Healthy workers are a benefit

For many employees, November is health care enrollment month. In recent years, re-signing has meant an increase in out-of-pocket expenses, higher premiums and deductibles, and/or less coverage —- and sometimes all of the above.

The rising cost of health care affects not only the take-home pay of workers but the bottom line for companies. “It’s the gorilla in the room that is breaking the bank,” said Dave Rearick, medical director at gBehavior, an incentive-based behavior management firm. PricewaterhouseCoopers’ Health Research Institute predicted that corporate medical costs would rise 9.9 percent in 2008 and 9.6 percent in 2009. “Health care costs have become a top concern for CEOs,” Rearick said. “For manufacturers it’s usually a company’s third-greatest cost after labor and materials; for a service firm, it can be second, after compensation of employees.”

For the last decade, the trend has been to shift some of the cost to employees via higher premiums and co-pays or less coverage. “If the premium or cost of using the insurance becomes too high, of what value is the benefit?” Rearick asked. “The best way to control cost is to decrease utilization. It’s a lot cheaper to keep a well person healthy than [treat] a sick one. A healthy work force is a competitive advantage.” With chronic illness accounting for 75 percent of health care costs, organizations are beginning to integrate wellness programs, prevention education and disease management strategies into their benefit packages.

Surprising savings

“Seeing employers make innovative changes aimed at prevention and wellness instead of just shifting costs around is like a breath of fresh air,” said Nancy Kennedy, executive director of Northwest Georgia Healthcare Partnership. This not-for-profit organization, whose members include the city of Dalton and Hamilton Health Care System, is dedicated to improving the health of residents in Murray and Whitfield counties.

The organization was chosen to participate in the Diabetes Ten City Challenge in 2007, an initiative to teach employees with diabetes how to take better care of themselves. Based on the successful Asheville Project (1997) that has become a model for diabetes care by reducing payer costs and improving employee health, the challenge was sponsored by the American Pharmacists Association Foundation and funded by GlaxoSmithKline and participating employers.

“We had four employers with a total of about 5,000 employees, out of which about one in eight had diabetes,” Kennedy said. “When a patient gets into care, you’d think the health care costs would increase, but actually the opposite happens. The medication costs increase, but hospital, doctor and emergency room visits caused by uncontrolled symptoms and complications go down. We saw the cost per participant decrease by $1,460 in the first year.”

Employers paid for the medication and doctor visits of diabetic employees who agreed to meet regularly with a pharmacist trained in diabetes education. The pharmacist tracked the patients’ glucose levels and showed them how to make healthy changes to their lifestyles. Face-to-face consultations were key in getting people to take responsibility for managing their disease, Kennedy said.

Focus on fitness

The Southern Operations division of the utility Atlanta Gas Light launched a health and fitness initiative two years ago.

“We wanted to curb costs, but we also wanted to help our employees, many of whom have 20-plus years with the company. Their knowledge and expertise are invaluable to us, and we wanted to keep them healthy and physically fit,” said Mike Bullard, regional director of Southern Operations.

The company brought in an outside corporate wellness company and put a health ambassador in every field location. “Our president, Suzanne Sitherwood, kicked it off by challenging the management team. She believed that if we took care of our employees, they’d take care of our customers. We’ve seen some life-changing results,” Bullard said. “I was always athletic, but I’d been busy working and earning my MBA and let myself go. When the doctor started talking about blood pressure medicine, I started running and got myself back on track.”

The company invited employees to monthly health and fitness meetings and to take advantage of computer programs to track their progress with diet and exercise habits. They could sign up for personal consultations with wellness coaches to set their own goals. About 25 percent of employees participated in the voluntary program.

“The local ambassadors and employees planned their own exercise options. Some service centers brought in weights and created gyms; others started hiking clubs, softball or basketball teams, and bowling leagues. The first month, employees were skeptical that we were just trying to save the company money, but then they began to feel the impact personally. What we hadn’t anticipated was a boost in morale.”

Collectively, the company lost a ton-and-a-half of weight and saw a drop in hospital visits and medication costs. A retiring employee stopped by to thank Bullard for the program, saying that he had lost 18 pounds and felt better. “Employees see that the company really does care about them,” Bullard said.

Some companies are motivating employees into good behavior through incentives.

“It doesn’t matter how good the wellness program is if you can’t get employees to comply with it,” said Don Doster, president of gBehavior. With compliance averaging about 10 percent to 15 percent in most companies, gBehavior helps its clients get 50 percent to 80 percent compliance through its Rewards for Wellness programs.

The company helps clients assess their health care data to find the greatest costs and devise strategies to reduce costs. Strategies might include encouraging physicals, screenings and blood tests to catch diseases earlier, smoking cessation classes or disease management education.

When employees meet company-defined goals, such as getting an annual physical, a flu shot or participating in a walking program, they earn points that can be redeemed for Amazon.com merchandise or gift cards for stores, restaurants, airlines and sports events.

“Rewards encourage employees to get engaged in their own health, and the better the engagement, the better the overall results —- for them and the company,” said Rearick, author of “Good Health Is Good Business,” (Strategic Benefits Solutions).

Doster has seen rewards bring wellness results in many companies, and he believes it is a better way of getting employee attention than disincentives, such as charging smokers or overweight employees higher health care premiums, as some companies have done.

“There is no magic bullet for cutting health care costs, but all human resource managers are searching for innovative approaches,” said Tim Curtain, corporate account manager with GlaxoSmithKline, which supplies disease management tools for corporations to use. He often speaks to human resource leaders about best practices, such as the “Total Value/Total Return: Seven Rules for Optimizing Employee Health Benefits for a Healthier and More Productive Workforce,” by Jack Mahoney, M.D., and David Hom of Pitney Bowes.

Pitney Bowes’ success implementing a better heath care plan was based on the belief that the health of its organization rested on its employees, understanding costs, developing value-based benefits for the company, and employees and management having shared accountability for meeting goals.

“In the future, we’re probably going to see more incentives and employees asked to be more accountable for their health —- it’s a two-way street,” Curtain said.