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.

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.

While matters of healthcare may not be that simplistic, it’s certainly true that prevention of illness is much simpler (and less expensive) than treatment of illness.  Health problems come with heavy tolls, from loss of wages, productivity and quality of life to high costs of care in a system already overburdened.  That’s why corporate wellness programs are excellent investments for companies.  Why not focus on keeping people well rather than treating and medicating them after they’re already sick?

In the Three Stages of Prevention, we see the progression of disease, as well as the tools of intervention that aid in response and can help lead to positive results.  Statistics show that the costs involved with Stage One, disease avoidance, are measurably less than with Stage Two, early detection, or Stage Three, established disease.  By the time disease has taken hold, there is often the need for ongoing medication, doctors’ visits, case management and other health support.  In contrast, disease prevention involves only health assessments, lifestyle coaching, exercise and education.

For employers looking to offer value above and beyond existing benefit packages for employees, contain overall healthcare costs and maximize workforce productivity, corporate wellness programs are the right solution.  Third party wellness management incorporates a culture of wellness into the corporate root system and teaches employees to live healthier and avoid disease.  Additionally, it builds in mechanisms to catch health issues through early detection and stave off problematic health issues early in the stages of prevention.