Handout that accompanied my 2014 Trustmark Producer Conference keynote address.
Transcript of How Wellness Can Transform Your Benefits Solutions. Handout.
1. How Wellness Can Transform Your Benefits Solutions By Carol
Harnett Many Americans believe they are against health care reform
and the Affordable Care Act (ACA). Yet, researchers and comedians
such as Jimmy Kimmel alike demonstrated that when you break the ACA
down into its component parts, people universally like the tenets
behind the law. As Kimmel quipped, its the opposite experience of
what happens when you find out whats inside a Chicken McNugget you
actually like the ingredients. For many in the health and
insurance-related industries, health care reform is less about
being against the elimination of pre-existing condition provisions
and more about the impact the ACA is having on their jobs. Some
industry organizations speculate that the number of insurance
brokers could slip dramatically in as little as five years.
However, as with everything in life, opportunity exists inside
every challenge. And health care reform is fraught with potential
for new consulting opportunities and businesses. One of the
most-cited ACA cost-containment provisions in the group insurance
space is in the area of wellness. Using the fact that the United
States could decrease at least 75 percent of its health care costs
if the American lifestyle embraced at least 10,000 steps a day and
fewer trips to fast food restaurants for each resident, employers
have carte blanche to financially reward employees who meet certain
health standards, or shift more costs to employees who dont change
their ways. Thats where one of the major consulting opportunities
lies. But, there is a however that I must insert here. Currently,
employer-based wellness initiatives are facing a conundrum. On one
side of the equation, we believe that if all Americans were
normal-weighted, tobacco-free, daily exercisers, regular fruit- and
vegetable-eaters and minimal consumers of alcoholic beverages,
health care costs in the United States would ring in lower than
they do today. Juxtaposed against this projection, is the fact that
only 3 percent of Americans 1 percent of men and 2 percent of women
are able to execute all of the abovedescribed behaviors on a
regular basis. And this happens despite our best efforts to nudge
people toward better behaviors.
2. This is where consultants and brokers come in. People in
these roles can help employers vet out the best way to approach
wellness in the workplace. I maintain a prejudice that brokers who
never consulted in this area before have an advantage. They can
enter the field, take an objective look at whats transpired to date
and render an opinion from there. Without an emotional tie to the
topic, objectivity can become a selling point. So, where do you
begin? First, help employers do no harm. According to the Tufts-New
England Medical Center's comparative effectiveness database, less
than 20 percent of prevention strategies produce cost savings and
10 percent do harm. Employers need to make certain they do not
promote initiatives that may cause their employees or retirees
adverse effects that are worse than not having a test or not
knowing they have a condition. Two of the best current examples are
the promotion of mammograms and PSA testing, especially outside of
the recognized guidelines. Brokers can help employers sift through
these programs. Carol A. Harnett http://about.me/carolharnett
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3. Help employers find the programs that produce cost savings.
If you are new to consulting on workplace wellness programs, you
need to appreciate that there is a new mantra in town: Wellness
doesnt save employers money. A growing number of long-time employee
benefits, economics and wellness leaders are touting this line
loudly and are publicly questioning the money employers spend on
wellness programs. These people include brand-name speakers such as
Tom Emerick (retired global leader of benefits design for Walmart)
and Al Lewis (president of the Disease Management Purchasing
Consortium). Together, they recently wrote a book called, Cracking
Health Costs, which is causing enormous debate in some circles so
much so that long-time industry expert Ron Goetzel felt compelled
to present a webinar entitled, Wellness Critics Attack!
Understanding What is Fact and Fiction. As referenced previously,
however, approximately 20 percent of wellness and prevention
strategies and treatments produce cost savings (so, programs exist
that save money), while 70 percent are considered cost-effective.
Carol A. Harnett http://about.me/carolharnett 3
4. So, what does cost-effective mean? According to Milton
Weinstein of the Harvard School of Public Health: The World Health
Organization has a rule of thumb: Three times per-person income per
qualityadjusted life year gained is a cost-effective intervention.
In [the United States], perperson income is about $40,000, so an
intervention that costs less than $120,000 per quality-adjusted
life year would be considered cost-effective according to the WHO
rule. David Cutler, the Harvard economist, has suggested $100,000
as a reasonable value. Brokers can incorporate the concept of
cost-effectiveness to help employers make decisions about how to
promote wellness and prevention in the workplace. Carol A. Harnett
http://about.me/carolharnett 4
5. Make certain that wellness initiatives link with other
programs that help employees address life issues. A lot of the time
invested in wellness program development has focused on behavior
change without much consideration given to the barriers that get in
the way of people developing new habits. While employees understand
they are overweight, out of shape or have elevated HbA1c levels,
they often cant problem solve how to address these issues and take
care of the elderly parents, or manage financial problems, or deal
with personal relationship troubles. The Eliza Corporation in
partnership with the Altarum Institute studied and tested the
concept of life obstacles such as caregiving, financial stress and
relationship problems and how they interfere with health. These
life events combined with behaviors that make them worse (sleep
issues, feeling sad or down and/or substance use) and factors that
make them easier to cope with (social support, spirituality and
exercise) can make employees more or less vulnerable to how they
perceive their health and use the health care system. The best
wellness programs offer employees and their dependents the option
to talk with live counselors (often called health coaches or nurse
coaches) who can assist Carol A. Harnett
http://about.me/carolharnett 5
6. people in dealing with their life obstacles or live transfer
employees to resources that may help them (at minimum, transfer
them to an employers employee assistance program). Help employers
understand the value of investment of wellness programs by
including measures that are broader than health care spending.
