Company Wellness Programs

Medical research has long shown quitting tobacco use at any age can improve a person’s health.

But a Duke Univ. shows that the group you could think would be the least likely to quit - individuals  over the age of 50 - may actually have the best odds for quitting through a tobacco use cessation program.

Scientists tracked 573 older patients over 10 years. They found that just 16% of those who joined the tobacco use cessation program later returned to tobacco use.  Meanwhile, previous research has found young smokers who attempt to quit have a 35% to 45% relapse rate within two years.

Bottom line -   Given the aging employee population and the cost of retiree health care, you could want to keep trying with use of tobacco cessation education for your older workers.

The corporations with the most cost-efficient heath plans are the ones that streamline the services staff members receive for both their physical and mental health.

As a long-term goal, having your general health plan, worker assistance program (EAP) and wellness program communicating regularly with one another about employees’ treatments is the single best way to reduce redundant or contradictory treatments, eliminate unnecessary claims and increase the quality of the plans for which you pay.

Let’s look at the relationship between your health promotion program and your EAP to illustrate the importance of attacking medical costs cross a wide front.

You can start a health promotion program with a health risk assessment and then, when appropriate, roll out a smoking cessation program or a weight reduction program.

But ultimately you want to be sure that your wellness provider works in conjunction with your employee assistance program (EAP) provider.

Here is why -  It’s very common for an staff member to contact the employee assistance program because the individuals feels depressed about his or her weight. What you want is for the employee assistance program provider to treat the employee’s depression and behavioral issues, plus you want the employee assistance program to refer the staff member to the health promotion program to deal with the root cause of the problem - obesity.

The same thing goes with the relationship your wellness program and your workers’ comp vendor, STD and LTD vendors, rehab people , and/or illness managers. You want all them talking to - and sharing data with - each other. If they’re not, it’s costing you money.

In general, the corporations who achieve the greatest cost savings through their wellness programs are the ones who overlap wellness with behavioral and occupational health issues.

Attempting to do more with less money? Here are three proven ways to align the dollars and cents of a wellness program in your budget.

Common thread -  the way you prepare â.” and control â.” your budget for a wellness program is crucial to its success.

1. Top-down health promotion budget

Depending on the size of your business and wellness program, you may have full budget responsibility or may need to work with a C-level who has budgeting expertise.

Regardless of the arrangement, you’re likely to face one of two distinct challenges -  a top-down budget or a zero-based budget.

A top-down budget is when you’re given a finite dollar amount and told to run the wellness program within the limit. If that’s the case, here are three crucial questions to ask -

o  Does this limit include money set aside for worker incentives and future initiatives?

o  Should we keep long-tenured health promotion programs that keep going up in price, and

o  Does Benefits/HR have to deliver all education about the health promotion program, or is there extra funding to hire staff?

2.  Zero-based health promotion budgeting

In zero-based funding, you submit to upper-level management an itemized list of the wellness programs/features you want and the cost of each. Best practices -

o  Rank health promotion programs by priority (health-risk assessments should be at or near the top)

o  Indicate which expenditures are fixed and which are variable, and

o  List ways to incorporate existing resources (like an employee assistance program (EAP) program) for a better return on investment.

3. Estimating wellness ROI

On average, health promotion programs generally take at least 18 months to break even. After three years, you ought to see savings.

When not, it’s time to take a fresh look at the wellness program design.

Given the immense growth of wellness programs over the last two years, it was inevitable resistance would creep up among watchdog groups.

In Washington, lobbyists have spearheaded a push for Congress, the DOL and IRS to crack down on “punitive” wellness programs.

Specifically, the groups seek to limit wellness programs in which employees’ share of their healthcare costs are directly tied to their willingness to take part in a wellness program.

HIPAA’s non-discrimination rules prohibit companys from building negative financial incentives for staff with health risks.

For  instance, you can’t raise someone’s premium share because he or she smokes. What you are able to do is offer a discount when someone completes a smoking cessation program.

Reason -  the law does allow for financial incentives to employees who willingly participate in wellness programs.

The watchdog groups seek greater regulation to make sure incentives and discounts are used only as rewards for healthy behavior, not as a thinly veiled form of discrimination against high-risk workforce.

