Wellness 2.0:  Better Health, Better Coverage

Screen Shot 2015-10-13 at 4.26.03 PMJust what on earth are businesses thinking?  Companies pay too much for poor quality health care coverage. If this were any other business expense, this wouldn’t be tolerated. Yet, expensive, sub-standard healthcare is something U.S. companies roll over and accept.  There are many reasons why, all unacceptable.

Fortunately, there’s a path that companies can take now to address healthcare costs: fostering healthier employee lifestyles.  This is perhaps the only avenue for immediate action that can lower healthcare costs for both employers and employees while cultivating a healthier, more productive workforce.  Your cynical side laughs?  Consider this:

“Only private business, not the federal government, can solve America’s epidemic of obesity, chronic disease, and runaway healthcare costs by investing in the health and fitness of their employees,” said Cleveland Clinic CEO Toby Cosgrove in an Affordable Care Act debate panel, a sentiment increasingly echoed inside and outside of healthcare.

Employers must move away from the adversarial, zero sum approach of increasing employees’ share of the cost of coverage to a more partnership-centered model of forging employer/workforce partnerships where both companies and employees support each other’s goals, not just in lowering coverage costs, but by improving health.  

Increasing coverage in this day and age? Unheard of! But this is not a pipe dream. If companies are willing to make the investment, on the condition that employees undertake required behavior modifications and achieve positive outcomes, it truly can happen. And though may have heard this before, up to now we’ve not done it right.

Re-Imagining Workplace Wellness

Workplace Wellness programs were designed to encourage employees (and, sometimes, their families) to adopt behaviors that reduced health risks, improve the quality of life, and benefit the organization’s bottom line. Although popular and while there were exceptions, research shows that most wellness programs didn’t work.

This approach, which I’ll call Wellness 1.0, hasn’t worked, in part, because wellness programs wimped out and avoided mandating results-based outcomes in favor of rewarding ‘reasonable efforts’ to lose weight or quit smoking. Employees may be happy to receive gym memberships or enjoy nutritional foods in the company cafeteria, but this does not equate to following professionally designed wellness plans or making needed lifestyle changes.  

Moreover, according to a recent Harvard Business Review article, “What’s the Hard Return on Employee Wellness Programs?,” wellness programs must move beyond diet and exercise toward a more fundamental (don’t you hate the word “holistic”?) approach that addresses often overlooked health factors such as depression, stress, and financial and family issues that contribute to employee wellness and premium costs.

This requires a total program approach with strong data analytics, focused communications, and strong incentives that encourage employees to make quantifiable health and lifestyle changes. Because employers cannot be privy to needed confidential healthcare information, a third party must use such data to intervene and obtain outcomes.

Incentivizing Outcomes

Just showing up cannot enough. Employees and their families must agree to participate in wellness programs, commit to achieving outcomes as fully as possible, and make needed lifestyle changes. This is the way to challenge today’s healthcare spending spree (and divisive negotiations) by helping employees take better care of themselves.

Wellness programs must be designed to make non-compliance (a taboo subject, up to now) an undesirable state. Under proposed federal regulations, wellness program incentives can institute rewards or penalties of no more than 30% of the cost of health insurance for a single worker (up to $1,800), a not inconsiderable sum.  

Companies must put significant skin in the game. In exchange for employees assuming more personal responsibility, and participating in aggressive wellness programs, employers might promise to maintain existing coverage (no further increases in copays, deductibles, or employee shares) for 3-5 years to give the program a chance to work.

By stabilizing and perhaps even reducing employee out of pocket healthcare costs over time, management can earn a moral and financial high ground to attract and retain the best employees and bolster future labor negotiations. These types of strong, outcome-based programs have been shown to reduce coverage costs and improve employee health, productivity, morale and retention and can dramatically lower company health costs.

Johnson & Johnson’s Health and Wellness Solutions  takes a comprehensive approach that focuses on employees’ “social, mental, and physical health.” To date, the program has achieved measurable results: according to the company, 58 percent of participants in a stress management program saw improvement in six months; 42 percent of employees in a smoking-cessation program quit within six months; and 55 percent of those in a weight-loss program had success.

