by Don R. Powell
Wellness programs have proved to be an effective tool to use in reining in health care costs. This author describes successful wellness programs and shows that these programs not only improve the bottom line for employers or Taft-Hartley funds, but they also help employees feel better about themselves and more positive about the organization they work for.
Plain and simple, today's health care costs are too high. U.S. health care costs constitute some $1 trillion, about 14%, of the gross national product. This came out to an average per employee cost of $3,900 in 1997. Costs are expected to double to about $2 trillion by the year 2007. But it should come as no surprise that we are spending a lot on health care because we know that health care premiums have gone up over the years. The cost to treat heart disease and cancer has escalated, emergency room treatment is expensive, and medication costs have skyrocketed. In fact, over 50% of corporate profits now go for health care costs versus only 7% three decades ago.
Changes in Benefits
Companies are not passively accepting these rising health care costs, and many have reduced benefit levels as a way to deal with them. Nineteen percent of organizations have increased cost sharing for health care, 55% require hospital coverage contributions, 49% require health insurance contributions, 47% have raised their deductible over $100 and 73% require employee contributions for dependent coverage. (See Table I.) We have also seen an increase in the offering of wellness programs as a way to deal with rising health care costs. Ninety-one percent of organizations now have some type of health promotion program in place versus only 78% a decade ago.
|Employer Reductions in Benefit Levels
|19% have increased cost sharing
|53% require hospital coverage contributions
|49% require health insurance contributions
|47% have raised a major medical deductible over $100
|73% require employee contribution for dependent coverage
Source: Hay Huggins Benefit Report, 1996.
Cost Benefit of Wellness
There are data to justify the benefits of health promotion. Scores of studies have documented reductions in absenteeism and health care costs when wellness programs have been implemented. There is also research that quantifies the costs associated with employees who exhibit unhealthy lifestyles. A study conducted at Steelcase Corporation by the University of Michigan determined that for every Steelcase employee who had excessive alcohol consumption, the company paid $597 more per year in health care costs. For every Steelcase employee who was sedentary, the company paid $488 more. For every Steelcase employee who had hypertension, the company paid $327 more. Smokers cost the company $285 more, etc. A similar study was conducted at DuPont and, although the dollar values associated with each risk factor differed from what Steelcase found, there was collaboration on the fact that unhealthy employee lifestyles cost the company more in health care costs. (See Table II.)
|Costly Health Risks
|Steelcase Study Increased Cost
||DuPont Study Increased Cost
|Excess alcohol intake
|High blood pressure
||Excess alcohol intake
||High blood pressure
|Inadequate seat belt use
||Inadequate seat belt use
Sources: University of Michigan, 1992. DuPont Corporation, 1993.
The Most Common Programs
The types of wellness programs that can be offered to Taft-Hartley plan members and corporate employees can vary. Based upon government statistics, the most common health promotion programs at worksites are listed in Table III.
|Most Popular Wellness Programs
||% of Worksites Offering
|Alcohol and substance abuse
|Mental health programs
Source: William M. Mercer, Incorporated Survey, 1996.
How Programs Are Evaluated
There are a number of ways organizations evaluate their wellness programs. Many organizations are content to evaluate their programs based upon participation alone. In fact, 74% of all programs look at participation as a key factor. Others look at employee comments on the programs. Only about half of organizations actually look at hard core data such as reduction in health care costs. Changes in lifestyle behavior-that is, the percent of people who quit smoking or reduce their cholesterol-are also measured. Finally, absenteeism is measured by the fewest number of organizations. (See Table IV.)
|How Programs Are Evaluated
||% of Worksites Using
|Changes in lifestyle behavior
|Reduction in health care costs
|Decrease in sick days
Source: William M. Mercer, Incorporated Survey, 1996.
Employees' Health Status
Researchers have looked at a large number of employee populations to determine the most common health risks. On the average, for every 100 workers in this country, 27 have cardiovascular disease, 24 have high blood pressure, 50 or more have high cholesterol, 26 are classified as being obese, 26 smoke, ten are heavy drinkers, 60 don't wear seat belts regularly, 50 don't get adequate exercise, and 44 suffer from excessive levels of stress. (See Table V.) Obviously, employee groups differ based upon their demographics. If you have employees with a low education level, a different racial mix, a different age group, more women than men, etc., your employee risks will differ. You can use these data, however, as a guide for determining what types of risks your employees may have and what programs to offer.
|Risk Factors for Every 100 Employees
- 27 have cardiovascular disease
- 24 have high blood pressure
- 50 or more have high cholesterol
- 26 are overweight by 20% or more
- 26 smoke
- 10 are heavy drinkers
- 60 don't wear seat belts regularly
- 59 don't get adequate exercise
- 44 suffer from stress
Source: U.S. Department of Health and Human Services, 1993.