A recent survey finds nearly 42 percent of companys with 200 or fewer workers have some sort of disease management program.

That’s a gigantic increase from four years ago, when just 28% of smaller employers offered such health promotion programs.

There’s more to come, too. Fifteen percent of respondents that didn’t currently have a disease management component to their medical plan hope to add one by 2011.

The highest-demand disease management (DM) programs are for diabetes, asthma and heart illness.

Source -  Small Business Benefits Survey, PDR Consulting Group, 9/1/2008.

Thinking about an obesity-related disease management program for your corporation? Here is what you need to know.

In order to be effective, the health promotion program must meet participants’ individual medical and psychological needs, not to mention your own organization’s need to control long-term healthcare costs.

Exactly how wide-reaching should the program be? After all, it does not make sense to pay for services your workers don’t want or can’t use.

Mary Beth Chalk of Resources for Living suggests that obesity programs can be broken down into four tiers of staff member need, from which your organization’s Return On Investment (ROI) can also be measured.

Tier 1 -  Education

Tier I workers struggle with weight management problems but don’t need a health Coach.  Instead, they may benefit from a self-directed program that provides weight-management related materials online, targeted mailing, and/or access to nurse call line.

How to measure Return On Investment -  utilization. Do employees click on the Web site? Do they return to the site regularly? Do people  use the nurse line? Your health promotion program vendor ought to provide you detailed use stats.

Tier 2 -  Clinical supervision

When the staff member has been diagnosed as obese â.” a BMI  score over 30 is obese, over 35 is clinically obese â.” he or she’d do better working with a health coach in a clinically supervised health promotion program.

Three keys to getting maximum results -

1. Periodically have participants rate their relationship with their wellness Coaches. Not everybody clicks, so a change may  be in order.

2. Coordinate your disease management care with your worker assistance program (EAP)services. Reason -  Inability to control weight is often closely tied with psychological health issues â.” and one can adversely affect the other.

The more closely your employee assistance program and obesity program managers work together, the higher the chance for success.

3. Beware of the fade-out effect. Many workers in weight-loss programs get off to a great begin and then fall back into old habits. People  should re-commit to the program after three sessions, four months and nine months.

To measure Return On Investment (ROI), look at utlization, goal achievement and reduced presenteeism. of course, presenteeism is notoriously challenging to measure with reliable dollar figures. So how can you overcome that problem?

o  Start with employees’ salaries. Let’s suppose one participant earns $40,000 annually.

o  Ask employees to self-report how energetic and productive they feel on the job, on a percentage scale. Then have supervisors estimate the employee’s productivity and split the difference. for this example, let’s assume it averaged to 50%.

o  Collect scores again six months and one year into the program and then multiply the difference by salary.  The result is your estimated productivity Return On Investment.

In the example above, when the worker earning $40,000 improves from 50% to 75% after one year, the productivity related ROI is $10,000.

Tier 3 -  Medical management

At this level, the obese worker needs a higher level of care than a wellness coach can offer.  The worker has chronic health conditions related to obesity â.” like diabetes, high blood pressure, and/or sleep apnea â.” and needs a doctor case manager.

Namely, the staff member needs to set up regular visits with the doctor and create a treatment plan.

To measure ROI, begin with the lower-tier criteria, then track quarterly and year differences in FMLA or compensated absences, and prescription drug costs. Then compare it to the per-participant cost of the obesity program.

Tier 4 -  Morbid obesity

At this level, the employee has been diagnosed as morbidly obese â.” BMI over 40 â.” and is considered a potential candidate for gastric bypass surgery.

Return On Investment (ROI) is measured through ongoing health claims in addition to the previous criteria.

Create a culture of wellness within your business

Create Exemplary Management Support

In the most successful Health Promotion Programs, upper-level managers lead their companies by example.  And they work to ensure that the executive management structure not only allows, but actively encourages their workers to participate.

Organize a Health Promotion Advisory Team

Wellness committees serve as the eyes, ears, arms and legs of the wellness program, representing coworkers ideas and concerns, and assisting reshape the organizational culture toward health.