Emerick and Lewis are not lone voices in the area of questioning
the return on investment of these initiatives, but there is another
way to consider wellness efforts. Dee Edington, one of the
original, modern-day wellness researchers revised his viewpoint on
the impact of wellness in the workplace about seven years ago.
Unlike Emerick and Lewis, however, Edington believes wellness
initiatives still possess value but we need to measure their impact
differently. "Wellness puts all its money on behavior change,"
Edington shares. "And employers place all their attention on the
workforce instead of the workplace even though recidivism is so
high." Edington thinks wellness programs can't save enough in
health care costs to make a difference "maybe $200 to $300 [per
employee each year], at best" but he believes a wellness initiative
can create shareholder value. How? By increasing job satisfaction,
happiness factors and creating a great place to work. By
association, according to Edington, wellness programs raise
employee loyalty, decrease turnover and increase creativity and
productivity. And that's good for the business' bottom line.
Edington and others including Bob Merberg from Paychex are
proposing that, instead of linking wellness programs to changes in
health care costs, employers should follow metrics such as
increased employee motivation, engagement, retention, attendance
and productivity instead. What underlies this new perspective is a
shift in focus to the value of investment not the return on
investment of wellness programs. But how can brokers and other help
employers turn what feels like rhetoric into practical tactics and
an overall strategy? Lets start with a basic overview of what we
mean when we reference prevention and wellness programs. Prevention
breaks down into two major buckets: primary and secondary
prevention. In primary prevention, your focus is to encourage
employees to maintain as many healthy behaviors as possible before
they have a medical episode or acquire a clinical diagnosis. The
message to these employees is simple: Keep up the good work. Carol
A. Harnett http://about.me/carolharnett 6
7. In secondary prevention, you are trying to get employees who
may have newly diagnosed medical conditions such as hypertension or
diabetes, or have recently experienced a medical event such as a
heart attack (myocardial infarction), to consider changing their
behaviors. And the behaviors you want them to embrace are
activities like eating well, exercising regularly, eliminating
their use of tobacco products and/or moderating how many alcoholic
beverages they drink on both a daily and weekly basis. This is no
small feat. The message here is more complicated and somewhat
emotional: If you want to live to enjoy retirement, you need to
make some changes. Now, one of the biggest areas where employers
make mistakes when it comes to prevention, health and wellness
programs is confusing surveillance and population health
measurement programs with wellness activities. Surveillance
programs include measurement activities such as completing health
risk assessments (HRAs) or participating in biometric screening
(blood tests that measure items such as glucose or cholesterol
levels) and preventive physical exams. In contrast, wellness
initiatives can run the gamut from traditional smoking cessation,
exercise and weight loss programs to customized approaches that can
include walking meetings, vending machines that feature fresh
produce and healthy snacks and home delivery of healthy meals to
employees and their families. Essentially, surveillance programs
give employers a baseline measurement of their employees current
health statuses and either have no impact on health care costs, or,
by some estimates, have the potential to increase costs through
false positive results, which lead to additional medical testing.
Wellness programs are largely found to have little to no financial
return on investment when it comes to health care costs on an
aggregate basis, although as previously referenced, they have the
potential to positively impact employee productivity and morale.
So, how can you help employers who already invested in wellness
programs with the hope to either save health care dollars or
maintain health care costs? All is not lost. As my friend and
mentor, Harvard Medical Schools Ron Kessler, always counsels, ROI
is extraordinarily local. But it can be achievable in small dollar
amounts and can also add to the value on investment. Heres how you
begin. Start any wellness initiative with a focus on acute
prevention. Profit centers can be found around acute prevention; in
other words, an intervention, which produces an almost-immediate
savings. Carol A. Harnett http://about.me/carolharnett 7
8. If the employers workforce turns over every three years, you
can't focus on chronic prevention initiatives that may reduce risk
20 years from now. Employers need to focus on the time window of
effectiveness. Acute prevention yields the best ROI when it's
focused on challenges like seasonal allergy management, and
accident and injury prevention. In fact, there's a connection
between seasonal allergies and the rate of accidents. Accidents go
up during the allergy season. Employees may take a sedating
over-thecounter medication like Benadryl, which can be the
equivalent of drinking three alcoholic beverages. Making certain
that workers use non-sedating medications is a direct method to cut
down on the accident rate. Brokers can help employers influence
their employees' accident and injury rate -- both on and off the
worksite -- by making certain the pharmacy-benefit formulary is
comprised of non-sedating allergy medications. Pay attention to
accidents and injuries. One place where everything comes together
acute prevention, chronic-condition management, safety and legal
costs are accidents and injuries. About one in five accidents is
caused by a chronic condition. For example, musculoskeletal
conditions can lead to falls, and untreated ADHD can lead to four
times as many car accidents. Employers should consider investing in
treatment for certain types of conditions that are particular to a
large number of their employees and can result in increased risk
for accidents and injuries. Using an experimental prevention study
design, employers can follow whether treatment brings down the
injury and accident rate almost immediately. This type of approach
is much more likely to yield a positive ROI than trying to help
employees lose weight. Look for wellness and prevention initiatives
that keep employees out of the emergency room, out of the hospital
and/or get employees out of the hospital as soon as it is safe to
do so. If an employer needs to maintain or reduce health care
spending, start your analysis with the employees use of hospitals.