Components of Wellness Programs
First and foremost, you need to look at health promotion as a process that involves a variety of activities rather than a one-time event. The programs that tend to show the greatest return on investment involve four major components.
Assessment helps determine how unhealthy or healthy your employees are. This can take the form of a health screening where people get their height, weight, cholesterol and blood pressure checked to help employees learn about their health risks. It can also include a computerized analysis called a health risk appraisal (HRA). This consists of a confidential questionnaire that asks employees how often they smoke or drink alcohol, how much they weigh, how tall they are, if they have a family history of heart disease or cancer, etc. All of this information is then compared to other people of the same age, race and sex, as well as mortality data. This comparison will tell employees how likely they are to die of cancer, stroke, heart disease and seven other major illnesses ten to 20 years in the future. Many HRAs will also compute a health age versus an actual age. For instance, a person may be 48 years old, but because he or she lives a very healthy lifestyle, that individual's health age may be that of a 37 year old. On the other hand, an employee may be 43 years old, but because he or she lives a very unhealthy lifestyle, that individual's health age may be 62. The advantage to employees is that the HRA quantifies this abstract term called lifestyle and may motivate them to improve their health. Management receives a summary report that includes aggregate information about the entire employee population so it knows what health risks its employees face.
Communication materials are very appropriate for multiemployer organizations because it is difficult to reach employees working at different worksites. They can include publications such as newsletters, paycheck stuffers, posters at the union hall and table tents in the cafeteria. Communication with workers about wellness must be done on an ongoing, consistent basis to be effective.
Self-help interventions are also very appropriate for Taft-Hartley funds. The field of health promotion has become very sophisticated in helping people help themselves. An advantage of self-help is that employees can change their behavior on their own time and in the privacy of their own homes. Examples include interactive videos, CD-ROMs, computer programs, audiotapes and booklets. Several wellness vendors provide toll-free counseling for employees who are trying to quit smoking, lose weight or manage stress on their own. Results can be quite impressive. A study conducted at Ford Motor Company by the American Institute of Preventive Medicine demonstrated a 45% quit rate for 622 hourly and salaried employees who participated in a self-help smoking cessation program. Every Ford employee was able to request a self-help kit and, as part of the materials, employees were given a toll-free number so they could speak with a health educator any time they had questions or problems with quitting. The advantage of self-help is that you can reach employees who are unwilling or unable to attend a group class.
Group programs are actual classes conducted by an instructor who comes onsite to a union hall or workplace. Instructors may come from a local hospital or university, or somebody in a company's medical or benefits department may be trained to put on the classes. Group programs allow for interaction with a professional and other attendees. Unfortunately, it has become more difficult to get people to attend classes. We live in a time-deprived society where everybody is on the go. People don't have the time to devote to the five one-hour sessions of a stop smoking program or the 16 weekly sessions of a weight loss class. This is not to say that classes shouldn't be offered, but you might find greater employee participation with self-help programs and communication materials.
Offer Programs With Short-Term Benefits
It's important to help people quit smoking, lose weight and lower cholesterol to reduce the risk of heart disease, cancer and stroke. Unfortunately, the financial benefits for those lifestyle changes do not occur for ten to 20 years down the road. An organization would not receive a financial savings for some time. By offering programs with short-term benefits, Taft-Hartley funds can see an economic return within six to 12 months. This doesn't mean that you should ignore lifestyle behaviors that can reduce major illnesses, but rather you want to supplement those interventions with ones that have more immediate benefits. These include programs to increase seat belt usage, enhance consumer education, improve prenatal care and manage disabilities.
