I often spend my days in deep discussion with clients regarding the disease states that they believe are the catalyst to their medical and claims costs. The focus of their health and wellness programs are typically centered on containing the costs associated with conditions that drive the highest costs . It makes sense given that the top five conditions are usually chronic in nature (cancer, coronary heart disease, chronic pain, neck/back pain and high cholesterol).

A recent study by the Journal of Occupational and Environmental Medicine regarding the cost impact of presenteeism leads me to ponder whether employers should be focusing on less tangible measurements than medical and pharmaceutical claims costs. Based on this study, presenteeism appears have significantly more impact on healthcare costs than previously thought. Even more interesting is the fact that conditions that drive claims costs often are not the same conditions that lead to presenteeism and affect productivity losses. Some interesting findings in the study included:

- The five costliest conditions that drive employer costs, when productivity losses are factored into the equation, as a result of presenteeism are: depression, obesity, arthritis, back/neck pain, and anxiety.
- For every dollar spent on medical costs and pharmaceuticals, there is $2.30 of health-related productivity losses due to absenteeism and presenteeism.
- For certain conditions, such as anxiety, employers can lose $20 in productivity for every dollar they spend on medical costs and pharmaceuticals.

In the wake of the continuing workforce reductions, corporations are running extremely lean, requiring more productivity from employees. Uncertainty, stressful environments, less resources, and an increased focus on productivity may be perpetuating presenteeism conditions that aren’t being addressed in a health & productivity program because these conditions aren’t driving claims, conditions such as anxiety

When assessing the goals and objectives of a health & wellness program, these study outcomes should trigger discussion regarding where to place emphasis – on tangible costs or on more significant productivity costs? What are your thoughts?

In a recently published study by the Lewin Group , pre-diagnosed Diabetes costs are costing the US $18B a year in addition to the $174B in annual expenses and lost productivity.

It is not uncommon for an individual with Diabetes to have co-morbidities such as Heart disease and Obesity that also result in high annual medical claims and lost productivity. What is interesting to me is that some health and wellness programs are focusing soley on Obesity as the underlying driver of Diabetes and Heart Disease and therefore, focusing their prevention efforts soley around weight management. Employers and health plans are making substantial investments in engaging the consumer in the battling the bulge. Weight management rewards programs have evolved from using incentives for participation to a more outcomes-based approach, rewarding participants for losing weight and rewarding them more for keeping it off.

Weight management programs have proven to be effective, delivering a return on investment of approximately 5-1. What strikes me as interesting is that while weight management rewards programs have proven to be effective, many health and wellness programs are still not emphasizing these programs for their population and I am not sure why.

In a recent study published by the New England Journal of Medicine smoking was identified as the top cause of preventable death in the U.S., responsible for killing about 438,000 people each year. Even more astounding was the fact that General Electric spends $50 million annually on healthcare costs for smokers which didn’t include associated costs due to lost productivity.

Interestingly enough, GE ran a study to better understand how incentives influenced smoking cessation programs. The results further validate that incentives, when implemented strategically throughout the progression of behavior change have a significant effect on better health behaviors. Several points highlighted in the study include:

• The trial was designed to see how many of the 836 participants remained non-smokers over a 12 month period.
• Half of the participants were given: $100 for completing the smoking-cessation program, $250 for not smoking within six months after enrolling in the study and $400 for abstinence after six months more, confirmed by saliva or urine tests.
• After an additional six months, 9.4 percent of the paid group still wasn’t smoking though they were no longer receiving cash rewards.

Clearly the investment of $750 per participant to motivate smoking cessation is significantly less than the cost per employee that GE pays for smoking related health issues. And clearly, GE also understood that nicotine addiction is an extremely difficult behavior to break even when an individual wants to change. I believe that GA has seen success in their smoking cessation efforts for two reasons: 1) the use and value of incentives was meaningful enough to motivate participation and meaningful enough to sustain a changed behavior, and 2) GE’s commitment to this program over a longer period of time.

A study published in Postgraduate Medicine found that automated self-testing health stations in the workplace helped employees improve their management of hypertension and obesity.

