking those numbers and saying, if my company implemented a program, we should get the same return. The companies that chose to implement these programs might be the ones the return was likely to be greatest. It’s hard to know whether another company implementing it could see the same return on investment. It’s also not entirely clear which aspects of the program work the best, or whether there were any other factors at play that might have generated that improvement in medical costs and reduction in absenteeism.

Pence: What’s more, Baker says the savings showed up within the first couple of years, sometimes within the very first year. But again, she says other companies just getting into the wellness game may not similarly benefit, especially if they don’t dive in with a complete commitment. So, many companies are increasing the scope of their plans, asking more questions and including spouses, who are often insured along with an employee. The biggest hurdle may be getting their workers to buy into wellness readily, rather than making them feel like they have no choice. You can find out more about all of our guests on our website… Radiohealthjournal.net. I’m Reed Pence.

 

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