Wellness Program Blog

What began more than a decade ago as a pilot program in two locations, has now developed into a global initiative for Motorola. The company’s Company Wellness is run by the Global Rewards group consisting of more than 50 workers and funded by an annual grant. Programs are consistently assessed on their ability to deliver a positive return on investment and benefit the collective Motorola community. central, the program reaches more than 30,000 workers, family members and retirees.

Company Wellness  Features:

• The company provides no cost membership for active workers to Wellness Centers located at 8 United States locations (retirees pay a small fee).
• Workers at locations without a Wellness Center receive $240 to help cover the cost of a membership at a qualifying fitness center.
• In 2003, the company provided flu immunizations to more than 11,000 workers, dependents and retirees at 70 onsite locations.
• Motorola holds hundreds of health education classes each year for workers.

Company Wellness  Determinations:

• Among workers who regularly used onsite Motorola Wellness Centers or an alternate fitness center the company saved $3.93 for every $1 it spent, according to data from 2000.
• Participating workers cost $6.5 million dollars less in lifestyle-related medical expenses than non-participants.
• Company Wellness  participants experienced annual Health Care cost rises of 2.5 percent, compared to 18 percent rises for non-participants.

Obesity

Obesity, one of the fastest increasing epidemics in America, is the most prevalent health risk among workers. Obese people are at a greater risk for several chronic diseases such as congestive heart failure, type 2 diabetes, stroke and hypertension.

Facts:

• The prevalence of overweight and obesity has doubled since 1980.
• Two-thirds (66.3 percent) of the population is overweight or obese (using Body Mass Index as a measure); 32.3 percent are obese.
• Obesity has roughly the same association with chronic health conditions as 20 years of aging.
• Greater than 20 percent of very overweight workers have low morale, almost twice that of workers of healthy weights.
• Overweight and Obesity medical claims cost around $92 billion in 2002, 9.1 percent of all United States Health Care expenditures.

Mental Illness

Often ignored or misdiagnosed, mental illness is one of the most disruptive health issues in employers. It is unique in that its indirect costs (particularly presenteeism) are often higher than its direct medical costs.

Facts:

• Approximately 20 percent of the United States population is affected by mental illness during a given year, with the most common form being depression; yet in 1997, only 23 percent of American adults diagnosed with depression received treatment.
• In 2001 mental illness and substance abuse treatment cost more than $104 billion, comprising 7.6 percent of domestic Health Care spending.
• Around 217 million days of work are lost each year due to productivity decline from mental illness and substance abuse disorders, costing $17 billion each year.
• Depression is one of the most costly workplace health problems, costing the United States $43.7 billion each year, including workplace costs for absenteeism and lost productivity.

Smoking

Though smoking rates have decreased slightly in the U.S. over the past decade, smokers still make up 21.1 percent of the population.  For many employers, limitations on smoking in facilities means a greater loss of productivity during breaks, adding to the costs of the practice.

Facts:

• The United States Center for Disease Control and Prevention (CDC) puts a $3,391 price tag on each employee who smokes: $1,760 in lost productivity and $1,623 in excess medical expenditures.
• Workers who use tobacco had about two times more lost production time (LPT) per week than workers who never smoked, a cost of $27 billion to employers.
• An economic assessment found that a Health Care plan’s annual cost of covering treatment to help people quit smoking ranged from $0.89 to $4.92 per smoker, whereas the annual cost of treating smoking-related disease ranged from $6 to $33 per smoker.
• The direct and indirect costs of smoking are estimated at $138 million per year.43 Finding Wealth Through Wellness 19 • Quitting smoking could decrease an individual’s Health Care costs by $960 each year.
• Secondhand smoke costs the United States economy roughly $10 billion a year: $5 billion in estimated medical costs associated with secondhand smoke exposure, and another $4.6 billion in lost wages.
• From 1997-2001, tobacco use and exposure to tobacco smoke resulted in approximately 438,000 premature deaths in the U.S., 5.5 million years of life lost, and 92 billion dollars in productivity losses each year.
• Smokers, on average, miss 6.16 days of work per year due to sickness (including smoking related acute and chronic conditions), while people that do not use tobacco miss 3.86 days of work per year.
• Each smoker who successfully quits lowers the anticipated medical costs associated with heart attack and stroke by an estimated $47 in the first year and $853 during the following seven years.

