Buildig a Effective Welless Strategy Make Welless Work for You. A White Paper by Meritai Health
TABLE OF CONTENTS The State of Health ad Healthcare i the U.S. 3 The eed for welless 3 Welless programs brig value 3 Buildig a Effective Welless Strategy 4 Combiig welless programs with other care iitiatives 4 Care maagemet ad disease maagemet programs 5 Buildig a culture of health 5 Awareess ad Employer Commuicatio Strategies 6 Tactics to itroduce ad promote a welless program 6 Ogoig commuicatios 7 Icetives 7 Cash is compellig 7 Retur o Ivestmet 8 Healthcare Reform ad Welless 9 Make Welless Work for You 9 About Meritai Health 10 www.meritai.com
The State of Health ad Healthcare i the U.S. The overall state of health i the Uited States is omious: as reported by the Ceters for Disease Cotrol ad Prevetio, seve out of te America lives are claimed each year by chroic diseases, with 50 percet of all aual deaths caused by heart disease, cacer ad stroke. 1 A precursor for all of these coditios is obesity: 72.5 millio people i the U.S. are obese. This equates to 18 to 34 percet of the populatio, depedig o the state. 2 The cost of healthcare cotiues to grow right alog with Americas waistlies. Accordig to a recet study by Towers Watso, employer healthcare costs for active employees are expected to rise 8.2 percet i 2011, to a average aual cost of $10,730. 3 Obesity helps drive this total up: recet estimates of the aual medical costs of obesity are as high as $147 billio. 4 The eed for welless Healthy employees beefit their employer i two ways: they help keep the compay competitive i today s market ad they help reduce aual healthcare expeses. I order to be egaged ad successful at their jobs, employees ca t be bogged dow by chroic medical coditios. Healthy employees are productive employees; this allows for valuable, sustaied workforce cotributio. Healthy employees also require fewer costly medical appoitmets tha their uhealthy couterparts. Sixty-seve percet of employers say the most commo challege they face with providig affordable healthcare coverage is the poor health of their employees. 5 With healthcare beefits accoutig for 38 percet of the total cost of employee beefits, the eed for improved employee welless is more pressig ow tha ever before. 6 A well-executed welless strategy provides the iformatio, support ad motivatio that employees eed to achieve ad maitai good health, addig to employee egagemet ad prevetig decreased work performace. All of these thigs affect a compay s ability to reach corporate goals. Welless programs brig value Worksite welless programs are perceived as valuable by both employers ad employees, as evideced by the MetLife 8 th Aual Survey of Employee Beefits Treds. As revealed by this survey, 69 percet of employers ackowledge welless programs as a effective way to reduce medical costs. Of the employees surveyed, 57 percet reported participatio i employer-sposored welless programs. Employees also associated welless programs with better health ad improved productivity. 7 Employers ad Employees State that Where Offered, Health ad Welless Programs May Improve Productivity Employees' Participatio i Welless Programs is Associated with Good Health 48% Nearly half of all employers who offer welless programs say they are very effective at improvig productivity. 63% 61% 52% 52% 57% Well over half of the employees who participate i their compay's welless programs say the programs are very effective at improvig productivity. Employees who participated successfully (ad described ow health as excellet/ very good). Employees who did ot participate (ad described ow health as excellet/ very good). Experieced weight loss Icreased exercise SOURCE: 8 th Aual MetLife Survey of Employee Beefits Treds www.meritai.com 3
Buildig a Effective Welless Strategy Welless programs are traditioally desiged to promote welless ad educate employees regardig ways to live a healthier lifestyle. These programs typically cosist of compoets such as self-reported health risk assessmets, olie health portals ad telephoic health coachig. As welless strategies cotiue to grow i popularity, cotiuig research has provided iformatio about techiques that ca further maximize the effectiveess of a welless program, alog with its uderlyig methodologies ad side-by-side programs. Combiig welless programs with other care iitiatives To receive the greatest beefit from a welless strategy, it s importat to alert employees to idividual healthcare eeds ad provide adequate iformatio ad support o healthy lifestyle practices. Effective welless strategies do more tha just offer traditioal welless programs; they also measure biometrics, reductio i health risk ad behavior chage. This data ca be used to ehace the effectiveess of the welless program. More tha 2/3 of compaies have added or ehaced their existig programs or expect to do so i the ear future. 