Teach Medical Self-Care
Medical self-care represents one of the most promising ways to reduce health care costs. This is in light of the fact that in 1996 there were approximately 735 million visits to physicians in this country. That comes out to 2.8 visits for every person in the United States. According to surveys, about 25% of these doctor visits are unnecessary. That's 184 million doctor visits that didn't need to take place. When you look at the average cost of a doctor visit in this country being $50, not counting any tests that may be given or medications prescribed, you begin to see where billions of dollars are spent unnecessarily on physician visits alone. We also see a similar phenomenon with emergency room visits. There were 90 million emergency room visits in 1996. Fifty-five percent of them, or 50 million visits, were deemed unnecessary by the American Hospital Association. The average emergency room (ER) visit costs about $350; thus once again you see a great deal of health care expenditures that didn't need to take place.
Medical self-care consists of teaching employees to become wiser consumers of the health care system. They learn when to seek professional assistance for health conditions that warrant it and when to use medical self-care for those symptoms that can be treated at home. We need to empower employees to make better health care decisions as many don't know what to do when they have various symptoms, such as a fever, sore throat or earache.
So what can we do to avoid unnecessary utilization? There are five elements of a self-care program.
First and foremost is the use of a self-care publication. The guides answer four basic questions:
The publications are relatively inexpensive and range in price from $2 to $5 depending on quantity and how comprehensive the guide is. They can be customized with names and logos, a letter from the trustee or administrator, etc. You can even change the medical problems in the guide. For instance, BlueCross BlueShield of Massachusetts had a self-care guide designed that was based upon the most common health problems subscribers experience.
- What is a real medical emergency?
- When do I need to consult a physician?
- Can I treat this illness myself?
- What self-care procedure should I use?
Most organizations will mass distribute a self-care guide. Others offer workshops to their employees at which time a guide is given out and the benefits of medical self-care are presented. Studies show that about 75% of people who receive a self-care guide will use it at least one time within six months. About 21 million families have a self-care guide in their homes.
Nurse Advice Line
Another aspect to a self-care program is the use of a nurse advice line. Employees can call a toll-free number 24 hours a day, 365 days a year and speak to a registered nurse. The nurse can address many of the things that are contained in a self-care guide. There is the added assurance, however, of speaking to a health professional. These types of nurse advice lines cost about $10 to $12 per family per year. They do not get the same use a self-care guide does as only about 10% of the people with access to the service will call it. About 26 million families are covered by a nurse advice line.
We are seeing an increase in the use of self-care software. Self-care information can be put on Web sites, company intranets, networks and workstations. The same type of self-care information that is in a book can be downloaded by employees. The advantage of software is that it can be updated on a periodic basis.
It is important to remember that medical self-care, like wellness, is a process, not an event. It doesn't end with the distribution of a self-care guide or notifying employees about a nurse advice line. A self-care program needs to be reinforced through ongoing communications so that people are constantly reminded that they have a self-care book on their shelves, a toll-free number they can call or software to download. Communications can consist of monthly or quarterly mailings to the employee or notices at the union hall to constantly reinforce the concept of medical self-care.
Of all the wellness areas that have been researched, medical self-care appears to provide the most consistent return on investment (ROI). The American Institute for Preventive Medicine has seen savings of $21 to $90 in 13 consecutive studies. (See the figure.)
HealthyLifeŠ Self-Care Evaluations # of Savings/Person in Dollars
|Western Southern Life
|Capital Blue Cross
|Capital Blue Cross
|Florida Hospital- Children's
|York Health System-Seniors'
Source: American Institute for Preventive Medicine.
Address High-Risk Employees
Employees who have chronic conditions, such as diabetes and asthma, are considered to be high-risk employees. They tend to have health care costs that are about 100 to 500 times greater than the costs for healthy employees. It is important to provide a general wellness program to reach all your employees, but it is also important to reach high-risk employees since they represent a great cost. They may also be the people who are most resistant to changing their lifestyle or participating in your wellness programming.
Other Suggestions Include Mental Health
Wellness is not just from the neck down. Psychological issues must also be addressed. A self-care guide for mental health issues can be distributed so people can make better decisions about when to contact their company's employee assistance program (EAP) or a private therapist. Low self-esteem is a problem for many individuals, and programs can be offered in this area. Social support is also critical. A study at the University of Michigan found that socially isolated adults are at as great a risk of developing heart disease as cigarette smokers. Classes for anger management, depression management and even laughter are all being offered at worksites to address the psychological component of health.
