THCB

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.

Livongo’s Post Ad Banner 728*90

Categories: THCB

Tagged as:

19
Leave a Reply

9 Comment threads
10 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
9 Comment authors
Terry_FlanaganChristopher_FreyCoolhandLukegocubsgomhsamuelson Recent comment authors
newest oldest most voted
Terry_Flanagan
Member

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.

jamesepurcell
Member

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.

Christopher_Frey
Member

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”… Read more »

jamesepurcell
Member

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… Read more »

CoolhandLuke
Member
CoolhandLuke

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… Read more »

jamesepurcell
Member

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.

gocubsgo
Member
gocubsgo

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.

jamesepurcell
Member

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.

mhsamuelson
Member

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… Read more »

jamesepurcell
Member

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… Read more »

mhsamuelson
Member

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… Read more »

GAllen005
Member
GAllen005

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… Read more »

jamesepurcell
Member

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… Read more »

jamesepurcell
Member

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… Read more »

swashblogger
Member
swashblogger

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… Read more »

jamesepurcell
Member

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… Read more »

whynobodybeliev
Member

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… Read more »

jamesepurcell
Member

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

whynobodybeliev
Member

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.