8 A study coducted by SHPS showed further evidece that a traditioal welless program aloe is ot the aswer for employer cost savigs. Fidigs i the study idicated that u-supplemeted welless programs might actually icrease aual costs by almost 17 percet. Accordig to the SHPS study, a comprehesive welless strategy ca be created by combiig the traditioal welless program compoets with biometric screeigs, a care maagemet or disease maagemet program, icetives for participatio ad cosistet commuicatio with employees. The study fidigs showed that, of employers who were otherwise comparable, employers who implemeted a combiatio of these health maagemet techiques had a aual cost differece of 30 to 50 percet below employers who did ot. 9 Impact o Employer Aual Healthcare Costs * 20% 15% 10% 5% 17% 21% Care Maagemet Cash Icetives Admiistratio & Commuicatio Welless Promotio Traditioal Practices Average Cost per Employee $7,713-5% -10% -15% -20% -18% -15% -13% *Impact o aual healthcare costs is based o a regressio aalysis of the correlatio of specific beefits practices with total healthcare costs. The study did ot factor i the legth of time practices had bee i place. It is importat to ote that impact will vary by employer. SOURCE: SHPS Study of the Effectiveess of Employer Sposored Welless Programs www.meritai.com 4
Care maagemet ad disease maagemet programs Chroically ill employees comprise roughly 30 percet of a workforce, but accout for up to 80 percet of the fuds spet by employers to keep that workforce healthy. 10 Helpig to halt ad eve reverse the progressio of illess i those employees that suffer from chroic coditios ca help prevet future high-cost medical procedures. Fidigs i the SHPS study support the iclusio of care ad disease maagemet programs alogside the welless program, as they address the specific eeds of chroically ill employees ad ca result i 18.2 percet aual cost savigs. 11 The most effective care ad disease maagemet strategies i the SHPS study were those tailored to the specific eeds of a employee populatio. The followig chart shows the percetages of employers surveyed who offered care maagemet optios as part of a overall welless strategy ad the types of programs that were offered. Percetage of Employers Offerig Care Maagemet Programs Health risk assessmets 60% Web-based health portal 55% EAP 54% 24/7 urse hotlie 50% Disease maagemet for chroic coditios 48% Case maagemet for catastrophic coditios 43% O-site fitess ad exercise programs 37% Disability maagemet 37% O-site health screeigs or biometric testig 33% Telephoic coachig for lifestyle maagemet 30% O-site urse or doctor 21% SOURCE: SHPS Survey of Employers Offerig Care Maagemet Programs as Part of a Overall Welless Strategy Buildig a culture of health A supportive eviromet ca be effective i icreasig employee participatio i a corporate welless program. Welless ad Prevetio, Ic., a Johso & Johso Compay, coducted a study of successful welless program participatio. The study discovered that employees were three times more likely to participate i the compay welless program if the compay had a strog culture of health. A culture of health is defied as a workplace ecology i which the dyamic relatioship betwee huma beigs ad their work eviromet urtures persoal ad orgaizatioal values that support the achievemet of a perso s best self while geeratig exceptioal busiess performace. 12 Compaies that stressed this philosophy had several practices i commo, such as maagemet support, motivatioal programs ad evirometal iflueces allowig employees to maitai positive behavioral chages. Employees i compaies who focused o a culture of health were foud to have high participatio rates i physical fitess assessmets, weight loss programs ad exercise participatio. 13 Welless Programs ad HIPAA Begiig i December of 2006, HIPAA law madated that welless programs offerig rewards for achievig specific health stadards follow a series of requiremets. These welless programs must esure that rewards are offered yearly, to all similarly situated employees, ad must be limited to o more tha 30 percet of the cost of employee-oly coverage. Discouts ca cosist of a reductio to beefits premiums or a waiver of some, or all, of the employee s out-of-pocket cotributio to a deductible, copay or coisurace. Welless programs must promote good health. Materials related to the program must provide iformatio about a reasoable alterative to participatio i the welless program. For more iformatio about HIPAA, welless program requiremets ad other govermetal regulatios, please visit www.meritai.com. www.meritai.com 5
