The news story takes a look at the tactics and effectiveness of wellness programs at a handful of area businesses and offers insights from some of Middle Tennessee’s leading voices in the corporate wellness arena. Corporate Health Partners’ own V.P. Jeremy Curtis is quoted in the lead-in, as part of the recounting of Couer Inc.’s employee wellness program that’s now in its fifth year.

From ideas on incentives and program parameters to information about results and realistic goals, this article is a helpful reference point for businesses considering the launch of a full wellness program for employees. To read the full story, click here.

Fully insured employers (and their brokers) are often reluctant to implement wellness because their health insurance premiums are determined more or less by the claims of all the employers in the carrier’s risk pool.  That’s usually condensed into the sentence, “I’ll never see an ROI”.  Conventional wisdom is that any savings from a healthier workforce fall to the insurer’s bottom line, not the employer’s.  Therefore, it might be logical to think that it should not be employers, but insurers, that should invest in wellness to improve their profits.  However, most carriers use wellness only as a loyalty program – not for reducing healthcare costs, as covered in a recent blog post.

Most fully insured employers we have encountered do not get serious wellness programming from carriers… so what is the business case for running a program on your own dime?  Wellness WILL still help control health insurance costs, but the biggest pay-off for wellness is NOT the direct cost of health insurance… that’s just the tip of the iceberg.  Here’s the reasoning:

Direct Costs to the Health Plan

1.     Even though the smallest fully-insured employers’ premiums are based entirely on the experience of the whole risk pool, carriers watch each employer’s experience, which can be so much worse than the pool that it becomes virtually impossible to shop plans.

2.     As the number of covered employees increases, there is a point at which carriers start to increasingly adjust premiums according to each employer’s claims experience.

3.     There is a point at which the number of covered employees is sufficient for carriers to adjust premiums entirely based on the employer’s own claims experience.

4.     Some carriers are reportedly beginning to give 2-4% discounts off the nominal increase in premiums for wellness programs they feel are effective.

Indirect Costs and Other Reasons

1.     The indirect costs of poor health, such as absenteeism, workers comp, STD, LTD and presenteeism, are 3 times the direct costs of health insurance. (See figure below and study from Harvard Business Review).

2.     Wellness programs improve morale.  Happy workers are more productive.

3.     Employers need wellness for the same reason that they need benefits – to attract and retain the best employees.

4.     The smaller the firm, the health and productivity of each person become even more important.  Taken to the limit, if the sole employee in a one-person firm goes down, it’s out of business.

5.     Michael O’Donnell found that culture is the single most important determinant of the success of a wellness program, and culture is much quicker and easier to improve in smaller organizations.

What does the fully insured CEO at Haulers Insurance Company think?   Read the first paragraph.

1. It’s “free”  (I would bet the farm the costs are baked in somewhere)
2. It looks sexy
3. It’s integrated with the health plan
4. It’s reportedly “turnkey”

In reality, expecting these free wellness tools to get results is like dropping your child off at the school library (complete with computers, phones, books, etc) each fall and expecting an honor student when you pick them up the next year.  Much of the information and supplies are there, but there is no curriculum, no motivation, no regular accountability, celebration, no social support, etc.  Students need teachers.  Athletes need coaches.  I don’t recall John Wooden winning 10 championships over the phone.

Then why do they offer it?  I recently read a great blog entitled, “Ten Reasons Why Fully Insured Commercial Health Insurers Don’t Offer Worksite Wellness Programs For Their Customers”.  I probably would have called it, “Why Wellness from Most Insurers Is Only Window Dressing”.  As health insurance carriers consider how to grow their profits, there are quite a few factors that impact profits ahead of wellness.  In a webinar where Andrew Sykes, a well-known actuary, spoke about the carriers’ motivation for wellness, he assured the audience that carriers were truly serious about wellness.  They want sexy wellness tools to attract and retain their clients who are interested in wellness.  However, they really don’t care if the tools get results. After all, what’s their motivation for reducing claims?  When claims go up, their revenues and profits go up proportionately.  Their motivation for doing wellness is more likely customer loyalty – like frequent flyer programs.

Where does wellness stack up on the priority list as carriers try to boost profits?  Number FIVE.

1. More accurate underwriting

2. Better provider network with deeper discounts

3. Favorable plan designs that shift cost to employees

4. Efficient claims management

5. Wellness tools or budget

Unfortunately, many employers take the easy bait, and they loose several years of progress before they learn that wellness from carriers is only one-size-fits-all tools. It doesn’t do much to gain the trust of employees either, who are wary of carriers gaining more information about them.  Once again, there are no free lunches…

There is certainly a lot of chaos in the world of employee benefits, now that the Patient Protection and Affordable Care Act is being implemented. What’s worse, the Act is still evolving!  Besides the many provisions that have been left to various agencies to spell out, Henry Aaron recently reported in the New England Journal of Medicine that PPACA contains “64 specific authorizations to spend up to $105.6 billion and 51 general authorizations to spend ‘such sums as are necessary’ over the period between 2010 and 2019.” However, Congress must specifically appropriate these funds before they can be spent.

