Health reform may create an opportunity for employers contemplating new or expanded wellness programs. In the latest issue of Benefits Perspectives, Sharon Stocker examines keys to creating a valuable program, with an emphasis on effective communications to ensure employee engagement and participation.
Here’s an excerpt:
1. Understand Your Audience
The goal of health promotion is behavior change, and reversing unhealthy habits that may have been built over many years is not easy. An effective change strategy calls for knowing your audience—what motivates them, potential obstacles, and tools they need for support.
Surveys and focus groups are a useful way to uncover what is most relevant for your employees and their families. (Involving family members is critical – dependent healthcare costs are a sizable factor.) Once the top areas of need and interest are clear, as well as potential barriers to participation, you can target strategies to address them.
Asking for opinions and input serves another important purpose – nurturing a sense of pride and ownership in the program. The most engaging communication is interactive, with ideas and information flowing both ways.
Be sure to clearly state survey/focus group objectives from the outset, letting employees know how the research will be used. You don’t want to imply sweeping changes unless that’s your intent. Acknowledge the value of their input and be serious about acting on the results—or risk having disgruntled employees.
2. Create and Promote a Brand That is Uniquely Yours
The best brands inspire recognition, enthusiasm, and loyalty. Once you have a positive, action-oriented campaign, branding it will help the program capture—and keep—people’s attention.
Your wellness program name and graphic look should align with and reflect the organization’s identity and values. You want to infuse the program with a sense of excitement so that people want to be a part of it. Engage employees and invite participation from the start by having a contest, with healthy prizes, to name the program.
A strong brand also conveys commitment, sending a message that the program is here to stay and worth attention as well as involvement.
To read the entire article, click here.
Workforce Management looks back at the roots of the wellness concept.
Also driving enthusiasm for workplace wellness campaigns in the 1980s was the rising cost of health benefits…
In 1987, StayWell, along with actuarial firm Milliman & Robertson (now called Milliman Inc.), released a study showing for the first time that common health-risk factors such as smoking, obesity and not wearing seat belts were strongly linked to higher health care costs. Subsequent studies backed those findings.
“It got employers very interested in costs,” [David] Anderson [of StayWell Health Management] says.
Just for the sake of nostalgia, check out the prices of various household goods in 1987. The car prices in particular caught our eye–especially with healthcare costs for a family of four in 2012 approximating the cost of a midsize sedan.
We’ve been discussing the results of our poll on alternatives to the PPACA individual mandate. The second-most popular idea on the poll was “enforce a penalty that escalates the longer people wait to buy health coverage.” In the Government Accountability Office (GAO) report on mandate alternatives, a range of possible financial penalties are mentioned in conjunction with limiting enrollment windows (which was itself the most popular idea from the poll):
Late enrollees could enroll during subsequent open enrollment periods, or possibly between open enrollment periods, but incur financial penalties. Such penalties could take the form of requiring retroactive payments of missed premiums from the date of the last open enrollment period, or a flat or gradually escalating premium penalty depending upon the length of time without coverage. To encourage individuals to maintain their coverage once enrolled, the premium penalties could decline after a period of continued coverage, until they are eventually eliminated. Other financial penalties could include higher cost sharing for the individual, such as copayments, coinsurance, or deductibles. Another financial penalty could be to reduce or deny subsidies for otherwise eligible late enrollees. Another variation would be to provide a premium discount to all individuals who enroll when first eligible, but withhold the discount from late enrollees.
Of course, as the report goes on to point out, financial penalties might tend to further discourage younger, healthier, but less-wealthy individuals from purchasing coverage, which runs counter to the goals of broadening coverage and reducing costs.
The notion of of using financial incentives and penalties to change behavior is something that has been discussed quite a bit in recent years. For example, we recently looked at how the PPACA raises the level of financial incentives that employers can use to encourage employees to meet wellness targets.