Awareess ad Employer Commuicatio Strategies Like ay ew product, welless programs have to compete for the attetio of employees. Icorporatig these programs ito a compay medical pla or a overall beefits package is o guaratee of employee participatio; they must be promoted. A 2010 research study by Texas A&M Uiversity ad the Uiversity of Texas MD Aderso Cacer Ceter idicated that, of the 10 compaies reviewed, six commo practices (metioed below) have allowed for the success of their welless programs. The compaies were able to improve employee health, productivity ad morale while savig moey o healthcare costs. Oe of the compaies, a grocery retailer, was able to yield a retur o ivestmet of six to oe. 14 I geeral, the welless programs of the 10 compaies were high quality, well-plaed ad well-commuicated. They featured: 1. Participatio at all levels of the compay. CEOs ad middle maagers ot oly advocated welless, but practiced what they preached. Also, welless program maagers worked with the compaies to desig ad cotiuously ru programs pertiet to the employee populatio. 2. Welless program iitiatives were aliged with the busiess culture of the compaies. For example, maagers ecouraged staff to work a persoal health goal ito their uit s busiess goals. 3. Program compoets allowed for the differet eeds of the idividual employee participats. A variety of services ad activities, such as themed welless days ad walkig challeges, allowed employees variable opportuities for participatio. 4. Welless programs ad services were accessible. O-site gyms were ope eveigs ad weekeds, healthcare staff made o-site visits ad healthy food was made available i the cafeteria that was utritious, creative ad palatable. 5. The compaies partered with exteral vedors. This partership offered resources that the compaies could t provide iterally, thus ehacig their welless offerigs to their employees. 6. Program iitiatives ad activities were well-commuicated. Commuicatio methods icluded desk-drops, posters, the compay itraet, corporate email ad trikets. Tactics to itroduce ad promote a welless program ca iclude: Commuicatios that are targeted to both employees ad their families. A letter or email from upper maagemet that explais the backgroud ad purpose of the program, how it works ad how idividual privacy will be respected. Make it clear that maagemet will see aggregate, ot idividual, test results ad that respect for employees privacy is a requiremet of federal law. The Welless Coucils of America stress the commitmet by seior leadership i a effective welless program, from fiacial backig to visible ivolvemet. 15 A logo or program ame to build recogitio whe referrig to the program. All commuicatios should have a commo theme, look or brad. A flyer or brochure, which explais how the program works, describes ay icetives, ad gives a toll-free umber for employees to make a appoitmet for a o-site screeig ad a health risk assessmet. These flyers ca be used as payroll stuffers or ca be mailed to the employees homes. O-site screeigs ad health risk assessmets scheduled durig a aual health fair or ope erollmet period. Piggy-backig o aother evet ca help build traffic. Use this opportuity to remid employees about program icetives, such as cash rewards, healthcare discouts or premium reductios. Postcards set to those who have registered for the health assessmet ad screeig; iclude a remider to fast o the day of the tests. www.meritai.com 6