Conduct an Assessment of Financial and Human Assets and Liabilities

Successful Health Promotion Programs are built upon a foundation of information, including claims review, demographic analysis of the workforce, senior management and employee surveys, health risk data, history of organizational wellness, and health benefit plan design.

Develop Clearly Reported Vision, Mission and Outcomes

Establish a clear vision of health promotion program direction, expectations and measures to answer the questions, “Where are we going and how will we know when we get there?”

Create a Extensive and Strategic Wellness Program

A multi-component plan should consist of strategically developed and implemented awareness, lifestyle change, and supportive environment programs, in addition to policies and activities that target appropriate health risk behaviors and needs of the staff.

Identify an Incentive and Reward Strategy

Incentives show the organizational commitment to the wellness program and motivate individuals to participate. Incentives vary commonly from program to program, but can include such things as time off, reduction in medical insurance premiums or co-pays, cash incentives, discounts to fitness clubs, free pedometers, etc.

Communicate to Employees

Your health promotion program should be simple and concise, use an identifiable brand, and rely on a selection of media to communicate with workforce and managers.

Evaluate Outcomes

Evaluate wellness program participation, satisfaction levels and behavioral change. You may want to track the number of workers’ compensation claims, productivity, turnover morale and absenteeism.

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Health Promotion Program - Management Support.

Develop Exemplary Management Support

Goal -  A Health Promotion Program established into the organization’s culture.

Focus - Develop support and excitement for the wellness program from all levels of the corporation -  upper management, mid-level management, and grass-roots employees.

Obtaining executive management’s buy-in is essential to launching an effective health promotion program.  The workers must understand that executive management is supportive of the health promotion program.

Actions -

Create an Senior Level Management Executive Team to determine high-level decisions â.” positions that ought to be included are the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Communications Officer, and other appropriate division-level managers and health promotion program specialists, as necessary.

The Executive Management Executive Team will -

o  Communicate to all levels of executive management about the wellness program and drive the integration of the Wellness Program as a part of the company culture.

o  Ensure that organizational resources are available for wellness program planning and implementation.

o  Be sure to encourage staff to participate and to assist in “recruiting” other staff, get the momentum going, and keep it growing.

o  Share success stories within the business, and continue to increase the perceived value of participation.

Organize a Health Promotion Advisory Team

Goal - Create a working committee that consists of workforce and essential functional parts of the company.

Focus -  to assist in reshaping the organizational culture to support employee-wellness activities by serving as heralds and supporters for the health promotion program.

Wellness Advisory Committees serve as an essential part of the infrastructure of your Wellness Program.  The team members are the eyes, ears, arms, and legs of the wellness program.

They represent their peers by sharing ideas and concerns about the health promotion program.

Actions -

The Health Promotion Advisory Committee will -

o  Be sure to work with senior level management and the Health Promotion Program coordinator in the design, implementation, and examination of the wellness program.

o  Develop methods to enhance the acceptance and success of the activities of your Wellness Program by encouraging staff member ownership of the health promotion program.

o  Hold periodic meetings to keep the committee informed of upcoming plans and events and to provide feedback to the health promotion program coordinator about their thoughts, ideas, and suggestions, and those of their coworkers.

o  Recommend policy and environmental changes that are aimed at bettering the health and safety of staff.

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Wellness Program - Vision and Mission.

Goal - Develop a baseline of information and identify human and organizational needs.

Focus -  Review a variety of information to better understand past and current conditions regarding healthcare utilization, organizational culture, demographic overview, and health promotion programs.

Data collection plays an important role in planning, monitoring, and evaluating  a health promotion program. It will also set the baseline for continued and future evaluations of health promotion program efficiency, effectiveness, and feasibility.

Actions -

o  Claims review (health care, pharmaceutical) -

o  What have been the 10 most expensive major disease categories in each of the past five years? What are the number of claims and dollars paid for each?

o  What have been the 10 most costly therapeutic classes of drugs in each of the past five years? What are the number of claims and dollars paid for each?

o  What have been the 10 most frequently prescribed and filled therapeutic classes of drugs in each of the past five years? What are the number of claims and dollars compensated for each?

o  Demographic analysis of employee population (may include dependents) -

o  List your number of staff members, by gender, for each of the past five years and the percentages of males and females by age groups.

o  Think about any other factors that may have affected the health of your workers and their use of the health care system.