Highlights from the study include:
• Over 21% of the employees voluntarily used worksite health stations to measure their blood pressure or weight.
• Worksite health stations identified 27% as hypertensive, 40% as pre-hypertensive, 38% as obese, and 35% as overweight.
• Approximately half of the employees with hypertension and 10% of the employees with obesity successfully reduced their health risks.

I found this study interesting due to the continuing lack of awareness that most individuals have around their health risks. In addition, the convenience that health stations afford employees mitigates the “I don’t have time to leave work and go to the Doctor” excuse that often times delays health risk or condition identification

A rather disconcerting Hewitt & Associates Survey indicates that 19% of respondents plan to drop health care coverage as a benefit over the next 3-5 years. While the survey respondents only numbered 343, the continuing undercurrent to the discussion around healthcare costs leaves little doubt that the impact of escalating costs is forcing companies to make decisions in an effort to protect corporate profitability and global competitiveness.

Health care reform is not an option it is a business imperative. The inefficiency of a massive system coupled with the lack of individual health accountability has created the perfect storm. If employers continue to drop coverage, a single payer system may end up being the only option.

“Promoting employee accountability” was ranked the chief health and prevention component of employers’ health care strategies in 2009. Employers have made significant investments in providing health services to better support healthy behaviors and mitigate acute care episodes. But that alone will not achieve the goal of employee accountability. While Consumer Directed Health Plans may shift a higher cost burden onto employees, I continue to believe that accountability has to be tied to a performance based culture.

Is there value in investing in a corporate health and wellness program in a tight economy? Stress related to job security, loss of personal wealth, and overall gloom about the future has caused many employees to be less focused at work, bring higher levels of presenteeism to the workplace and overall, less productive at a time when employers need heightened levels of productivity.

The benefits to investing in a corporate health and wellness program can be many but most notably the investment in human capital can result in:

• Mitigating catastrophic risk
• Decreased healthcare costs
• Reduced absenteeism
• Improved morale and employee productivity

Given the proven benefits, company-sponsored health and wellness programs are conceivably more important now than ever. With obesity rates on the rise and increasingly more stress than usual in the workplace and on the home-front, employee well-being is becoming more and more crucial to a company’s bottom-line.

I recently read a whitepaper by Hummingbird Health entitled Why Wellness Programs Fail and it got me to thinking about some additional observations I would make on why programs are not optimized as they should be. The whitepaper highlights some key failure points that are consistent with what I see when helping clients assess why their program isn’t delivering the results expected.

- The wellness movement has to start at the top. Executive management needs to embrace wellness as a business imperative not a “nice to have” and they need to live to that mission.
- Know the demographics of the workforce. Demographics are one key data point that help in disseminating the appropriate communications and rewards but I would suggest going a step further in taking the pulse of your population and their readiness for change. Understand what they expect, prefer and what types of tools, communications and rewards may actually engage them in the collective process of adopting healthier behaviors.
- Serving all employees. Understand the health of your workplace. Sounds easy enough but I am continually amazed at how difficult that is for organizations.
- Lack of communication. This is probably the single biggest reason that I would say wellness programs fail. There is not enough budget or emphasis given to the importance of communication either in content or frequency. Effective communication continues to reinforce attention on the wellness movement and it answers five key questions that employees continue to have: 1) what do you want them to do 2) why do you want them to do it 3) how do you want them to do it 4) what’s in it for them and 5) how are they doing.
- Scrimping on costs – spend money to save money on healthcare costs. I couldn’t agree more on this finding. Too often an organization tries to cast too broad a net and spreads investment dollars too thin with the result being a rather disjointed and haphazard program with very little strength to drive change. Make the most of those investment dollars and focus them on a couple of objectives with the idea that you can always phase in more services and interventions after the wellness movement picks up momentum.
- Goals – make them measurable. Begin with the end state in mind. What will be your measure of success in your wellness movement?
- Know the bottom line. Understand the impact of your workforce’s health on corporate productivity, value and profitability. At Maritz we call it the lifetime value of an employee.

Creating a wellness movement in an organization takes time, resources and investment. The last thing that you want is for it to fail. Taking some of these observations to heart may help in mitigating the risk of failure.

Following my last post I have a few more thoughts on segmentation and the impact it has on driving successful health and wellness incentive and communication programs.