Increasing Health Care costs show no signs of slowing in the near future. Hewitt projects Health Care costs will jump another 9.9 percent in 2006, amounting to more than $11,000 per family (of which the company will absorb more than 60 percent of costs).  Greater than nine of 10 members of management see increasing Health Care costs as a weighty company concern that their company needs to address.26

The current Health Care climate represents an ideal opportunity for employers to reevaluate their Company Wellness  offerings and consider the more systemic approach of a robust Company Wellness . Despite the big number of employers that claim to offer disease management or Company Wellness  activities, as of 2005 only 23 percent of workers were eligible for Company Wellness Programs and only 13 percent were provided access to a fitness center through work.27 This is despite evidence that nearly two-thirds of workers would be open to company-provided HRAs and enrolling in programs that encourage healthier lifestyles.28

Company Wellness Programs are a chance for employers to differentiate themselves from competitors by increasing productivity, cutting costs and establishing a healthier work environment that is valued by current and prospective workers. Nearly onethird of workers polled in a 2004 study by MetLife given benefi ts as an important reason why they decided to work for their company and 38 percent said it is among the top reasons they remain at their work.29 Gary Grates, global director of Edelman’s Change and Employee Engagement Group, notes, “The return on investment in a Company Wellness  extends well beyond monetary Health Care savings. These programs can play a essential role in creating a more engaged workplace environment where workers are aligned with company objectives. Company Wellness Programs can represent more than a human resources initiative, they can be a bold symbol of what you as a company stand for.”

To date, employers have viewed Company Wellness Programs as merely another benefit to be managed by the human resources department. However, executives, and their employers, would be better served by adopting a more strategic and integrated approach to Company Wellness Programs. Companies that are able to develop Company Wellness Programs based on sound measurement, work within existing regulations, and involve workers around initiatives, will reap valuable rewards in terms of cost savings and long-term strength.

Following cost, poor employee program engagement and inadequate talks and support are listed as the greatest challenges for employers administering any health benefi t program.22

By law, employers are required to explain any benefits or explicit conditions of employment to all workers – this is called “due process,” and it usually takes the form of a packet of information that new workers are asked to review and sign during orientation or, in the case of existing workers, a brief communication during open enrollment periods.

Companies that only engage in the minimally required due process communication of a Company Wellness , however, do a disservice to the initiative and the company.

Opinions about Health Care in employers represent one of the largest disjoins between management and workers. In discussing the need for savings, most employers (70 percent) believe their company effectively communicates about rising Health Care costs, while only 34 percent of workers feel rising Health Care costs effect their business’ ability to succeed.23 When it comes to conduct, 74 percent of employers believe their workers ought to be held largely accountable for improving, managing and maintaining health, yet only 4 percent of employers think that workers engage in these activities.

Under the proposed rules, the four requirements to be a bona fide Company Wellness  are:

- The total reward that may be given to an individual is limited. The departments invited comments on the appropriate level of the reward, suggesting that a limit of 10 percent to 20 percent of the total cost of employee-only coverage may be appropriate.
- The program must be reasonably designed to promote great health or prevent disease for people in the program.
- The reward must be available to all similarly situated people. More specifically, the program must allow any individual for whom it is unreasonably diffi cult due to a medical condition to meet the Company Wellness  standard (or for whom it is medically inadvisable to attempt to meet the Company Wellness  standard) an opportunity to satisfy a reasonable alternative standard.
- All plan materials describing the terms of the program must disclose the availability of a reasonable alternative standard.
Source: United States Department of Labor Employee Benefits Security Administration

As Northwestern Memorial’s Kathryn Krivy says, “The most fundamental failure in any Company Wellness  is not communicating. You need to tell people what you’re doing and why you’re doing it. You have to get workers engaged and teach them of what’s going on.”