This might include mergers, acquisitions, workplace trauma, employee strikes, layoffs, early retirement offers, etc.

Management survey -

o  Conduct surveys of mid-level management to understand their concerns and measure their level of interest and buy-in.

o  Employee-interest survey -  Gather information to find out what the staff members want and to measure the level of participation, satisfaction, and “success” of any previous activities.

Risk data (health-risk assessments) -

o  Is there any data from health-risk appraisals over the past five years?

Participation in similar activities -

o  List and describe all health promotion programs that have been implemented over the past five years, including participation rates.

Design of the health plan, and anticipated changes -

o  Have there been any significant changes in the health plan’s design in each of the past five years, like a change from an Health Maintenance Organization (HMO) to a PPO, increased co-payments or deductibles, or increased staff member contributions?

Develop Clearly Announced Vision, Mission and Outcomes

Goal -  Establish a clear vision of wellness program direction, expectations, and measures.

Focus - Setting a vision, mission, goals and goals to keep your Wellness Program focused toward its desired outcomes. It will answer the questions, “Where are we going?” and “How’ll we know when we get there?”

Actions -

o  Identify two to five clearly stated goals. Be sure that your health promotion program is capable of having an impact in the area desired, and make sure that you are capable of measuring that impact.

Example Goal - Staff Members having access to healthier food options

o  Launch two to five measurable goals that especially state what your wellness program is going to accomplish, by when, how, and how it’ll be measured.

Example Objective -  Modify all vending machines to include 50% healthful food choices.

o  Identify several activities that’ll help you reachyour objective. Activities are very specific.

Example Activity - Be certain to work with vending machine owners to identify healthy food choices and restock with 50% of items that are healthier food choices.

o  Identify who’s going to do what, by when, and what resources are needed.

Example Detail -  the Program coordinator will contact XXX Vending Corporation by September 30.

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Wellness Program Incentives.

Develop a Extensive and Strategic Wellness Program

Goal -  A robust Health Promotion Program plan.

Focus -  Development of a plan that consists of a variety of awareness, lifestyle change, and supportive environment program, policies, and activities that will target risk behaviors, needs, and interests of employees.

Your Health Promotion Program ought to provide an integrated, strategic approach specific to the needs, objectives, and culture of your corporation, designed throughout an annual cycle.

It’ll be crucial to review and revise existing policies governing such areas as use of tobacco, vending machines, and the staff cafeteria. Moreover, it is useful to examine what corporate health promotion or health-promotion activities are offered under your existing health-benefit plan.

Actions -

o  Develop activities based on your health promotion program objectives and the specific needs of your personnel. Focus on those topics that are of greatest interest to your personnel and the greatest needs of your corporation, in that order. Avoid topics with narrow appeal.

o  Keep it simple. Design the health promotion program so it’s easy for the participants to understand and track. Let employees focus their learning efforts on their own behavior, not on the rules and regulations of the health promotion program.

Also, simplify the wellness program administration. Let people  record their own activities when possible; develop a mixture of self-reported activities along with verified activities.

o  Integrate a combination of activities to include awareness, educational, and behavior elements. Link the activities throughout the year to allow for desired behavior repetition.

o  Select activities that every worker can participate in.

Examples -

o  Challenges -  Activities that focus on practicing a desired behavior and continue for 4-8 weeks and focus on specific topics (like exercise, nutrition, or stress management).

o  Learning experiences (seminars, videos, classes) -  One-time activities that last for a relatively short time and focus on a specific topic; these can precede “challenge activities” to prepare participants for behavior change.

o  Behavior changes (such as use of tobacco cessation) -  Interventions may or might not be offered at the workplace; individuals must be encouraged to make lifestyle changes that they wanted to make even without the incentive.

o  Illness management (support and education groups for diabetes and hypertension) -  These may  be provided or supported by the company through disease-management vendors, or by community, health, or religious businesses.

o  New skills (first aid, cardiopulmonary resuscitation) -  These may  be provided or supported by the corporation, or by community, health, or religious corporations.

o  Screenings, wellness assessments, physical exams -  A wellness assessment provides the company with aggregate data that may be used in health promotion program planning and examination; preventive screenings and physical exams may be encouraged by awarding credits to workers.

o  Program support (membership or leadership in wellness committee or challenge team) -  Reward those who work with you to help make your Wellness Program a success.

o  Community events -  Reward participation in events like the Heart Walk or March of Dimes Walk; limit the number of these events that could be counted toward the annual total, and be selective about which events you allow to be counted.