According to J&J, its comprehensive investment in employee wellness delivered $250 million in savings over a single decade; the return was $2.71 for every dollar spent. “Our focus on health and wellness among our U.S. workforce has helped reduce per-capita health-plan costs by $400 per employee per year … and significantly improved overall employee health and productivity.”

Similar results were achieved at Houston-based MD Anderson Cancer Center, an 18,000 employee hospital with the mission “to eliminate cancer in Texas, the nation, and the world.” The organization fosters a total wellness culture, relying on internal staff to teach, facilitate support groups, and coach.   

“We work to set up a wellness culture within each department,” said Bill Baun, manager of Employee Wellness Programs. “Departmental leadership accepts responsibility for their staff members’ wellness and we encourage the whole team to acquire the same knowledge, skills, and commitment. Everybody makes changes together.” Within six years, lost work days fell by 80% and workers’ compensation insurance premiums declined by 50%.   

Making the Case, Winning Support

So how do we make the case for a paradigm shift in the fundamental healthcare relationship between employer and employee?  How do we persuade employees to do something that they should have done but have not? In short, both employers and employees will have to give to get.

It starts by creating a new Employer/Employee Compact on Health.  

The strongest determinant of success (besides good design) is passionate, persistent, and persuasive leadership by the CEO.  Workplace health has to become personal to CEOs who must lead by example.  It must be part of virtually every CEO speech to employees.  Companies must create a team atmosphere that makes participation desirable.  

Workplace health has to become personal to CEOs who must lead by example.  It must be part of virtually every CEO speech to employees.  Companies must create a team atmosphere that makes participation desirable.   Believe me, I know.

CEOs send the message that workplace health is worthy of employees’ attention by presenting and leading the program, and not delegating to HR Departments (that lack authority to affect major changes and usually maintain the status quo) or insurance brokers (who usually lack access to the C-suite, which limits their ability to make significant change).  

There will be widespread skepticism. The idea that companies can attack spiraling health costs may sound naive or unrealistic. Indeed, many CEOs focus on the short-term and feel they’ve already given too much. And the prospect of a company-led initiative requiring employees to change lifestyles might seem politically incorrect or invasive. But, do we have a better option?  

Employees are truly baffled by what’s happened to their coverage. CEOs must show them where the money is going and what must be done to change that and reduce employee premium shares and deductibles. CEOs must be brutally honest. Absent significant employee lifestyle changes, coverage costs to the company and to employees will only increase with no end in sight. Even true healthcare delivery reform won’t change that.

Walking down this road requires a mindset largely missing in today’s corporate America. This is not just “short-term,” although short-term wins are achievable.  This cannot be about denying needed care. Just the opposite. And if properly approached, it will help employees become quantifiably healthier and more productive. Best of all, it provides an opportunity to preserve, and even enhance, existing coverage over time.

I challenge cynics to offer a better alternative. Why is Toby Cosgrove wrong?  Can you deny that the single biggest driver of our out of control healthcare costs is the failure of America to live healthier lifestyles?  Can suggest a better place to start than the work site? If you agree, I welcome your ideas about design and execution to make Wellness 2.0 a reality.

Jim Purcell is the former CEO of Blue Cross & Blue Shield of RI. He now helps large employers cultivate workplace wellness strategies that reduce premiums and increase productivity. Learn more at jamesepurcell.com.

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19 replies »

  1. Hi Terry,

    Thanks for the comment. I’ve come to sense a huge ennui regarding wellness. I guess that’s understandable in the workforce environment where it’s all about bottom line. But this IS about bottom line. Makes me crazy. The truisms are we’ve not done the job well, but we surely can.

  2. Jim, I agree with your thoughts that the focus should be on behaviors that drive the outcomes. Incent the behaviors and measure the outcomes. Franklin Covey talk about this in “4 Disciplines of Execution”….Act on the lead indicators and measure the outcomes to see results.

  3. Christopher: Good point. I have several more articles in this series and I make much more emphasis on the emotional side of things. Wellness is so much more than swim, gym, weights, and nutrition. Stress and depression are killers and account for so much suffering, unproductivity, and with their co-morbidities, claims expense. Personally I’ve never trusted people you do not take their vacation. There are good security reasons why people in finance MUST take two straight weeks. In healthcare, we truly do not give mental health, behavioral health, and the emotional side of the equation enough attantion. Thanks for the comment.