A properly implemented Company Wellness  is designed to save a company more money with improved participation. However, a company must match its focus on program design with an equally strategic investment in efforts to engage workers in the initiatives.

Lay out your case – Despite widespread recognition of rising Health Care costs, workers remain skeptical that the concern affects company operations. In fact, only 53 percent of workers even believe what their company communicates about the subject.24 Companies need to be more candid and forthcoming about the amount they spend on Health Care and how that relates to larger budgetary constraints and potential investments.

Says Motorola’s Saenz: “We share with workers that we have been able to maintain Motorola’s Health Care spend trend below national average over the past several years due to their participation in our various Company Wellness Programs. This transparency is necessary to keep reminding people the reasons for our conduct.”

An effective strategy is to focus on the cost savings and central health benefi ts to the employee and not the company. By personalizing the information in this way, it creates a win-win scenario instead of presenting the program as a sacrifi ce on the part of the employee. Information ought to be presented through multiple channels, constructed in a way that makes sense to all levels of workers, and provided to workers, dependents and retirees.

Make it your own – Every Company Wellness  will be different, and ought to reflect the culture of a company. While program areas will be determined by analyzing employee health risks, the actual offerings ought to be shaped by the nature of the company. Younger, more active employee communities may be attracted by different programs than an older or technicaloriented employee. In Addition, a global company with mobile workers will have different needs than a company with one central location.

As noted earlier regarding PepsiCo’s HealthRoads, one strategy is for employers to brand their Company Wellness Programs. Union Pacifi c Railroad (HealthTracks), General Motors (LifeSteps) and Caterpillar (Healthy Balance) all adopted this approach to help create recognition and a larger meaning around their efforts. Having a branded initiative helps workers and other stakeholders see the larger objectives of the Company Wellness , instead of focusing on isolated offerings.

Say it loud, say it proud – As a potential cost-saving initiative, Company Wellness Programs ought to be given the same executive support and internal commitment as any comparable company effort. Companies ought to not approach wellness as simply a preventive, financially-motivated program, but rather as an opportunity for the company to distinguish itself and become more competitive.

Jeffrey Treem, analyst, Edelman Change and Employee Engagement Group, says that effective communication about Company Wellness Programs ought to be integrated into existing company communication channels and vehicles. “This comprises executive communication to external stakeholders,” he notes, “because this sends a powerful message back to workers about the significance of the programs. Company Wellness Programs ought to not be treated as merely an additional employee perk, but rather an innovative and strategic effort to decrease costs and create a healthier work environment.” Talk among yourselves – The most powerful champions of any Company Wellness  will be the participants.

Companies ought to discover ways to facilitate discussions about the program among workers. This could take the form of support groups, interactive media and the sharing of success stories.

However, since Company Wellness Programs touch on potentially private health issues, it is valuable communication remains positive and inclusive, while not pressuring workers. Discussion of wellness issues ought to be voluntary, though employers may consider providing incentives/rewards for those willing to contribute. Motivation and information from peers is likely to carry more credibility and significance than messages from management.

A more modern and systemic solution may involve employers starting Company Wellness Programs, which allow employers to be proactive in preventing disease and promoting healthier lifestyles for workers. When implemented effectively, this approach can drive to decreased direct costs from claims, a reduction in Health Care premiums and increased employee productivity.

Yet while Company Wellness Programs potentially offer employers substantial cost savings, the success of the programming is dependent upon the ability to involve workers in them. In Addition, employers must navigate the legal and cultural challenges posed by Company Wellness Programs: Companies must be careful that initiatives respect protected classes and the privacy of workers. Additionally, employers must battle resistance from workers wary of their company regulating off-the-clock conduct.