The long-time mantra in addressing health care costs is to keep
employees out of emergency rooms, avoid unnecessary hospital
admissions and, if an employee or their dependent is admitted, get
them out of the hospital as quickly as possible. The third item is
as much a safety issue as it is a cost concern. At any given time,
about one in 20 patients has a hospital-acquired infection -- and
this results in about 100,000 deaths every year. Carol A. Harnett
http://about.me/carolharnett 8
9. Use publicly-available data to make annual decisions about
targeted health and wellness programs. Flu-shot programs are often
brought up as a sure-fire way to achieve a ROI. There is good data
available about flu shots. You can make a clean decision about
whether an employer should offer a worksite-based program and
pretty quickly determine whether the initiative had an impact
afterward by following the accident and sickness rates during the
flu season. The challenge with flu-shot initiatives is you have to
make an educated guess using information from the CDC and others
about whether it will be a bad flu season. If there's a high flu
rate, the employer will easily make back the costs. But, if it's
not a bad flu season, the program won't pay for itself that year.
You should also help employers factor in how easily their staff is
replaced and the impact increased worker absence has on the
business. In the high-tech industry, it makes sense to have an
annual flu-shot program. But it may or may not show an ROI in
companies that rely heavily on hourly workers. And don't forget
about employees stress levels, mental health and happiness. No area
has captured more attention in the employee health and wellness
space than employee happiness. However, given the economic status
of the United States for the last five years, little has been
accomplished in this area. For several years prior to the economic
downturn, I was involved in research that demonstrated that
employees who worked for companies that landed on lists such as
Fortunes Best Companies to Work For were at work more often. And
preliminary research indicated they spent less money on health care
despite their health status. For the actuaries with whom I worked
and researchers like Edington understanding employees happiness and
life satisfaction levels has become the holy grail to appreciating
what may address health care spending and increase employee
attendance, customer service and productivity. While much is made
about what large employers, such as Google, Inc., SAS and Wegmans
Food Market, Inc. do to ensure happy employees, small- and
medium-sized companies are also demonstrating effective
interventions that may be called wellness interventions of the
future. The following examples are taken from the Great Place to
Works Best Small and Medium Workplaces List. INTUITIVE Research and
Technology Corporation: Managers are held accountable when their
direct reports dont take enough time off. Badger Mining
Corporation: With hunting season a near-sacred affair in Wisconsin,
employees who come to work on opening day are paid double-time,
showing that the company understands the sacrifice. Carol A.
Harnett http://about.me/carolharnett 9
10. Walker & Dunlop: Provides employees with 48 hours of
PTO per year to volunteer. McMurry: Grants unlimited PTO for
bereavement. EILEEN FISHER: Each employee is given $2,000 to
support their personal growth through self-selected education and
wellness programs. What is important to keep in mind with each of
these approaches is that many are customized to the employers
unique population and environment. Small steps may lead to big
rewards. B.J. Fogg (a part-time Stanford University professor and
social scientist who focuses on the overlap between persuasion and
computers and mobile phones to foster behavior change), is
currently doing work on something he calls, 3 tiny habits. Foggs
approach combines triggers with small steps or habits that may lead
to larger behavior changes. If sustainable behavior change is an
employers goal, the use of small steps and tiny habits may become
the ultimate way to achieve success. It may also help employers
realize a wellness strategy that embraces the value of investment.
Carol Harnett is a widely respected consultant, speaker, writer and
trendspotter in the fields of employee benefits, health and
productivity management, health and performance innovation, and
value-based health. Follow her on Twitter via @carolharnett and on
her radio show, CoHealth Checkup. Resources: (1) (2) (3) (4) (5)
(6) (7) CoHealth Checkup radio broadcast archive:
http://www.blogtalkradio.com/cohealth-checkup Human Resource
Executive Employee Benefits Column:
http://www.hreonline.com/HRE/browse/Benefits%20Column.jhtml B.J.
Foggs 3 Tiny Habits: http://tinyhabits.com Great Place to Work Best
Small and Medium Workplaces:
http://www.greatplacetowork.com/best-companies/best-small-a-mediumworkplaces
Fortunes Best Companies to Work For:
http://money.cnn.com/magazines/fortune/best-companies/2013/list/
Tufts New England Medical Centers Comparative Effectiveness
Registry: https://research.tufts-nemc.org/cear4/ The Employee
Wellness Network Blog by Bob Merberg:
http://employeewellnessnetwork.com Carol A. Harnett
http://about.me/carolharnett 10