I have talked to a lot of benefit brokers and read a number of articles and blogs about what the PPACA chaos means to the broker community.  Responses have ranged from “There’s no future for brokers so I’m starting a new business” to the boast by one broker in a recent issue of Employee Benefit News that “My business could grow by100%”! The article suggests that this kind of growth comes at the expense of other brokers who are slow to respond and are weeded out.

An article in the October issue of American Agent and Broker shows point by point that there’s considerable upside for brokers who evolve to seize the opportunities.  One thing seems certain – the Affordable Care Act is making health insurance even more demanding and less affordable for employers.  The brokers who will come out ahead are those who can plan more strategically to control costs and take more of the load off of their clients’ HR Departments while executing those strategic plans.

I concur with Beverly Beattie’s advice in Employee Benefit News, “As pressure mounts to find optimum value and affordability in an organization’s program, coupled with uncertain residual effects of reform, we believe a well thought out benefit strategic plan will include the intelligent integration of technology, education, communication, utilization management and promotion of health and wellness.”

Talk with your broker to determine if your health insurance carrier will offer a special tobacco policy/rate (usually a higher premium for tobacco users).

Conduct a worksite assessment to see how many tobacco users are at work.  Become knowledgeable on tobacco use in its relation to loss of productivity, extra costs in medical expenses, more lost days of work, increase in injuries, and slower recovery.  Use this knowledge to gain support of others you need to join your cause.  Offer tobacco cessation programs and coaching to current users.
Have your worksite wellness team join your charge!  Don’t have one?   Ask me how I can help!
The latest tobacco related news is that on June 21, 2010, the law takes effect that packaging of tobacco products, “Under the FDA’s new regulation, tobacco manufacturers may no longer use words like “light” “low” or “mild” to describe their products”.  Many packs of cigarettes are now color coded instead, and they are not allowed to have self-serve style displays, all cigarettes must be sold “behind the counter”.  These new laws are directed at young consumers.   Will senate bill 55, now law…do much to deter young consumers from smoking?
We will be posting updates in the coming weeks and months on our progress at a larger company that is just now embarking on becoming smoke free.  The background:  The company has implemented health risk assessments and have a significant number of tobacco users.  They have developed a team and contacted their broker.  They have just conducted open enrollment, communicating that tobacco users will receive a higher fee on their health insurance beginning in October.  Health coaching and smoking cessation program communication is being promoted HEAVILY in July, and will begin in August.
If you don’t know already, Great American Smoke Out! Is scheduled for November 19, 2010.  This day will be a smoke free day!  Get materials and information for your worksite by clicking  here.

Corporate Health Partners’ CEO Jack Curtis was recently interviewed by the Health Enhancement Research Organization (HERO) as a member of the association’s Think Tank, for the association’s Industry Leadership Spotlight.

As a member of the HERO Think Tank, Jack gives voice to key initiatives and principles relevant to the employee health management industry.  With his vast experience in creating measurable employee wellness programs and his active participation in organizations like HERO, Jack helps guide thought and policy on industry issues.

To follow is the transcript of the HERO interview.

Q: How did you begin in the EHM field?

“In 2001, I left a job as General Manager of a Berkshire Hathaway business that made powered
equipment and became President and COO of LIFESIGNS, a multi-site corporation that
does affordable, comprehensive physicals in a spa-like setting. Though LIFESIGNS exams were
terrific, I learned that from an employer’s perspective, we needed to spend less on finding the
unknown problems and more on fixing the known problems – the poor lifestyle choices that
drive the vast majority of healthcare costs. With that conviction, and a firm belief that demand
for wellness would grow as the need became more obvious, I founded Corporate Health Partners.”

Q: What was the motivating factor behind your move from GM of the equipment manufacturer to President and COO of LIFESIGNS?

“I would like to say it was a larger vision I had to change the direction of my career, but the
fact is that Berkshire Hathaway was downsizing and my position was going away. By networking with my industry contacts, I found the LIFESIGNS position. What made me a good fit for that job was my process and quality management background. The concepts of continuous quality improvement, based on building teamwork and a culture of quality, are perfectly suited to the health management field.”

Q: What are some key milestones you have achieved?

