To date much of the discussion around health reform has been focused on cost containment, IT and the delivery system but little has been mentioned about a key pillar in President Obama’s health reform initiative, the pillar of wellness and prevention. Today, wellness and prevention took front and center stage in the dialog that President Obama continues to have with the public, employers and other stakeholders regarding the national imperative for health reform.

What does President Obama’s announcement mean for preventive health? Like much of the initial dialog around health reform, I think that this is the beginning of reframing the discussion around individual accountability and the health system’s responsibility to lead the effort in educating and motivating critical behavior change. If the goal of the health reform effort is ultimately to bend the cost curve, through efficiency and inclusion of all into a system the root cause of cost escalation needs to be addressed. While I may be oversimplifying this, evidence continues to mount that individual health habits and behaviors are associated with a significant portion of preventable healthcare conditions and now is the time to address a root cause of healthcare costs - change health behaviors.

What I found interesting today is that employers who have successfully managed to contain their healthcare costs such as Pitney Bowes, Safeway and J&J have done so through effectively building an integrated wellness culture. In addition to experimenting with various benefit coverage and designs, these organizations actively talk, treat and reward their employess for personal health accountability. The organizations that President Obama mentioned today have some other fundamental elements that are critical to their success in developing a wellness culture. Their program elements are integrated, tied to a performance culture and include the recognition that incentives, rewards and continuous awareness and dialog with their employees enables the emotional connectivity that ultimately leads to individual engagement. These companies have proven that it is possible to lower costs through a focused effort on health and wellness. These companies have proven that an integrated health and wellness solution that truly engages individuals ultimately leads to increased productivity and a return on investment. Isn’t it time that we all begin to take a page from their playbook?

Several weeks ago my company presented a webinar on Health and Productivity Strategy with an emphasis on the “motivation” factor, truly rewiring the brain to change behavior. Since last week I have had numerous conversations with audience members on our Whole Brain Philosophy and the need to strategically integrate wellness rewards with strong communications, social networks and gaming in order to truly engage individuals in the behavioral change progression. The discussions have centered around Maritz framework of focus-repetition and reinforcement to rewire the brain.

Some very enlightening observations have come out of those conversations such as:
- There are opportunities to better integrate health management services with stronger motivation strategies to fully derive the benefits of your health and productivity investment.
- A critical component seems to be lacking in most health and productivity programs - communication.
- Health incentives are being used but not as strategically as they could in order to reinforce new behavior adoption
- Understanding your population in terms of ensuring appropriate rewards options, health support services and communication support is not happening

The result of this is disjointed health and wellness programs that are not really promoting behavior change. The one issue that continues to stand out to me as a challenge for organizations is in communications. I continue to see programs that front load the communications about health and wellness benefits during open enrollment but there are little to no communications pulsed throughout the year to keep the health and wellness program top of mind. The focus on the program is non-existent. The other ramification of not communicating throughout the year is that employers are missing an opportunity to recognize how their employees are doing with their wellness goals. The repetition and reinforcement are virtually non-existent.

The net-net in all of this is that in thinking about your wellness program, it is very easy to focus on the health services piece and then the incentive strategy but the importance of a robust communication strategy can’t be overlooked as a critical success factor.

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.

Last week my company presented a webinar on Health and Productivity Strategy with an emphasis on the “motivation” factor or what it takes to truly rewire the brain to change behavior. Since then, I have had numerous conversations with audience members on our Whole Brain Philosophy and the need to strategically integrate wellness rewards with strong communications, social networks and gaming in order to truly engage individuals in the behavioral change progression. The discussions have centered around Maritz framework of focus, repetition and reinforcement in order to rewire the brain.

Some very enlightening observations have come out of those conversations such as:
- There are opportunities to better integrate health management services with stronger motivation strategies to fully derive the benefits of your health and productivity investment.
- A critical component seems to be lacking in most health and productivity programs - communication.
- Health incentives are being used but not as strategically as they could in order to reinforce new behavior adoption
- Understanding your population in terms of ensuring appropriate rewards options, health support services and communication support is just not happening

The result of this is disjointed health and wellness programs that are not really promoting behavior change. The one issue that continues to stand out to me as a challenge for organizations is in communications. I continue to see programs that front load the communications about health and wellness benefits during open enrollment but there are little to no communications pulsed throughout the year to keep the health and wellness program top of mind. The focus on the program is non-existent. The other ramification of not communicating throughout the year is that employers are missing an opportunity to recognize how their employees are doing with their wellness goals. The repetition and reinforcement are virtually non-existent.