  4. I’m always intrigued by these macro-discussions of employee health care that never once include the word “vacation.” With the continuing trend in the US toward taking less time off and no serious effort by companies to require employees to reduce their stress by simply taking vacation I have to question the commitment to the improvement of workers’ health. “10 pounds off your belly will surely improve your profile at the beach this summer on your VACATION.” might help motivate people in weight loss programs far better than a mention in the newsletter. Let’s start thinking of the power of “motivacation” as opposed to having workers feel they’ll be perceived as less committed if they actually take their vacations.

  5. Got your point. I guess this all comes back to leadership. You know, leadership is an elusive but fundamental point. If you have a CEO who really leads this issue, it can work. I hope so anyway.

  6. Hi Cubs…and I feel for your team. Your point is a good one. There are ways if the project is led right that it is not about big brother. But damn, we have to do something here. This is all about changing behavior, not because it’s being demanded, but because it’s what we all knew what should have done in the first place. This is so fundamentally correct that it hurts me.

  7. I think that you make a great argument with listing the multiple benefits for a clear cut wellness2.0 program…however, it must be very clear cut. Another blogger commented on the fact that Americans have become quite accustom to “their work place culture”. I think this is a good point. Many people are not fond of change, and when it may impose on their current lifestyle, I think it becomes even more difficult. It would be very interesting to hear what employees and employers would come up with if they held focus groups at various agencies and organizations to find out what their concerns would be, and furthermore, give them a say in what those changes might be. I think that if people could see all of the long term benefits to health and wellness, as well as the financial savings that both employee and employer could experience, then you would give both sides reason to be more invested in such a change.

  8. While your point is interesting, I wonder how many health care employers would be willing to engage a third party to administer an improved wellness plan. I work for an organization that is made up of hospitals which offers employee perks if you lose weight or quit smoking . . . however they also strongly encourage (re: force your hand) to use their facilities and their doctors and administers their own health insurance. It can feel a little bit like Big Brother is watching.

  9. Oh, the CEO and the Board. Let me see:

    “We’ve gotten so cynical today that it blinds us to some common sense realities. Yes, you have quarterly dividend demands, and the short term seems overwhelming. But you are responsible for companies that must endure over time, so the long term matters as well. What is your single most important resource? Unless it is patents, it’s usually the workforce, whether you call them employees or associates. These days, they are not feeling the love. They feel commoditized. You and they have a common problem. Yours it that your health coverage is hideously expensive and with little value. Theirs is that they not only are paying more and more out of pocket for less and less coverage, but also they live with the fear of losing coverage for their families. This is VERY real. Just imagine with me: What if you, CEO and you Board Chair, addressed the employees with my concept? At first, their reaction would be (yes) disbelief and distrust. But if you then prove to them you really mean it, and truly care about their and their families’ health, not just for productivity sake but for their sake, and it slowly sinks in, what do you think the reaction will be? AND if over time you demonstrably improve health and reduce costs, and share that with the employees, what then will be their reaction? Do you have any idea how important healthcare coverage is to a $50k/year employee? Ask one. This is so radically obvious that it hurts my teeth.”

    How ’bout that?

  10. Michael…thank you for your two thoughtful comments. We can and will be accused of being unrealistically idealistic, but my point is that we are definitely not. This is about leadership with a capital L. Not VP of HR land. It’s about the CEO hunkering down with her labor force and saying very plainly, I have a long term vision for our company and us as those who work here. Hear me and work with me. We can do much together. And what can be wrong with something that is designed to: (1) improve our health and wellbeing; (2) maintain coverage and enhance it over time; and (3) enable all of us to be better consumers of healthcare? I hate the term win-win, but this is it if I ever say it.

    Thanks Michael, and your work is impressive.

  11. Spot on comments. That is why I (as a recovering CEO) appeal to the CEOs to make this their driving force issue. That sounds idealistic, but I think it serves profit and productivity (too). I’m hoping to convince CEOs to change their stripes just a little bit, make employees their focus, and (by the way) save some money. One thing I learned as a CEO was that if you’re driven enough by an issue, it does become a company-wide issue. At my company, it was ethics, and it truly worked. Employee health and wellbeing (and their families) are almost as snow white as ethics.

