A recent blog on HBR.org proposed to deliver “The Cure for the Common Corporate Wellness Program.” But as with any prescription, you really shouldn’t swallow this one unless all your questions about it have been answered. As a physician, a patient, and a businessman, I see plenty to question in Al Lewis and Vik Khanna’s critique of workplace wellness initiatives.
With their opening generalization that “many wellness programs” are deeply flawed, the authors dismiss a benefit enjoyed by a healthy majority of America’s workers. Today, nearly 80% of people who work for organizations with 50 or more employees have access to a wellness program, according to a 2013 RAND study commissioned by the U.S. Department of Labor and the U.S. Department of Health and Human Services.
It’s not clear whether the authors are intentionally dismissing or simply misunderstanding the wealth of data that shows how wellness programs benefit participating employees. The RAND study summarizes it this way: “Consistent with prior research, we find that lifestyle management interventions as part of workplace wellness programs can reduce risk factors, such as smoking, and increase healthy behaviors, such as exercise. We find that these effects are sustainable over time and clinically meaningful.”
Lewis and Khanna, however, don’t focus on such findings. Instead, they question the motives of a company for even offering a wellness program, which they slam as an “employee control tool” and “a marketing tool for health plans.” And, in perhaps the most baffling statement of all, the authors suggest that workplace wellness initiatives are “trying to manipulate health behaviors that are largely unrelated to enterprise success” (emphasis mine).
Let’s consider that piece by piece. What are the behaviors that corporate wellness initiatives are trying to influence? According to the RAND study, the most common offerings — available in roughly 75% of all wellness initiatives — are on-site vaccinations and “lifestyle management” programs for smoking cessation, weight loss, good nutrition, and fitness. In short, companies want to reduce the risk that their workers will get the flu, develop lung cancer, or suffer from the many debilitating conditions linked to overweight and a sedentary lifestyle. How could these initiatives be deemed “largely unrelated” to the company’s success?
Continue reading “In Defense of Corporate Wellness Programs”
Filed Under: THCB, The Business of Health Care
Tagged: corporate wellness, Employers, Rajiv Kumar, workplace wellness programs
Feb 21, 2014
T was never a star service tech at the auto dealership where he worked for more than a decade. If you lined up all the techs, he wouldn’t stand out: medium height, late-middle age, pudgy, he was as middle-of-the-pack as a guy could get.
He was exactly the type of employee that his employer’s wellness vendor said was their ideal customer. They could fix him.
A genial sort, T thought nothing of sitting with a “health coach” to have his blood pressure and blood taken, get weighed, and then use the coach’s notebook computer to answer, for the first time in his life, a health risk appraisal.
He found many of the questions oddly personal: how much did he drink, how often did he have (unprotected) sex, did he use sleeping pills or pain relievers, was he depressed, did he have many friends, did he drive faster than the speed limit? But, not wanting to rock the boat, and anxious to the $100/month bonus that came with being in the wellness program, he coughed up this personal information.
The feedback T got, in the form of a letter sent to both his home and his company mailbox, was that he should lose weight, lower his cholesterol and blood pressure, and keep an eye on his blood sugar. Then, came the perfect storm that T never saw developing.
His dealership started cutting employees a month later. In the blink of an eye, a decade of service ended with a “thanks, it’s been nice to know you” letter and a few months of severance.
T found the timing of dismissal to be strangely coincidental with the incentivized disclosure of his health information.
Continue reading “What If Your Employer Gets Access to Your Medical Records?”
Filed Under: THCB
Tagged: Al Lewis, data breaches, Employers, personal health records, Privacy, Vik Khanna, Wellness, workplace wellness programs
Feb 19, 2014
So many old rules in health care and insurance no longer seem to apply.
I keep stumbling upon situations, where, what used to be up is now down and what used to be down is now up.
No one seems to know for sure how things will settle out under the new reality created by Obamacare and the even more unpredictable reactions to the law by health care companies, employers and, most especially, you and me.
I’ve started using the term “weightlessness” to describe this state we’re in. Picture the astronauts on the international space station, floating through a room, flipping at will, as likely to settle on a wall or on the ceiling as on the floor.
That’s what life is like under Obamacare now—for physicians, hospital administrators, insurance executives, benefits brokers and employers.
Here are a few examples:
1. I wrote last week about how a chunk of workers, even at large employers with generous benefits, would actually get a better deal on health insurance from the Obamacare exchanges than from their employers. So their employers are starting to consider whether they should deliberately make health benefits unaffordable for those low-wage workers, so they can qualify for Obamacare’s tax-subsidized insurance.