In thinking about your wellness program, it is very easy to focus on the health services piece and then the incentive strategy but the importance of a robust communication strategy can’t be overlooked as a critical success factor.

I met with a client recently and we were discussing the marked improvement that they have seen in their wellness program participation since they began using incentives. We discussed the positive wellness culture they have established, the healthier behavior adoption and the increase in preventive claims compared to total claims as a result of their wellness program. During our discussion a topic came up that few organizations consider when implementing an incentive program – the taxation of rewards.

I think my client put it best when they said “the positive benefit that is derived from wellness programs will result in reduced healthcare costs. But even more important is that our participants will have better health. We use incentives to reward participants for making difficult lifestyle changes, and yet the tax issue makes it feel as if we are penalizing them for doing something good.”

Organizations are struggling with the handling of taxation on incentive and reward programs. As a general rule, incentive prizes and awards given to individuals to reward them for certain achievements are taxable as ordinary income regardless of whether the reward is in the form of cash, merchandise of experiential.

This presents a concern to many organizations who feel that it is difficult enough to get individuals to participate in wellness programs and are concerned about the impact taxing may have on on-going engagement. My client feels that the government is too short-sighted on this issue. Organizations are rewarding participants for adopting behaviors that will ultimately lead to increased prevention and have a positive impact on the spiraling costs of healthcare. Yet, upon issuing a reward, organizations are concerned about the goodwill that is lost once they tax an individual on that reward. Often times, an organization will gross up the reward to off-set the tax cost to the participant, but that is much more difficult for health plans to handle when running a wellness incentive program. Something to consider when implementing a wellness incentive program – how will you handle the taxation issue?

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.

A new report from Trust for America’s Health and Robert Wood Johnson Foundation indicates that obesity rates rose for the second consecutive year in twenty-four (24) states and astoundingly NO states experienced a decrease in their obesity rates.

Here are a few insights to consider:
• More than 25% of adults are obese in 28 states.
• More than 20% of adults are obese in every state except for Colorado.
• In 1980 the national average of obese adults was 15%. Today it is estimated that 66% of American adults are overweight or obese.
• It is estimated that 23 million children are overweight or obese.

These statistics are frightening when you consider the fact that obesity is a trigger for many chronic health issues that plague our health system and continue to contribute to the escalating costs of chronic and multi-disease state care. Even more startling is the fact that the report found that many of the promising policies that have emerged to promote physical activity and good nutrition are not being adopted or implemented for a variety of reasons.

While organizations have typically used a disease management approach to try to manage and control weight of their employees and members, there is a company called Tangerine Wellness , has very compelling success stories about their ability to help people lose weight and keep it off. Recognizing that obesity is an issue that leads to many other health issues, Tangerine Wellness has used some basic principles of social networking, competition and long-term incentives to drive some amazing results for people who are overweight. Their success has been steeped in the understanding that losing weight is hard, but keeping it off over a long period of time can be even more difficult. Through the use of intermittent rewards and effective communication that recognizes participants when they hit key milestones, Tangerine has produced ROI numbers upward of 5% and has achieved participation and engagement rates averaging between 60% to 80%.

When considering programs where the health issue is as pervasive and serious as obesity, corporations may want to consider rewarding on outcomes over a 2 to 3 year period rather than soley on participation in a weight management program. Outcomes-based incentive programs do require more focus on HIPAA criteria however, I believe the ROI that companies like Tangerine have been able to deliver more than justify the investment in a robust outcomes-based incentive strategy.

Hewitt Associates recently published a survey on what to expect in healthcare in 2009 and the news is not pretty. With average raises hovering somewhere between 0-2%, the average healthcare premium is expected to increase 8.9% - well above inflation and salary increases. Yet, employees will continue to see more of the cost burden shifted to them in their benefits this year. I am no mathematician but it doesn’t take much to clearly see that this isn’t sustainable for employers and employees alike.