    Thank you for your comments.

  12. One more thing…

    Keep in mind, we are not rational beings who emote; we are emotional beings with the capacity to think rationally. Big difference. Emotion trumps reason. Absent primordial prevention, sickness trumps wellness and survival trumps thrival.

    You are correct, Jim. It’s time for a new social health contract.

    Let’s be very clear, society (government, healthcare providers, employers) must take the lead role when it comes to responsibility and accountability. This is a partnership, a social contract whereby—we, the people—voluntarily relinquish the freedom of action we have under the natural state (a state of existence that is not contingent upon man-made laws or beliefs) in order to obtain the benefits provided by the formation of social structures. Building on the philosophy of John Locke, who said, “…no one ought to harm another in his life, health, liberty, or possessions.” Thomas Jefferson et al, framed government responsibility under the umbrella of securing inalienable—natural—rights including “life, liberty and the pursuit of happiness.” By obeying man-made laws and complying with accepted standards and mores, we implicitly agree to our part of the social contract. In turn, we have the legal, moral and ethical ground to demand that the custodians and protectors of our natural rights—our elected officials, medical providers and employers—be held accountable. This speaks directly to the issue of healthcare access and affordability.

    In its simplest form, our implied social health contract requires that society provide:

    Awareness of the consequence and benefits of lifestyle choices
    Education needed to initiate and sustain healthy living
    Access to affordable primary, secondary, and tertiary healthcare
    Evidence-based medicine and prevention measures
    Supportive infrastructure (parks, healthy worksites, recreation, green, etc.)

    And, when provided with all of the above, individuals representing themselves and their minor dependents are responsible for:

    Making healthy choices
    Self-exams (paying attention to changes in personal health)
    Keeping up with recommended age and gender clinical screenings
    Seeking timely and appropriate medical attention
    Complying with evidence-based recommendations and directives involving lifestyle habits, medications, lab work and rehabilitation protocols

    Evaluate your contribution to this social health contract. Are we, as a society, providing awareness, education, full access to treatment, evidence-based medicine and prevention and a supportive culture for ALL of our citizens? If not, why not? And, as an individual, are you keeping up your end of the bargain? If not, why not?

  13. First, can we all agree that the ULTIMATE goal is to have a good life—healthy happiness, including freedom from physical, psychological, and emotional pain—for all residents of this universe, a perpetual stretch goal for the advancement of all sentient beings? Okay? Yes? Good. For now, however, let’s consider the slightly less lofty and decidedly more immediate issue of personal aims and aspirations.

    When listing or even thinking about everyday goals (goals are broad and general, i.e., lose weight) and objectives (objectives are narrow and specific, i.e., lose 10 pounds in 10 weeks) make sure that you focus on fertile personal benefits and not sterile metric features. For example, weight-loss without context and texture — stuff that shakes your bones and lifts your spirit — is simply a feature, a measurement, a physical, psychological, and/or emotional state of being. Lose ten pounds in ten weeks? Okay, sure, but so what? What will that bring me? What’s the benefit? How will it shake my bones and lift my spirit? The quick answers are:

    “It will bring you nothing.”
    “There is no benefit.”
    “It won’t shake your bones or lift your spirit.”

    Unless…unless, and until, the activity is put into personal context and enhances the texture of your life. The emphasis, by the way, is on YOUR life. If your goals are selected and declared in order to please mom, dad, boss, spouse, partner, or Oprah, and not triggered and fed by personal passion, they will starve and die quickly and, often, painfully. But you already know that.

    Sticking with the example of the bathroom scale, the goal is not weight loss. Shedding unhealthy or — self-ascribed — unattractive pounds is a vehicle used to get you somewhere. The goal, the destination, is subjective well-being, HAPPINESS according to you. And, for most people, that includes things like:

    physical comfort
    emotional contentment
    mobility and travel with ease
    ability to pursue active hobbies
    liking what YOU see in the mirror
    fun with kids, grandchildren, friends, and neighbors
    improved job opportunities
    expanded social relationships and engagements

    So, If your goals are not shaking your bones and lifting your spirit, you are either pursuing goals assigned by others, or, perhaps, you are missing the point. It isn’t what the scale reads, the calories you count, the days marked off the calendar since your last drink, the packs of cigarettes you didn’t buy, or the number of miles you ran last week. It’s about healthy joy and fulfillment. It’s about the dash that separates the year of your birth from the year of your death, It’s about the quality of thriving, not the metrics of surviving.