Bloomberg recently reported on one of the less-discussed elements of the Patient Protection and Affordable Care Act (PPACA): the way the law increases the ceiling on incentives and penalties employers can use to encourage participation in wellness programs. The incentives and penalties come in the form of premium increases or discounts. Formerly limited by HIPAA to 20% of premium, the PPACA raises the limit to 30% and leaves the door open to 50% in the future. Financial incentives and penalties can be used in both participation-based (join the gym) and outcomes-based (meet a BMI target) programs.
In the article, a pair of researchers from Georgetown University claim that these incentives, if poorly designed, could end up costing less-healthy workers more and potentially even driving them out of employer-sponsored plans. On the other hand, wellness plan administrators say they make sense as they reduce risk to employers. In any case, employers will want to weigh the implementation of these incentives carefully against the return on investment (ROI) from wellness programs. If less-healthy employees are discouraged from using their health benefits because of high deductibles or a switch to less benefit-rich plans because of high premiums, they may be more likely to let health issues linger until they become more critical and costly.
Milliman consultants have examined the issue of wellness programs from a number of perspectives. Kathryn Fitch and Bruce Pennyson published an article in Benefits Quarterly that covers the breadth of wellness programs, the evidence base for them, how employers should target candidates, and reasonable success criteria. In an interview, Fitch also talked about lessons learned from wellness programs in the private sector. And, Scott Weltz discussed how companies can use evidence-based measures to look at wellness program effectiveness in the early years of implementation when ROI data are very hard to come by.
We’ve blogged before about the difficult question of wellness and whether or not it actually helps to contain costs. The New York Times picks up on this with a recent story about disease management. Here’s an excerpt:
Though chronic ailments like asthma, diabetes and heart disease consume a disproportionate share of health care costs, many critics are skeptical about the potential of improved care alone to reduce expensive hospitalizations and cut costs.
“I think it would be optimistic to assume these programs alone are going to be the savior of the cost issue that we’re challenged with,” said Robert Parke of the actuarial firm Milliman Inc., who is a member of the American Academy of Actuaries’ working group on disease management.
“That’s not to say we shouldn’t be doing them,” he went on. “Even if they don’t save you money, even if they break even, they still might be the right thing to do because they’re improving the quality of care. But there’s a cost involved in managing them, and the savings may be more than offset by those costs.”
He and other experts noted that Medicare’s efforts to stem costs through chronic disease management and care coordination among the elderly were largely unsuccessful, leading instead to higher fees.
For more on disease management, click here.
Electronic Health Records
A new article in Employee Benefit News looks at the notion of employer “pay-or-play” provisions and examines what kinds of employer-sponsored benefits provide a return on investment. There continues to be some question whether certain programs sponsored by employers do in fact return value. Here is an excerpt from the article:
Health management programs are not without their critics. Research by the Centers for Medicare & Medicaid Services shows some health management programs don’t live up to their promises of reducing health care expenses.
“As an actuary, I run the formulas of disease management companies on large databases and understand why they can show an ROI increase in their formulas and what the flaws are within those formulas,” said Bruce Pyenson, a principal and consulting actuary with Milliman, a New York-based actuarial and consulting firm.
Pyenson pointed out that Americans are living longer, disability rates are lower and events associated with some chronic conditions are at an all-time low. “Americans are healthier than ever, despite the obesity epidemic,” Pyenson contended….Pyenson explained that the idea “you spend more money now in order to save more money later is an idea that does not work.”
Health care reform puts the spotlight on “some bad behaviors that employers have gotten into with benefit plans designs. Now is the time to sweep out some of that trash that accumulated over the years in benefits plans,” asserted Pyenson.
For example, employers can save money by dropping disease management and employee assistance programs, and value-based insurance designs. “It’s been proven that the stuff doesn’t work,” Pyenson said. Employers instead should aim for tighter formularies on prescription drugs benefits and challenge the commissions of brokers and consultants.
According to Pyenson, employers also can earn substantial dollar savings by moving to a limited network, tightening medical management, limiting out-of-network benefits or offering no out-of-network benefits.