Provide Proper Materials
It is very important that the wellness materials you give to your employees are appropriate. They must be written at the correct reading level for your population. There should also be ample white space, a big type face and culturally diverse illustrations.
The use of incentives to encourage people to change their lifestyles has become popular. Approximately 39% of companies offer either an incentive or a disincentive to motivate employees to improve their health behavior. Generally, it is better to reward employees for healthy behavior rather than punish them for unhealthy behavior. Incentives may take the form of charging less for plan contributions, offering lower coverage levels, providing reimbursement for wellness programs, giving premium discounts to employees who engage in healthy lifestyles and giving gifts, such as t-shirts, water bottles, golf equipment, etc., to those who participate in wellness programs. Incentives/disincentives to decrease tobacco use are the most common and are used by 84% of employers that offer incentives.
Keep Programs Current
The field of health promotion is changing. Our knowledge of how to motivate people and help them change their behavior has increased. Whatever type of wellness programming you offer, make sure it is current, accurate and up to date. If you distributed a self-care guide three years ago, it is probably out of date so you might want to consider giving out a new one. If you provided a smoking cessation program four years ago, a new approach may motivate more people to participate.
Involve the Employee's Family
Employees account for only about 30% of health care costs, while dependents account for the remaining 70%. A program that reaches only employees and not their dependents is going to limit reductions in health care costs. That's why communication materials, self-help kits or a self-care guide that go to the home and can be used by the entire family are beneficial. Women also make 80% of the health care decisions for their families. If you are not reaching the female in the home, then you are not getting to an important decision maker.
Use Low-Cost Wellness Options
Health promotion programs don't have to be costly. There are various types of programs that can be implemented for as little as $5 to $10 per employee per year. Some activities don't have to cost anything at all. You could have a weight loss program by simply putting a scale in the union hall and posting a diet plan of the week. Or you could arrange for a competition among employees to see how many pounds they can lose and award a prize to the person who loses the most. A physical fitness program can consist of simply giving people a map that shows a one- or three-mile walk/run around the union hall. Putting in a shower will encourage people to do physical activity on their lunch hour. A stop smoking program can involve a new smoking policy. Ten percent to 15% of smoking employees will quit when smoking is banned at the worksite. A stress management program can consist of easy chairs in a quiet area where people can listen to relaxing music. A nutrition program can involve healthy heart choices in the company cafeteria or replacing potato chips and candy with yogurt and fresh fruit in the vending machines.
Plan for Seasonal Changes and Interest
Wellness programs shouldn't become stagnant. New Year's is a good time to offer health promotion programs. In fact, the two most popular New Year's resolutions are quitting smoking and losing weight. The third Thursday of every November is the Great American Smoke-Out. It is a good time to offer smoking cessation classes. Spring is associated with weight reduction as people want to fit into their bathing suits. Fall is always a good time to offer wellness as people are getting back into a routine after the summer. Organizations can even promote wellness with a holiday. For instance, with Abe Lincoln's birthday, a company could offer a program titled "Be Honest About Heart Disease." Around Halloween, you could offer a program titled "Don't Be Scared of Stress."
Know Legal Restrictions
The Americans with Disabilities Act states that you cannot discriminate against employees based upon physical limitations. A company that has a disincentive for employees with high blood pressure or obesity whose risks are due to a genetic predisposition may face legal action. The way to avoid this is to give a reward to employees who lose weight or lower their blood pressure. Tobacco use is one area where you can offer a disincentive, as it is not considered a physical disability. You can charge a smoker a higher premium and a nonsmoker a lower premium without legal ramifications.
The field of wellness has come a long way over the past 20 years. We now have a good deal of data to justify the cost benefit of wellness. Based upon these data as well as the success many Taft-Hartley funds have already realized from their wellness programs, it is an area that other funds should strongly consider. Not only will it improve the bottom line, but it will help employees feel better about themselves as well as about the organization they work for. -EBJ
Don R. Powell, Ph.D., is president of the American Institute for Preventive Medicine, Farmington Hills, Michigan. He is a participant in the "Healthy People 2000 and 2010" projects, which have set the nation's health goals for the 21st century. Dr. Powell is the author of a number of best-selling self-care books. He is a licensed psychologist who earned his Ph.D. from the University of Michigan.