In order to be of value, segments must be:

1) Identifiable: distinctly different on measurable variables
2) Substantial: large enough to matter
3) Accessible: reachable through a variety of communication channels
4) Stable: persist over time
5) Responsive: respond to efforts aimed at them
6) Actionable: differences are able to guide communication and reward strategies

In my last post I spoke briefly about the fact that organizations tend to use the health status pyramid or grid (see below) as a starting point for a segmentation strategy.

However, another method of beginning a segmentation strategy could be based on current and potential value of a participant in a specific health and wellness track.

The segmentation strategy sets the framework for whom, how and what the organization wants to communicate and reward. Essentially, segmenting a wellness participant population into more finite segments will enable an organization to better understand 1) how to engage their members, 2) direct the appropriate health management efforts, 3) identify which rewards will have the greatest impact on that population and 4) determine how to make communications more meaningful.

DMAA recently conducted a survey that indicates there is increasing interest in employer-based wellness programs. Some key points that the survey highlighted were:
• Keys to wellness program success include a strong willingness on the part of the participant to change, member engagement and physician engagement.
• Health plans and employers view participant satisfaction with wellness efforts as important measures of success.
• Organizations have an expectation of data integration across multiple health and wellness programs.
• Health Risk Assessments are the most popular wellness initiatives among employers.

Some of the conclusions of the survey fall in line with what I regularly see in the marketplace, but I thought there were two interesting points made in this survey. The first, being the role of the physician in the wellness program. So often, the conversation around wellness programs focuses on the participant, with very little attention given to the critical role that physicians and other types of care providers can and will need to play if we will ever truly achieve a well nation. When focusing their efforts on wellness incentives, employers and health plans alike rarely discuss how to motivate and recognize care providers in driving wellness.

The other interesting finding was around participant satisfaction being used as a measure of success. Most often, my clients use measures such as participation rates, engagement rates, health scores, etc. … to measure program success because those measures help to justify the financial investment necessary to maintain these programs. When you look at companies who have had success with wellness programs such as IBM, Pitney Bowes, Pepsi Co. there seems to be a common thread that has enabled these companies to be so successful and that common thread is that they have all created a culture of wellness that is a business imperative. For these organizations, wellness is part of their business strategy and part of their performance culture – it is a competitive advantage.

I would be interested in hearing your thoughts as to keys to success in wellness programs. Are they in line with the DMAA survey or if they differ, how?

Note to health plans: if you are offering health and productivity incentives for members to use health tools and services … make sure to pay them out or it could really impact your members’ feelings of goodwill and loyalty.

My health plan recently launched a health and wellness program with a great amount of enthusiasm and fanfare. To go along with what looks like some wonderful health services, the plan was also offering some intriguing and exciting wellness incentives and rewards for participating, staying engaged throughout the year and providing feedback on their program.

Sounds great doesn’t it? The first order of business was to take a Health Risk Assessment and earn a $100 gift card. Given that I am very focused on proactive healthcare and preventative maintenance (because of what I do for a living), I immediately called the 800 number and energetically informed them that I wanted to enroll in the new Health & Productivity program. This is what I heard, “I am sorry, but you are not eligible for this program. In fact you aren’t in our database as even being a member of our plan.”

I ask, “How could that be? I have my member card with my member ID and I just received a packet with all of the wellness program information.” I was then told that they would have to escalate this for further investigation … that investigation took 14 days. Ten calls later and many chats with “managers” of my health plan it was indeed confirmed that I was a member and eligible for the health and wellness program, however, there was one day left for me to take the Health Risk Assessment and receive my $100 gift card promotion.

I immediately took the Health Risk Assessment and awaited my gift card in the mail, dreaming of the things that I could do with that gift card – a nice 90 minute stress relieving massage … aahh. I waited and waited for weeks and then months. Finally, I called my health plan again and inquired about the status of my gift card only to be told that even though I had completed the HRA, the information was not received until the morning after the promotion ended and therefore I didn’t qualify for the gift card.

The long and short outcome of this story: I will never participate in my health plan’s wellness program again Instead I will stay healthy my own way, and if I have a choice to change health plans, you can bet that I am going to do it in a heartbeat.