Over the next 6-12 posts we’ll layout the case for Company Wellness Programs in today’s employment environment, arguing that the cost savings and raised employee program engagement outweigh potential restrictions. We will analyze the considerations a company must make before starting a Company Wellness  and the communication necessary to create successful engagement from workers. Finally, we will discuss several successful Company Wellness Programs and supply a list of resources that employers can use for guidance.

It is apparent to virtually every American (especially those of us in business) that medical care costs are skyrocketing out of control. No one doubts that either the market will solve the concern OR the government will impose one on us. Managed care has failed from either a cost containment or quality of care perspective. Companies have reached the point where the cost of offering health care insurance is almost as burdensome as government regulation. It’s time for some new thinking on medical care and its impact on business and vice versa. “Corporate wellness” as an operational perspective instead of merely window dressing is one way to deal effectively with rising medical care costs.

The Insurance Issue

The first step in solving the concern is to realize that an employee’s health is their own responsibility. Expecting employers to offer unlimited health care insurance coverage is simply unrealistic and unreasonable. It’s time for employers (on a broad scale) to reconsider their role in offering health care insurance coverage. Instead of offering complete coverage for all workers through group plans, employers ought to begin to modify the burden of health coverage to those covered.

Here’s the approach. Provide catastrophic health care insurance as a group benefit to all workers with a big enough deductible (say $5000 per employee) to make the cost affordable for the company. Then, allow workers to buy their own health care insurance policies (based on their own needs) and pay for them through payroll deduction with pre-tax earnings. There are numerous insurance employers that sell individual plans on this basis. Everybody wins. Workers can tailor their coverage to their own needs and circumstances using their own doctors. Companies win by stopping the endless cycle of rising costs and ever-changing plans. And when people become responsible for the cost of their own insurance, they become more attentive to their own health. Besides, if an employee is interested in working for you ONLY because your company offers great insurance benefits aren’t they telling you they’re going to cost you more money in the future?

Establish a “Wellness Culture”

Our current “sickness culture” perpetuates the medical care crisis and hastens the demise of market-based solutions. By sickness culture, I mean our focus on health problems instead of on having a healthy workplace and performance culture.

So, what would a “wellness culture” look like? First, instead of paid sick days, workers might be rewarded at year’s end with an attendance bonus. Workers would be reimbursed for efficacious completion of smoking cessation and weight-loss programs. Companies would invest in corporate memberships at local health clubs so every employee can take part. Workers would be provided in-house wellness programs on a variety of problems ranging from ergonomics to stress management. Finally, employers would commit to hiring and retaining healthy workers. Simply put, healthy workers cost less and are more productive than unhealthy ones. Applicants ought to be screened for health habits and practices that limit their productivity and improve the likelihood of future expense. While this may seem harsh, it rewards those workers whose personal lifestyle and habits be sure the best Return on Investment by the company committing to hire, train and pay them.

Be open to “alternative and complementary” approaches

Studies published in primary medical care journals reveal that people who use “alternative and complementary” health modalities (including chiropractic, acupuncture, yoga and massage) are generally healthier, better educated, take fewer medications and miss fewer days from work than the average American. Since these people look for ways to stay healthy without drugs and surgery, they end up being a net benefit in terms of attendance and productivity. Old prejudices in this area ought to be discarded in order for employers to better productivity and improve profitability

Conclusion

Health Care costs are growing at a staggering pace. Managed care is an abysmal failure. Companies are buckling under the pressure of offering health coverage to their workers. American competitiveness in the market is sagging. These times call for extraordinary solutions. It’s time for American employers to consider some out-of-the-box solutions to the medical care crisis. Business wellness is an approach that is timely, achievable and reasonable given the alternatives. All options ought to be considered while we still have a chance.