Workers' wellness can pay off for employers' bottom line, insurers say
Employers are rapidly expanding “wellness” programs for their workers as a strategy to reduce galloping cost health care cost increases.
Large employers in the state, like major oil companies, have long embraced wellness, offering on-site exercise facilities and biometric screening, for example.
It’s been a tougher sell for small employers.
But there are now demonstrated cost savings, and more small employers becoming converts, said Jeff Davis, president of Premera Blue Cross of Alaska.
With health care costs increasing at annual rates of 12 percent to 14 percent in recent years, there’s a lot of motivation to do something, Davis said.
The latest evidence in support of wellness is a survey of 600 U.S. employers in 2011 by Towers Watson/National Business Group on Health, Davis said.
It showed that a group of “high performing firms,” those which embrace health care cost control strategies, including wellness, reduced their rate of growth of health care costs over several years to about 1 percent annually in 2010 compared with an average of 10 percent rates of cost growth among “low performing” employers, or those which did not adopt such strategies.
The report is Towers Watson’s “2011 Employer Survey on Purchasing Value in Health Care.”
They survey also showed that employees at companies that embrace the strategies pay 20 percent less on average for their health benefits than employees at low-performing companies.
“Apart from the obvious advantages of paying lower costs, affordable health care is key to providing a competitive reward package, and to attracting and retaining top talent,” the report said.
Davis, of Premera, said large employers haven’t needed much persuasion on wellness programs, but the idea has tougher for small employers to accept because of worries about the extra administrative burdens as well as the costs.
“People always asked what the return on investment would be for an investment in wellness initiatives. But when you can show a chief financial officer numbers like these (in the Towers Hill survey) they realize health cost management can be a business strategy. In a low-margin business it can be really important,” Davis said.
Premera is a big supporter of wellness for its own employees as well as clients, and has been promoting programs with its small group employers in recent years, Davis said.
For three years the company has offered a reduction on premiums for employers in its small group health plans who reach a certain percentage of employees enrolled in voluntary basic wellness programs, doing things like participating in a confidential health appraisal and doing their “numbers,” the biometric screenings for cholesterol, blood pressure, body-mass index and other basic health indicators.
“The percentage is based on a sliding scale. However, in general most employers can get discounts when they have 60 percent of employees involved,” Premera spokeswoman Amy Carter said.
About 40 percent of Premera’s small group customers now have enough employees enrolled in the voluntary screening to qualify for the premium discounts.
“A Health Risk Assessment is an online health survey that asks a series of lifestyle, physiological and medical history questions to help determine your current health and your risk for long-term disease or illness,” Carter said. The assessments are confidential.
“A biometric screening is a brief exam, a drawing of blood draw, blood pressure, height and weight, to obtain biometric values, which are important indicators of current health status. When you participate in a screening, you will learn about your blood pressure, cholesterol, glucose and body mass index,” she said.
Just a person’s knowledge of these numbers, particularly if the information gives early warning on a potential problem, is often enough to motivate people to act.
The premium discount gets more substantial when more employees do the risk assessments and screenings.
“If an employer has 100 percent participation (by their employees), they can receive as much as $210 per employee per year,” off an employer’s premium, Carter said,
Premera is now taking this a step further. Davis said that in July the company will begin offering cash payments to employees in small group plans who participate in voluntary health questionnaires and biometrics screening.
The employee incentive payments, in the form of a $150 debit card, won’t affect the employer’s discount on its premiums, Davis said. In fact, it will be available to the employee even if the employer doesn’t qualify for the premium discount, he said.
The screenings are the first step in a wellness strategy. The next step is to encourage employees to exercise, watch their diets and keep weight within healthy ranges, and to continue to get regular health screenings.
Another, more advanced part of a strategy is “case management” for employees with identified health problems like diabetes. Most commonly, case management takes the form of lining up a health “coach,” usually a nurse, to advise the employee, and to make it convenient for employees to visit a clinic.
“This is to help people get to the right place at the right time,” in terms of help and advice, Davis said.
Case management is important because it’s well established that chronic disease is major factor in rising health care costs, and helping people manage chronic conditions can help reduce costs, Davis said.
“Seventy-five percent of what we spend on health care is on chronic conditions,” he said. “Unfortunately, one-third of these conditions are preventable.”
Preventable in that those conditions generally are induced, or at least influenced, by lifestyle and behavioral causes, like smoking or being overweight, Davis said.
People can change behavior, however, and a goal of many wellness programs is showing people how to do it.
Davis said there are four elements, mainly: “Move more, watch what you eat, don’t smoke, and use seat belts,” he said.
On a national level, companies are rapidly expanding wellness in various forms into health care cost-control strategies, the Towers Watson survey showed. Twenty-four percent of firms responding to the survey said that in 2012 they will include rewards for employees who show improvements on biometric indicators, up from 14 percent in 2011.
Ten percent of firms surveyed in 2011 offered rewards for employees completing requirements for a “healthy lifestyle activity,” like enrolling in a fitness program. This increased to 16 percent in 2012, the survey response showed.
There was a sharp increase in firms offering rewards, or imposing penalties — for smokers and users of tobacco — from 6 percent in 2011 to 14 percent who planned to do so in 2012, according to the survey results.