Develop an Incentive Strategy

Goal -  to motivate and reward employee participation and completion.

Focus - Create a sense of interest in participation and completion of wellness activities.

Providing incentives and rewards will send an important message to the personnel that the corporation is committed to bettering their health and will share the rewards that these changes will bring. It also plays a significant role in arousing individuals to participate.

Actions -

o  Identify through workers what incentives they value most.

o  Identify what incentives the corporation can provide.

o  Integrate your incentives into your benefits strategy.

o  Ensure that every participant who achieves a goal receives some recognition.

o  Offer participation incentives.

o  Prevent offering incentives for the “best” or the “most.”

o  Prevent rewards for biometric changes.

o  Use incentives to promote your Wellness Program, through logos and branding.

Examples -

Compensated time off, reduction in medical insurance premiums or co-pays, cash incentives, discounts to health clubs, free pedometers, etc.

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Health Promotion Program Communication.

Goal -  Increase awareness of and participation in the Wellness Program.

Focus -  Promote the Health Promotion Program to workers to encourage participation in activities and benefits.

A well-designed communications strategy is paramount to successful wellness program awareness and participation. Even a “world class” wellness program design won’t succeed if nobody knows that it’s available or how to get involved.

Staff Members who don’t get involved in the wellness program ought to be doing so because they select not to participate, not because they didn’t know about how, when, or where to participate.

Actions -

o  Conduct a Resources and Communications Audit to identify internal and external resources available to support your Wellness Program, as well as knowing how information will be disseminated.

o  Keep the wellness program simple and concise -  easy to peruse about, understand, and act upon.

o  Build the brand; make certain it’s something that workers can identify with. Add the brand to T-shirts, water bottles, mouse pads, stress balls, etc.

Use a variety of media -

o  Print â.” flyers, fliers, posters, banners, paycheck inserts, newsletter articles, bulletin boards, literature racks, post cards.

o  Electronic â.” Web, intranet, e-mail, closed-circuit televisions, sign lines, audiovideo productions.

o  Staff meetings and corporation events; word of mouth.

o  Use existing channels of communication â.” what works best in your business â.” and be certain to know about all points of contact and systems of distribution.

Timing for communications -

o  Prior to activity to develop awareness and to educate.

o  During activity to stimulate participation.

o  After an activity to report results.

o  Between activities to maintain momentum and interest.

Consistency of communications -

o  Use branding; maintain a consistent look, feel, and tone of messages.

o  Maintain this consistency throughout the wellness program.

Surveys and forms -

o  Collect information.

o  Disseminate information.

Research shows that untargeted health-promotion campaigns have little long-term impact.

Chronic conditions, which rob individuals and families of their health and happiness, represent major costs to employers in the form of healthcare and disability costs, lost productivity, and absenteeism.

Health Promotion Programs should address risky behaviors that can help your employees eat healthier, increase their level of physical activity, help reduce stress, lower blood pressure and cholesterol, and quit use of tobacco. Health promotion programs should focus on helping employees achieve and maintain their optimal health status.

Robust health promotion programs focused on changing lifestyle behavior have been shown to yield a $3 to $6 return on investment for each dollar invested. It takes about three to five years after the initial health promotion program investment to realize these savings.

Ninety-three% of U.S. companies offer some type of health promotion program for their employees, but is it the right type?

Primary Kinds of Health Promotion Programs

Programs focusing on illness management. These health promotion programs monitor and treat specific illnesses. Disease management follows the 80/20 rule -  80% of healthcare costs are spent on 20% of employees.

Illness management is reported to have a $7 to $10 return on investment within a year.  The 20 percent of personnel requiring the greatest medical expenditures today are usually different 20 percent who’ll cause the greatest health costs a year or two down the road.