A recap of an EBRI forum from last December reopens the old question of wellness programs and whether or not they provide value. Here is an excerpt:
Do wellness programs work? Yes, says Beth Umland, head of Mercer’s health and benefits research unit. While controversy persists, “data is starting to accumulate that show that these programs actually are cost effective.” Among those employers that have tried to measure the ROI for wellness programs, “about three-quarters say it’s been very successful,” Umland continued. Pam French, director of benefits for Boeing, Inc., also endorsed the value of wellness programs.
Taking the opposing view was Bruce Pyenson, a consulting actuary with Milliman. Disease management and other wellness programs don’t work, he said. “The theory that you can spend more now to save money later in health care is just wrong. If you want to spend less in health care, you should spend less in health care,” according to Pyenson.
Pyenson’s perspective is actually a bit more nuanced than just that—but the point is that it becomes difficult to find ROI when many wellness programs require getting people with very few annual healthcare claims to engage the system. Given this dynamic, certain programs work better than others.
Electronic Health Records
The latest Atul Gawande article examines how pilot programs in the Senate healthcare reform bill may help to moderate healthcare cost increases:
The bill tests, for instance, a number of ways that federal insurers could pay for care. Medicare and Medicaid currently pay clinicians the same amount regardless of results. But there is a pilot program to increase payments for doctors who deliver high-quality care at lower cost, while reducing payments for those who deliver low-quality care at higher cost. There’s a program that would pay bonuses to hospitals that improve patient results after heart failure, pneumonia, and surgery. There’s a program that would impose financial penalties on institutions with high rates of infections transmitted by health-care workers. Still another would test a system of penalties and rewards scaled to the quality of home health and rehabilitation care.
Other experiments try moving medicine away from fee-for-service payment altogether. A bundled-payment provision would pay medical teams just one thirty-day fee for all the outpatient and inpatient services related to, say, an operation. This would give clinicians an incentive to work together to smooth care and reduce complications. One pilot would go even further, encouraging clinicians to band together into “Accountable Care Organizations” that take responsibility for all their patients’ needs, including prevention—so that fewer patients need operations in the first place. These groups would be permitted to keep part of the savings they generate, as long as they meet quality and service thresholds.
The bill has ideas for changes in other parts of the system, too. Some provisions attempt to improve efficiency through administrative reforms, by, for example, requiring insurance companies to create a single standardized form for insurance reimbursement, to alleviate the clerical burden on clinicians. There are tests of various kinds of community wellness programs. The legislation also continues a stimulus-package program that funds comparative-effectiveness research—testing existing treatments for a condition against one another—because fewer treatment failures should mean lower costs.
Looking for more reading on some of these concepts? Try these:
A $.62 Federal tax on cigarettes is getting some ink this week, just as a House vote to give the FDA regulatory power over the tobacco industry attracted attention last week.
Some are framing these developments as part of the larger healthcare reform debate and even suggesting the tax could help reduce other healthcare costs. Do the cost claims hold up? Hard to say, though employer-sponsored smoking cessation programs pay for themselves, one of the few examples of wellness initiatives with a clear return on investment.
Government, Prevention, Wellness
As we mentioned on Monday, the cost-savings potential of prevention and wellness is still uncertain. Milliman Principal Kate Fitch provides some perspective on this.
Wellness is often mentioned as a key component of healthcare reform yet the success of these programs is mixed.
We asked Kate Fitch for perspective based on lessons learned from the private sector.
Q: What wellness programs are most effective? Do some programs work better than others?
Kate Fitch: Program effectiveness goes beyond whether or not it “works.” Wellness programs should be evaluated in terms of both efficacy and value. Providing everyone with a personal trainer, personal nutritionist, and exercise equipment in the home might result in a few great outcomes. But if the cost becomes astronomical, or if the population affected by the program is insignificant, the value of the program comes into question.
Comparative Effectiveness, Evidence-based Requirements, Prevention, Value, Wellness