  14. I agree with your article, but fear it may be too idealistic for today’s corporate culture. It is tough to get anyone to see the forest for the trees these days. It would take something major to overcome the inertia and prevalent stubbornness of both companies and their employees. I thought your data on J&J was striking: “its comprehensive investment in employee wellness delivered $250 million in savings over a single decade; the return was $2.71 for every dollar spent.” This does, however, mean a staggering investment of 92.25 million dollars. Even if this was spread out over time, it would be tough to convince a company’s board to undertake this type of financial commitment. Especially since this issue is something that no-one (company or employee) wants to take responsibility for.

    If you got five minutes with a CEO or company’s Board, what would you say to them to plant the seed and start turning this inertia into momentum? I would have to think it would need to be something shocking.

  15. Not a bad idea, although conditions about weight get tricky with discrimination laws. But the idea up front that this is an important cultural matter at the company is good. Actually it’s part of what I call the employer/employee compact, where the CEO herself gets out front and says that this is very important. The compact goes way beyond that, however, in that the company promises to hold firm with coverage no matter what for 3-5 years while the program takes hold. The employees “promise” to change lifestyles and behavior. So it does do, in concept, what you suggest. In terms of knowledge, we all know what we should do on one level or another. It’s in the doing. Thanks for the comment.

  16. Judging from the number of overweight, smokers I meet who are healthcare workers, I do not believe lack of information/knowledge is at the core of the behaviors.
    Depending on the laws of the land and those of fairness, how about requiring all new hires to sign a contract that they will meet certain standards of weight, gym visits, all recommended well health check ups etc as a condition of employment. It’s always easier to start with clear cut expectations as part of a company culture, and like all big changes, they gain momentum by attrition. Also, from what I know of human nature, many of those “grandfathered” out of the requirements will end up bandwagoneers – first those who were on the precipice of change and slowly, those more recalcitrant. I think using group psychology could be more effective (and less contentious) than imposing monetary penalties or other punishments (which is how they are viewed). I do think it’s necessary for all employees to pay in some amount toward their coverage to appreciate and use it fully. But over time, billing your employees for their benefits will just encourage hopelessness.

  17. Certainly more with than against. You’ve identified the problem well. not sure about the solution, though. You are certainly right (IMHO) in theory but in practice has been very thorny. We can go off line and discuss.

  18. WhyNoBodyBeliev: Point taken that the Harvard article is five years old. Not irrelevant though, and it validates that wellness is far more than swim, gym, and healthy food. I’m not sure what your company does or offers (I’ll look tomorrow morning), but if it’s as good as you seem to say, you’ve validated my thesis that: (1) today’s efforts are largely ineffective; and (2) we have to do something. My other central point is that it’s about leadership making the difference. I think you’re more with me than agin me. Thanks for the comment

  19. hmm…where to start? Well, first, that “recent” article in Harvard Business Review is 5 years old. As luck would have it, my article in that very same Harvard Business Review is coming out this week saying exactly the opposite. And perhaps he has missed our proof that it is mathematically impossible to save money in wellness, backed by our million-dollar reward that I invite Mr. Purcell to claim. Or perhaps he missed our article in American Journal of Managed Care — likely to be #1 for the year in that journal — that all the laudable (albeit highly unpopular) things Mr. Purcell would like to accomplish in the workplace simply have literally never happened. It’s not enough to cite a company’s self-reported data. I have shown that 5 Koop Award winning companies in a row have literally fabricated their self-reported data. I simply have never seen the J&J data. It is worth noting that both companies cited here–J&J and the Cleveland Clinic — also SELL wellness programs.

    All of this stuff is on our website http://www.theysaidwhat.net .

    Oh, and in terms of “offering a better alternative,” how about our company http://www.Quizzify.com ? We offer 100% guaranteed savings, much lower prices, and a guarantee of 10 points higher engagement than “pry, poke, prod and punish” programs — all validated by the Intel-GE Validation Institute. Perhaps you are aware of a wellness company that has any of those three things, let alone all three?