That could be good for both employers and employees. The effect on taxpayers, which would switch from granting a tax credit to employers to instead granting it to the employees, is unclear.
2. Even though insurers were certain that price would be king on the Obamacare exchanges, that hasn’t led most customers to buy the plans with the cheapest premiums. As I wrote Friday, 76 percent of those shopping on the exchanges in my home state of Indiana have picked the higher-premium silver and gold plans, with only 24 percent picking bronze plans.
“There are a few geographies where we believe we are gaining share despite lower price competition which points to the value of our local market depth, knowledge, brand, reputation and networks,” WellPoint Inc. CEO Joe Swedish said during an January conference call with investors.
It’s possible that’s a result of older and sicker patients being the earliest buyers on the exchange, and that as healthier people buy coverage, they’ll gravitate to the low-cost bronze plans. But that hasn’t happened—which, as I wrote on Friday, has proved wrong hospitals’ concerns about the super-high deductible bronze plans.
Continue reading “The Weightlessness of Obamacare”
Filed Under: Uncategorized
Tagged: Benefits, Employers, Insurers, J.K. Wall, Milliman, Obamacare, Risk adjustment, Subsidies, the business of healthcare
Feb 18, 2014
The Republicans have an alternative to Obamacare and they may have given the Democrats a big political gift.
The proposal was unveiled last Monday by Republican Senators Richard Burr, (NC), Tom Coburn (OK), and Orrin Hatch (UT).
The Republican plan targets many of the most unpopular parts of the Affordable Care Act such as expensive mandated benefits and the resulting lack of choice, the individual mandate, the employer mandate, and age-rating disruptions.
My sense is that most independent voters––the ones that matter in an election-year––don’t want Obamacare repealed; they want it fixed.
The problem for Republicans is that they have such a visceral response to the term “Obamacare” that they just can’t bring themselves to fix it. The notion that Obamacare might be fixed and allowed to continue as part of an Obama legacy and as a Democratic accomplishment is something they can’t get past.
So, the only way Republicans can propose an alternative to Obamacare is to first wipe the health insurance reform slate clean and start over.
Continue reading “The Republican Alternative to Obamacare: Their Aversion to Fixing it May Prove to Be a Political Mistake”
Filed Under: THCB
Tagged: Employers, Insurance Subsidies, Medicaid Expansion, Obamacare, Pre-Existing Condition, Republicans, Robert Laszewski, Tax Exclusion, The ACA
Feb 4, 2014
President Obama rarely shies away from an opportunity to tout successes in U.S. health care, but in last night’s State of the Union oddly omitted any mention of the new and optimistic report about U.S. health spending from actuaries at the Centers for Medicare and Medicaid Services (CMS).
The finding: from 2009 through 2012, health care spending in the U.S. grew at the slowest rate since the government started collecting this data in the 1960s.
The actuaries found that in 2012 spending “stabilized,” growing by 3.7 percent in 2012, and health care accounted for a slightly smaller percent of GDP than the prior year, 17.2 percent versus 17.3 percent in 2011.
Perhaps an actuarial report proclaiming stable growth doesn’t make for much of an applause line for a State of the Union speech. But for confessed policy wonks like me, it’s as good as a Hollywood blockbuster.
So get out your popcorn, here are five Hollywood moments in the report.
1. Ninja Combat
When the report came out in early January, the Obama administration quickly ascribed the good news to Obamacare. But, lo and behold, the actuaries wielded their slide rules like weapons.
They respectfully disagreed with their president, pointing out that few of the provisions in the health reform law were actually in place during the slow-growth years in question. The actuaries conclude that most of the cost stability results from the economic recovery process.
Given the silence in the State of the Union, they may have been given the last word on the subject.
Continue reading “Why Didn’t the President Mention the Latest Good News on Health Costs?”
Filed Under: THCB
Tagged: CMS, Employers, health deductible health plans (HDHP), Health Plans, Healthcare spending, Leah Binder, SOTU 2014, The ACA
Jan 29, 2014
Facing thousands in extra insurance costs, smokers appear to be the Affordable Care Act’s (ACA) biggest losers. Employers are allowed charge smokers up to 50% more for their medical coverage than nonsmokers , starting in 2014.
On November 25, Fox News put it best: “Obamacare Policies Slam Smokers,” , noting that “smokers are the only group with a pre-existing condition that Obamacare penalizes.” THCB itself has headlined: Smokers Face Tough New Rules under Obamacare.
And these headlines are absolutely accurate — meaning that, with the possible exception of the e-cigarette, ACA is the best thing that has happened to employed smokers ever.