* “Founding Corporate Health Partners in 2002”
* “Adding my son to the team in 2005”
* “Leading the HERO Think Tank subcommittee that organized the HERO Association for
Employee Health Management in 2009”
* “Retooling our business model to focus on culture in 2008”
* “Being asked to lead the Innovation Committee of the HERO Think Tank in 2010”

Q: Can you tell me about a few of the areas that the Innovation Committee will focus on in 2010?

“I think the other HERO committees that deal with research, the HERO scorecard, education
and the Koop Award are essentially “looking back” to find and disseminate about processes
that have proven to be best practices. I think they will naturally deal more with operational
best practices in EHM as they investigate the Koop Award winners, scorecard, HERO research
and the stories that make good Forum presentations.”
“I think the Innovation Committee needs to primarily deal with more strategic concerns, by
“looking forward” to fulfill HERO’s role as a luminary. I think we need to develop an annual
process for looking forward and seeing where the industry needs to go. We’ll need to answer
questions like: given what we learned, what should be tried next, what promising innovations
surfaced, how can HERO help test the new innovations and how do we see innovations changing the industry over the next 3-5 years?”

Q: What is your best recommendation to peers?

“Keep the faith. Our industry is on the verge of turning around our unhealthy nation and making it a healthier, happier and more productive place to live.”

Q: What is biggest lesson learned?

“That’s a hard question, because there have been so many lessons I had to learn. I think the
biggest lesson should have been a lot more obvious, but it’s the fact that facilitating lasting lifestyle improvements requires culture change. Likewise, culture change requires not just management support, but motivational leadership. Without engaging top management, we’re usually wasting our own resources, as well as the clients.”
“Wellness programs are largely born from the need to control cost. The function of managing
them is often delegated to HR/benefits staff with limited input and buy-in from the leaders
of the organization. If this practice continues, our industry is in trouble. Wellness must move
from a feature of a benefit package to a core philosophy of the company. To be successful, we
need people at the C-suite who believe in it and really get it.”

Q: What would you still like to personally accomplish?

“This may sound a bit audacious, but I want to grow a business that is so engaging and effective
that we can essentially choose from the cream of the crop of employers who want to
work with us each year. As I look at the future of CHP, we may never become one of the big
players in the industry. And that’s fine with me. There’s a lot of demand for wellness so we
will pick and choose who we work with. Life is too short to work with clients where we’re
not a good fit and the senior leadership is not engaged.”

Q: What is your goal for the EHM industry?

“To help employers realize that employees are truly their most fundamental asset and that
EHM is the most fundamental strategy for growing a strong corporation.”

Q: Can you give me some specific examples of how we can do this?

“I think this is essentially the mission of HERO. We have to shift the focus from minimizing
healthcare costs to maximizing human performance. Fortunately, there are great companies
who already believe this, and they have successfully employed EHM to reap the benefits.
HERO is committed to learning what works from these companies and telling their stories in a
way that engage other senior leaders to get on board. So, bottom line, our best bet to realize
my goal is to do my best to support HERO’s mission.”

Q: What are the major trends that will affect the EHM industry?

* “Demand for EHM will increase dramatically, driven by long term needs for healthcare cost
control and productivity improvement.”
* “Programs will become more comprehensive, forcing vendor integration and data analytics
to the forefront.”
* “The application of quality management practices to EHM will dramatically improve program
effectiveness and efficiency.”
* “The development of means to facilitate social and cultural change in the workplace will
dramatically increase engagement of employees and dependents.”

Q: How do you think those trends will affect employers, employees and the industry?

“More employers will implement comprehensive programs, as the need and the evidence become more compelling.”
“More employees will get engaged as integration, quality and connectivity improve.
The industry will grow in size and stature, in proportion to dramatic gains in productivity.”

Q: How do you see employee engagement strategies growing and/or changing in the next two years?

“Identifying and addressing upstream issues that keep wellness off of employees’ priority lists.”
“In the virtual world, the role of social networking tools and their impact will continue to
grow as these tools mature. Using more team-based competitions and group interventions will
engage more as we increasingly address social needs.”
“While web-based technologies are an important and growing modality in creating employee
engagement, there’s still no replacement for that face-to-face interaction to motivate change
and increase the overall connectivity. My experience has been that face-to-face interaction
may be the only way you can engage with those individuals who are the hardest to motivate
and the ones in greatest need of an intervention.”

Q: How has the proliferation of brokers and consultants playing the role of wellness expert impacted our industry?

“While some of these individuals have a background in wellness and understand the industry, there is a lot of noise in health insurance about wellness. For many of these brokers, their motivation is selling health insurance, so achieving results and creating a culture of health is not their primary goal. I am worried that this will have a negative impact the credibility of the EHM field.”