Promotio of the program i the compay s employee ewsletter or over the itraet. Take advatage of the compay s itraet or compay website. Sice web commuicatio is real time ad ca be updated without repritig large documets, the web allows employers to commuicate more frequetly ad o-demad. Web-based commuicatios are most ofte used for trasactios or for accessig referece iformatio, icludig beefit programs. Ogoig commuicatios To help guaratee the success of your welless program, commuicatio efforts eed to cotiue, year to year. Accordig to a article published by the Natioal Istitute for Health Care Reform (NIHCR), Commuicatios must be ogoig ad updated to keep the message fresh ad keep employees egaged. The NIHCR also recommeds that messages come from withi the compay, either from seior leadership, a dedicated welless staff or fellow employees who have beefited from participatio i the welless program. 16 Icetives Icetives are a madatory part of a welless strategy, accordig to the SHPS research. Results showed that cash-based icetives ca help a employer save up to 15.1 percet off aual healthcare costs. 17 The MetLife study, as well, reported that although 70 percet of surveyed employees said they participated i their welless program to achieve good health, a full 50 percet cited fiacial rewards as their icetive for participatio. 18 Cash is compellig Cash icetives, i particular, ca help ecourage employee participatio i prevetive care screeigs, health risk assessmets ad disease maagemet programs. A reductio i pla premiums, a employer cotributio to a Health Reimbursemet Accout (HRA) or Health Savigs Accout (HSA), or a direct cash payout, are all commo forms of cash icetives. A study published i Populatio Health Maagemet idicated that compaies who offer icetives for welless program participatio realize a total average aual healthcare cost icrease that is 50 percet less tha the market tred. 19 Percetage of Employers Usig Icetives to Drive Health-Related Behaviors Gift certificate or merchadise 14% Reduced premiums 54.8% 14% Cash paymet to employee 11% Cotributio to HRA or HSA 7% Chage i deductible, coisurace or copay 5% Free or discouted geeric drugs 4% Other 3% SOURCE: SHPS Survey of Employers Offerig Icetives as Part of Their Overall Welless Strategy www.meritai.com 7
Tax Cosequeces Although icetives are a importat part of a effective welless strategy, employers eed to be aware that taxes eed to be paid, by employees, o icetives that ivolve givig cash or gifts. Before offerig a fiacial icetive, beefits maagers eed to be midful of the tax resposibilities of icetive-based welless programs. Employees will eed to pay taxes o cash, gift certificates, employer subsidies of exercise equipmet ad health magazies, as well as reimbursemets for the cost of gym memberships, weight maagemet classes ad utritio classes for geeral health improvemet. Taxes do ot apply to: Lowerig employee cotributios to premiums. Memberships, equipmet ad classes prescribed by a physicia. Employer cotributios to a Flexible Spedig Accout, Health Savigs Accout or Health Reimbursemet Accout. Gym or exercise facilities ad classes that are o-site. Reimbursemets for the cost of disease maagemet or smokig cessatio programs. Retur o Ivestmet The Welless Coucils of America report that retur o ivestmet, or ROI, for welless programs usually falls aroud 3:1 ($3 saved for every $1 spet). Employers usually require aroud three years for their welless strategy to take effect before they will begi to realize these savigs. 20 Those familiar with welless programs stress the eed for a log-term perspective ad there are a few reasos for this: first, chages i huma behavior take time; secod, abormal test results may trigger a iitial wave of medical appoitmets, especially amog those ewly diagosed, which would ot otherwise have occurred without the welless program. As a result, short-term ROI ca be skewed. Although it is difficult to establish a cause ad effect relatioship for programs associated with prevetio, some measuremet idicators iclude: A high participatio rate i the welless program. The Welless Coucils of America ote that higher participatio rates ca geerate higher ROIs; a ideal participatio rate is betwee 50 to 75 percet. A gradual reductio i health risk factors (e.g. high blood pressure, high cholesterol, diabetes, etc.). A drop i utilizatio of emergecy room ad office visits over time. www.meritai.com 8
Healthcare Reform ad Welless Through the atioal effort to improve America healthcare beefits, the Patiet Protectio ad Affordable Care Act (PPACA) icludes provisios to develop ad support worksite welless programs: Busiesses with fewer tha 100 employees workig at least 25 hours per week ca receive govermetal grats to help implemet a worksite welless program. The compay does ot eed to have a program already i place whe they apply. A worksite welless program must iclude: Health awareess iitiatives, such as prevetive screeigs. Methods to ecourage employee participatio. Programs ad services to support healthy behavior chage. Supportive work eviromet policies, such as healthy eatig or physical activity. Begiig i 2014, limits o participatio icetives will be icreased to 30 percet of the