Health plans and employers must find ways to reduce these costs and employees have to become an active part of the solution. In a recent post, (link to the Employers Role in Health) I discussed the fact that only 12% of employees felt that employers had a role in educating and encouraging them to be healthy. That number must increase if we are to collectively stem the skyrocketing costs of care. Obviously the entire system contributes to these cost escalations, but employers and health plans can act as the catalyst for reshaping their organizations by making the right investments in wellness programs that become part of the organizational culture.

Once again, the key challenge for organizations is driving participation and engagement in these programs in order to encourage healthier habits and decision making. Health Risk Assessments are no longer good enough. While incentive and reward programs are focused right now in trying to drive initial participation and engagement, I wonder if organizations should start getting bolder with their incentive and reward strategy by offering meaningful rewards for health outcomes as opposed to participation. Have we reached a point where organizations need to push the envelope in thinking more about what is driving these costs up – inappropriate utilization and poor health outcomes and engage individuals in proving that they can indeed be healthy and recognize them for such an accomplishment?

An interesting survey by Hewitt Associates came out regarding the role that employers feel they must play in keeping the workforce healthy versus the role that employees see their employer playing. Below are some interesting sections from the report:
• The number of employers who say they will get more directly involved in managing the individual health of their employees jumped 25 percent from last year, reflecting a nationwide trend to find more ways to save money in a tightening economy.
• For the first time, keeping employees healthy was named as one of U.S. companies’ top business and workforce issues this year.
• But while companies believe they need to get more involved in keeping their workforce healthy, employees are less convinced.
• 75% of employees think that employers are responsible for helping them understand how to use their health plan, just 12% believe that companies have a role in helping them understand how to stay healthy.
• 88% of employees claim they engage in healthy behaviors, but when asked about specific steps they take toward living healthy, less that half actually take appropriate actions to reinforce the claim.

Wow. The statistic that stands out to me is that only 12% of employees believe that companies have a role in helping them understand how to stay healthy. That is a huge hurdle that employers need to tackle before they can expect wellness programs to work. I believe that Tim Stebtiford, principal of Hewitt Associates Communications practice, summed it up best when he said, “Companies need to stop communicating and start motivating. People don’t like to be told what to do and with a mind numbing array of Web sites and brochures from their employer, they often just tune out.”

There lies the opportunity. If employers are going to address the skepticism that employees have about their role in encouraging healthy behavior, why not use a strategic incentive and communication solution to begin to engage their employees in their wellness programs. It is apparent from this study that simply building and offering wellness services are not enough to entice employees’ participation. Employers must establish a trust factor and find methods to energize and motivate employees to use these services. Wellness incentives could and should be the next investment employers make to mobilize their employees to utilize the wellness services.

What are your thoughts on these findings and how employers can reposition their role in helping employees understand how to stay healthy?

A study released by Blue Cross and Blue Shield of North Carolina indicates that companies offering comprehensive wellness programs can realize an approximate cost savings of 25% in medical and absenteeism in about 3.6 years after implementation.

I find this study interesting because it speaks to some of my earlier posts that discuss the whole-brained approach that Maritz employs in the health and productivity solutions we deliver to clients. The bottom line is that human beings are complex individuals and that asking individuals to adopt and consistently act on new health behaviors is a very personal journey that requires time and continuous reinforcement.

Blue Cross and Blue Shield of North Carolina further discusses the mindset change employers are embracing – less cost shifting to drive behavior and more health services and wellness offerings to drive healthier outcomes.

The key to seeing this type of cost savings resides in a highly integrated approach to supporting the participant. Obviously, the wellness offering needs to include a wide variety of offerings and campaigns that keep it fresh and top of mind with participants. As I mentioned in a previous post, communication around five questions that participants want to know is critical:

1) What do you want me to do?
2) Why do you want me to do it?
3) How do you want me to do it?
4) What’s in it for me?
5) How am I doing?

Organizations tend to either neglect or take a prescriptive approach to questions four and five. The result: poor participation and engagement rates. Organizations that want to see 25% cost savings need to consider incentives and communications to be equally important investments in their comprehensive wellness programs.