Here is how we arrive at this conclusion. The data is mixed on whether smokers incur much higher healthcare costs or just slightly higher healthcare costs during their working ages than non-smokers do. None of the data shows that their costs are lower, but let’s say there is no impact on health spending.
Nonetheless, the following is incontrovertible: smokers take smoking breaks.
Remarkably, there are no laws specifically governing smoking breaks, and like most other quantifiable human resources issues, no one has quantified them. But we all observe these breaks, and about a fifth of us participate in them. They reduce productivity. By definition, if you are outside smoking, you are not inside working.
Sure, some smokers make up the time by working harder when they aren’t smoking…but (1) many non-smokers work hard too and (2) some workplaces, such as inbound call centers, don’t offer the luxury of catching up later because they operate in real time. Lacking quantification, fall back on your imagination…and imagine what you would do if you ran a company in which non-smokers spent as much time mulling around outside as smokers do. That should give you an understanding of the impact of smoking breaks on productivity.
Continue reading “Are Smokers Really the ACA’s Biggest Losers?”
Filed Under: OP-ED, THCB
Tagged: Al Lewis, Employers, smoking, smoking cessation, The ACA, Vik Khanna, Wellness
Dec 1, 2013
Obamacare is impacting the small group insurance market in many of the same ways as the individual health insurance market. While employers with less than 50 workers don’t have to provide coverage, if they do they are required to comply with the same essential benefit mandates, age rating changes, and pre-existing condition reforms the individual market faces.
That means essentially all small group policies cannot continue as they are––they have to be discontinued.
What makes things a bit easier, if not any less expensive, is that small employers typically have health insurance brokers to run interference for them and help them through this change where individual consumers often get that dreaded cancellation letter telling them they will not have health insurance after a certain date if they do not act quickly in what is a confusing marketplace in the best of times.
The first small group renewals are now occurring––the January 1 renewals that typically have to be delivered during the month of November under state law.
Many employers are facing significant changes in order to comply with Obamacare and therefore price increases. One Maryland broker I spoke to this week has 90 small group accounts and he reports his smallest increase was 15%, his largest was 69%, and most are in the 30% – 40% range.
(By comparison, Mercer just announced the average large employer health care cost increase for 2014 will be 5.2%, meaning small groups could have reasonably expected an increase under 10% without Obamacare.) The biggest rate increases are generally going to those employers with the youngest groups the most impacted by the new “age compression” rules.
Does this mean these small employers’ coverage has been outright cancelled and they will now send their workers to the exchanges, as I have heard some commentators argue?
No, at least not anytime soon.
But that does not mean that lots of these small employers aren’t angry and confused.
What are these small employers doing?
Continue reading “The Next Shoe to Drop: Small Group Health Insurance Cancellations”
Filed Under: THCB
Tagged: Employers, Health Insurance Exchanges, Health Plans, Robert Laszewski, Small Business, The ACA
Nov 21, 2013
All eyes are on the hullaballoo created by the challenges at Healthcare.gov and several of the states’ public insurance exchanges. Yet all the while, like in a magic show, attention has been diverted from the real action going on elsewhere. Quietly and in a relatively drama-free way, the private health insurance exchanges are busily taking over the world of insurance and, in my opinion, portend a radical set of changes in how our health insurance system operates.
Several years back, a number of companies began building private health insurance exchanges to initially help companies offload the incredible burden of retiree benefits. Companies such as Extend Health (now owned by Towers Watson), Senior Educators (now owned by Aon), and several others provided a way for large employers to get themselves out of the business (and balance sheet liability) of providing group benefits for retirees, instead providing them with money to purchase their own individual health policies through then small, now large companies. The private exchanges went about the business of building websites that work, call centers that buzz and a wide array of insurance product offerings at various prices. Now, several years later, hundreds of thousands and possibly millions of individuals are out there shopping their little hearts out, choosing their own plans, and dealing with the consequences of high deductibles and the like.
These various private exchanges are now poised and ready to begin serving active employees in 2014 as guaranteed issue (the requirement that all can be insured and no one turned away) goes into effect as a result of the Affordable Care Act. And lest you think this is a small marketplace, you are wrong. In 2008 there were about 120 million total employed workers and just over half of these worked for companies of 500 employees and above (39 million worked for companies with 5000 employees or more). In other words, we are talking about nearly half of American adults and that doesn’t even include the dependents they bring along into their insurance plan.
Interestingly, such large US employers as Walgreens and Petco and DineEquity (parent company of Applebee’s Neighborhood Grill & Bar® and IHOP® restaurants) are all-in on the private exchange program, committing to transfer all of their employees from group plans to the exchange to purchase individual plans come January 2014. The exchanges of Towers, Aon, Mercer, Buck Consultants and a plethora of others are alive and well and open for business at exactly the time when employers are trying to figure out how fast they can reasonably get out of the middle of health insurance administration and run for the hills.