Programs focusing on health enhancement and risk management. These wellness programs focus on lifestyle behavior change, and offer a $3 to $6 return on investment within two to five years, as reported by a 2004 report issued by the National Corporation Group on Health.

It is important to note that a $3 to $6 return on an entire worker population produces a higher sum savings than does disease management.

Good Data Drives Good Business Decisions

o  Based on more than 120 research studies, the National Company Group on Health announced that, within five years of wellness program implementation, overall benefit-to-cost ratios (return on investment) of -

o  $3.48 in decreased healthcare costs per dollar invested.

o  $5.82 in reduce absenteeism per dollar invested.

The Facts Speak for Themselves - Wellness Helps Reduce Costs

o  A 2003 investigation of one large USA employer found that simply assisting staff control their blood pressure (BP) alone can save $547 per person per year.

o  Johnson and Johnson claims to have saved $38 million in health care costs for its employees between 1995 and 1999 by promoting healthful lifestyles.

Medical costs reduced $224 per staff member each year (averaged over four years), and this rate improved over time.  The organization found most benefits in the third and fourth years after health promotion program initiation.

o  A 2004 Univ. of Michigan study of 23,500 General Motors staff members showed that nonexercising staff members claimed at least $100 more each year in healthcare costs than exercisers.

The published study  also reported that obese, sedentary staff members who started exercising at least twice a week lowered their costs by an average of $500 a year.

o  The Washoe County School District in Nevada estimated that, in a single year, it spent $300,000 on direct costs associated with obesity and $1 million for gastric-bypass surgeries. It instituted a weight-loss program that paid employees $10 per pound lost, up to 25 pounds.

Program participants missed three fewer workdays per year, producing a cost savings of $15.60 per program dollar spent.

Staff Time

Building a successful Health Promotion Program requires staff time in addition to money. Some larger corporations may spend 20 hours per week for three to six months preparing all the steps before launching a Health Promotion Program.

Business Costs

Monetary costs can fluctuate widely, depending on whether the business compensates all costs, the personnel pay all costs, or the costs are shared.

A 1992 study indicated that 28 percent of businesses spent $5 or less per staff member, and 19 percent spent between $6-10 per staff member.

The Wellness Council of America estimates the cost per employee to be between $100 and $150 a year for an effective wellness program that produces a return on investment of $300 to $450. A sample expenditure for various levels of wellness programs include -

Program Type

A minimal (largely paper) health promotion program          $1 - $7         

A moderate wellness program

A medium wellness program with several activities       $16 - $35            

A fairly comprehensive wellness program             $36 - $75      

A very robust, effective wellness program       $76 - $112            

o  The news is not encouraging. As reported by Company Week, family healthcare premiums increased 49% from 2000 to 2004.

Another increase of 12-15 percent is expected in 2005. General Motors expects to spend $5.6 billion on health care costs in 2005, or 40 percent more than it earned in profits in 2004.

o  More research shows that poor diet andlack of exercise are major drivers of increases in healthcare costs for employers.  The number of obese adults has doubled since the 1970s.

o  The rise in obesity has a meaningful impact on health care costs. on average, 2002 health care costs for an obese individuals were $1,244 higher than for a individuals with a healthy weight.

o  Obesity is causing rapid increases in type 2 diabetes and contributes directly to a 65% increase in diabetes treatment from 1987 to 2002. Almost $1 of every $5 spent on health care in the USA is for a person with diabetes.

Treating worker health care as an investment, rather than a cost, can yield long-term dividends

o  At least 50% of your organization’s healthcare costs are driven by the lifestyle related behaviors of your staff members, like use of tobacco, poor diet, and lack of exercise.

o  In the past 10 years, the annual return on investment for Wellness Programs has been as much as $6 saved for every $1 spent, doubling the return on investment of earlier wellness programs.

o  The typical reduction in health-plan costs, sick time, disability costs, and workers’ compensation is more than 25 percent for well-designed Health Promotion Programs.

o  Fit workforce are more productive workforce, with fewer sick days, fewer accidents, higher morale, and lower job turnover.