cost of idividual or family healthcare premiums, up from 20 percet. Busiesses will be supported by the Ceters for Disease Cotrol ad Prevetio (CDC), providig techical assistace with, amog other items, measurig ad icreasig employee participatio. PPACA will require aual quality of care measuremet reports to be submitted to erollees of the welless program, as well as to the Secretary of Health ad Huma Services. PPACA s provisios demostrate our govermet s perceived values by helpig workers achieve ad maitai welless, especially through icetives for welless program participatio. Icreased support like this allows employers to help employees get ad stay well, to reverse the growig price tag placed o the care of uhealthy workers. Make Welless Work for You As compaies icorporate techiques to combat risig healthcare costs, welless programs stad out as a employer s best defese agaist both direct healthcare costs ad idirect costs such as lost productivity ad employee abseteeism. Fidig a beefits parter that ca work with you to build a comprehesive welless strategy is paramout i gaiig a foothold i today s tough ecoomic times. About Meritai Health Meritai Health, a idepedet subsidiary of Aeta, is oe of the atio s largest admiistrators of health beefits. We offer the resources of a atioal carrier ad the umatched flexibility ad service of a idepedet, local admiistrator. Our approach provides employers with cost-effective pla admiistratio withi a custom framework of variable etworks, idustry-leadig products ad services, ad cost maagemet strategies. www.meritai.com 9
SOURCES 1 Hsiag-Chig Kug, PhD, et al. Natioal Vital Statistics Reports, Deaths: Fial Data for 2005, Ceters for Disease Cotrol ad Prevetio, Atlata, GA, April 24, 2008, p. 8. 2 B. Sherry, PhD, et al. Morbidity ad Mortality Weekly Report: Vital Sigs: State- Specific Obesity Prevalece Amog Adults-Uited States, 2009, Ceters for Disease Cotrol ad Prevetio, August 3, 2010, p. 1. 3 Chages Ahead, Health Care Reform i a Challegig Ecoomy, Towers Watso, September, 2010. 4 B. Sherry, PhD, et al. Morbidity ad Mortality Weekly Report: Vital Sigs: State- Specific Obesity Prevalece Amog Adults-Uited States, 2009, Ceters for Disease Cotrol ad Prevetio, August 3, 2010, p. 1. 5 The 15th Aual Natioal Busiess Group o Health-Towers Watso Employer Survey o Purchasig Value i Health Care, Natioal Busiess Group o Health- Towers Watso, 2010, p. 5. 6 Costs for Employee Compesatio-Jue 2011, Bureau of Labor Statistics, U.S. Departmet of Labor, September 8, 2010, p 10. 7 8th Aual Study of Employee Beefits Treds, Fidigs from the Natioal Survey of Employers ad Employees, Metropolita Life Isurace Compay, 2010, pp. 22-23. 8 The Health ad Productivity Advatage, Watso Wyatt Worldwide, 2009-2010, p. 14. 9 2007 SHPS Health Practice Study, What Every Self-Isured Employer Should Kow, SHPS, Louisville, KY, 2007, p. 3. 10 IBID 11 IBID 12 Get Employees Egaged i Welless by Creatig a Strog 'Culture of Health, December 6, 2010, <http://hr.blr.com/hr-ews/beefits-leave/employee-well ess/get-employees-egaged-i-welless-by-creatig-stro/>, accessed o December 22, 2010. 13 IBID 14 Leoard L. Berry, A M. Mirabito ad William B. Bau, What's the Hard Retur o Employee Welless Programs? December 2010, <http://hbr.org/2010/12/whats-thehard-retur-o-employee-welless-programs/ar/1> Accessed December 2010. 15 Dr. Ro Goetzel, ROI for Workplace Welless, Welless Coucils of America, Omaha, NE, p. 4. 16 Ha T. Tu ad Raplh C. Mayrell, Employer Welless Iitiatives Grow, but Effectiveess Varies Widely, Natioal Istitute for Health Care Reform, July, 2010, p. 8. 17 2007 SHPS Health Practice Study, What Every Self-Isured Employer Should Kow, SHPS, Louisville, KY, 2007, p. 9. 18 8th Aual Study of Employee Beefits Treds, Fidigs from the Natioal Survey of Employers ad Employees, Metropolita Life Isurace Compay, 2010, p. 26. 19 Cydy Nayer, Ja Berger, MD ad Jack Mahoey, MD, Welless, Hard to Defie, Reduces Tred up to 4%, Populatio Health Maagemet, Vol. 13, No. 2, 2010, p. 1. 20 Dr. Ro Goetzel, ROI for Workplace Welless, Welless Coucils of America, Omaha, NE, p. 4. This white paper is a publicatio of Meritai Health, produced for iformatioal purposes ad distributed to our cliets ad other members of the busiess commuity. Its cotets should ot be costrued as legal or busiess maagemet advice. Readers should cotact their legal cousel or professioal advisors before makig ay decisios based o iformatio cotaied i this publicatio. www.meritai.com 10
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