Continue reading “While Healthcare.gov Struggles, A Different Story Plays Out On The Private Exchanges”
Filed Under: Tech, THCB, The Business of Health Care
Tagged: Employers, Extend Health, Health Insurance Exchanges, Lisa Suennen, Private Exchanges, The ACA, Wal Mart, Walgreens
Nov 3, 2013
That past month of debate over the botched launch of the health care exchanges has brought the programming geeks, and their hired mouthpieces, out in the open to defend the indefensible. As painful as this has been for so many Americans, we cannot help but be amused to hear so many commentators doing their best impression of Captain Renault and expressing their shock that the federal procurement system could have produced such an outcome. Of course, most of this is a sideshow, the opening act to an even more serious drama in the making.
Let us be clear from the outset, the rollout of Healthcare.gov is an embarrassment. However, this only becomes a real problem if it dissuades enough people who were already marginal customers with respect to their purchase of health insurance on the exchanges to simply pay the penalty and avoid the hassle of staring at a computer screen, waiting on hold for hours, or refusing to try again once the geeks get this all sorted out.
While the self-appointed technology experts on both sides of the aisle have been debating the causes of the web site debacle, attention has been diverted away from the necessarily frank discussions we must have about the real potential benefits and looming costs of the exchanges.
In a valiant attempt to steer the conversation towards the benefits of the ACA, President Obama held a rose garden press event where he repeatedly claimed that the health insurance on the exchanges is good product. But as is all too often the case, the President talked about the benefits and side stepped the difficult conversation about the costs.
At least he is half right. If they can ever fix the web sites, people with pre-existing conditions who shop on the exchanges will gain access to insurance at a more affordable price. Enrollees may save thousands of dollars. But let’s not kid ourselves.
The exchanges do not reduce the cost of medical care; they only change who pays for it. And we all know who that is.
Continue reading “The Opening Act”
Filed Under: Economics, THCB
Tagged: business of healthcare, Craig Garthwaite, David Dranove, Economics, Employers, Health Insurance Exchanges, Healthcare.gov, Obama administration, The ACA
Oct 28, 2013
Employers face a multitude of challenges under the Affordable Care Act (ACA). The ACA fundamentally changes the landscape for employer sponsored health insurance, forcing businesses to understand, navigate, and adapt to a quickly changing, highly complex, and still uncertain marketplace for health benefits. To illustrate this, here are 10 pain points employers face in dealing with Obamacare:
1. Explaining ACA to Employees, Dependents, and Retirees:
Effective internal communications is a strong indicator of a firm’s financial performance. Indeed, internal communications is an essential ingredient for an engaged, productive workforce with low turnover. This is all the more important under the dynamics and complexities of the ACA.
Every employer must be prepared to explain the ACA. Like it or not, employees will look to their employer to explain the Affordable Care Act, even if the employer is not changing benefits. Employees have friends and family who will need help understanding Obamacare. The airwaves, mail boxes, and street corners will be packed with messaging from all angles and interests – some pro, some con, some partisan, some factually wrong, some even fraudulent, much of it confusing, and all of it mind numbingly complex.
This is an enormous new opportunity for employers to beef up their internal communications, demonstrate leadership, and support employees and their families. This will also serve to boost a company’s external reputation since the help and information provided to employees and retirees will be shared by them with a much wider audience - their parents, children, spouses, siblings, friends, and neighbors.
However, when communicating and educating, given the dynamics and contentious nature of Obamacare, employers must also take into consideration the political leanings of most employees and other key stakeholders, such as the board of directors and state and local leaders. This is not a factor in most employer benefit issues but the ACA is entirely different.
2. Making Tough Decisions on Coverage and Benefits:
While making tough decisions on benefits is nothing new for employers, the ACA presents a new set of decision points. Every business has their own starting point – what, if anything, they were already offering, who they were covering, and how much they were contributing financially to the cost of coverage.
For those employers that were not providing full-time workers with health coverage before, the ACA creates a new pay-or-play decision for those with more than 50 full-time workers. For every employer, the ACA creates a strong financial incentive to either drop coverage, dial-down employer contributions, or move to defined contribution.
Continue reading “What Your Employer Is Secretly Thinking As Obamacare Goes Live”
Filed Under: OP-ED, THCB, The Business of Health Care
Tagged: Employees, Employers, Health Insurance Exchanges, Kip Piper, The ACA
Sep 25, 2013