How to make wellness work

Originally posted May 29, 2014 by Andy Stonehouse on

For all the talk of the benefits of onsite wellness programs – in both the healthier, more productive lives of workers, as well as the presumed employer cost savings as sickness, injury and absenteeism are reduced – are American companies really getting the most out of their wellness dollars?

A new EBN survey, which drew responses from 245 benefits managers, administrators and human resources professionals, finds that wellness programs work best when employee incentives – be they cash or decreases to insurance premiums (or penalties for not achieving goals) – are clearly established. But meeting wellness objectives, be they cutting costs, increasing employee productivity or lowering on-the-job absences, remains a struggle, and companies who’ve implemented wellness programs say they sometimes find it difficult to justify the investment in those costly ventures.

Wellness programs, as a result, are still on the “to do” list of many respondents; only 44% are currently running a wellness initiative, with more than a third either thinking about or almost ready to roll out a program of their own. A lack of benefits/HR managerial resources and the challenging nature of showing the financial justification for wellness’s costs are the biggest factors holding them back, according to the survey.

Among those who’ve actively adopted a wellness program at their workplace, the results are largely positive, but not breathtaking. Just 5% of respondents say they’ve completely met their top objectives – cost savings and cost avoidance – though 53% say they’ve “somewhat” met those goals and a third say they’ve achieved “a little” of that goal. The same goes for other top goals – improving employee health and longevity, and enhancing employee engagement and participation – with respondents reporting only mid-level success, at best.

Respondents said they personally had far less interest in using wellness to increase employee retention and satisfaction, reduce absences or increase overall productivity. “Turnover is an issue in our industry; spending money on wellness for people that leave hurts the ROI on wellness,” one respondent added.

What works

In order to make wellness successful, those who’ve set up and retained a program say that it’s critically important to offer easy-to-use wellness educational tools for employees. This is a much easier task to accomplish, they say, than objectives such as transforming their workplace culture into one centered on wellness, or getting employees engaged in wellness offerings.

But there are still plenty of success stories, and examples of what helps to get workers fully engaged. “A culture of wellness and associate programs requires a long-term commitment,” one respondent noted. “We are beginning to see results after only two years in effect.” Most of those with positive wellness outcomes say they’ve used incentives to help push participation in their programs, with almost half offering cash or gift cards and 40% offering health insurance premium discounts … or penalties, on the other side of the coin, for employees who do not take part.

Survey participants offered their opinions on the vendors that they work with; according to the results, the top five wellness partners include Cigna Behavioral Health, WebMD Health Services, HumanaVitality, OptumHealth Care Solutions and Alere Health Improvement. The various units of Blue Cross/Blue Shield are also important strategic partners for many companies. Interestingly enough, 19% of those respondents with wellness plans in place admitted they did not work with a specific wellness vendor at all, opting to do the heavy lifting of implementing and running a wellness program on their own.

Wellness’ saturation also appears to be directly connected both to the type and the size of business respondents are engaged in. While office-based workplaces such as banking and financial services, plus health care – rife with potential health issues among sedentary workers – make up the largest percentage of those taking the survey, manufacturing and industrial worksites are also important settings for wellness programs. More than 65% of our respondents work with employee populations of 1,000 or fewer, almost a third in companies less than 100.

The survey’s results echo the experiences of benefits managers such as Katie Sens, director of human resources for Chemprene, a small manufacturing firm in New York’s Hudson Valley. Sens oversees the wellbeing of about 115 employees, and says that like many workplaces across the country, those involved in daily physical labor out on the manufacturing floor tend to be in better shape than the company’s desk-bound workers.

“We’ve tried to create interest by offering gym memberships, but we had problems with our health insurance providing coverage,” she says. “But we’ve been inspired by our boss, who walks every day and has lost about 75 pounds in the process, so we worked out another arrangement with Gold’s Gym – we’ll pay if they go eight times a month.” In addition to standard wellness pushes such as smoking cessation and flu shots, Sens says her company has partnered with online weight loss and nutrition and lifestyle coaching provider Retrofit, paying half of employees’ costs up front and hosting group programs.

“Our boss is aboard, I’m in it, as are several other managers and their sponsors, hoping to lead by example,” she says. “Now I’m getting a lot more questions about the program, and certainly raising awareness.” As for ROI on Chemprene’s wellness efforts, Sens says the company is hoping to achieve a better bottom line for its health insurance costs, which she and management will be keeping a close eye on as the wellness programs develop; their efforts are too early to tell, she admits.

Offerings matter

Employee participation in our survey respondents’ wellness efforts also greatly varies by the complexity of the programs they offered. Overall, the highest participation was experienced in safety and injury prevention programs – more than half of respondents said the majority of their workers took part, followed by health screenings (including biometric tests, flu shots, health risk assessments and on-site health clinics), with at least 50% of employees taking part. Significantly less participation was noted in awareness, education and support programs, stress relief efforts and disease management programs; in workplaces where direct physical activities were offered, the majority of respondents said that less than 50% of their workers took part.

Teisha Haynes, global benefits supervisor for international oilfield service company Halliburton, continues to work to find productive and cost-efficient wellness options for her 35,000 U.S. employees and 75,000 dependents, spread out at 104 worksites across the country. Haynes says that the teamwork atmosphere among the company’s largely laboring workforce can actually be beneficial, when it comes to getting workers more actively engaged in physical activity.

“We realize that our employees like to work in teams and compete, so we have implemented a number of physical activity challenges that allow them to work together and compete against other business units for not only bragging rights, but a donation to the charity their select,” she says. “We have had participation from the executives, all the way down.”

For Halliburton, many larger worksites now include an on-location physical activity coordinator (“wellness champions”) to help provide compatible, healthy exercise, even for those employees not necessarily dragging pipes on an oil rig. Those coordinators are tasked with figuring out what works best in their local environment – and what vendors can provide the best services at annual wellness fairs, be they biometric screenings, heart health clinics, mammograms, or exercise programs (Red Wing Shoes, for instance, has helped with foot health assessments at various locations).

Do the efforts pay off? Haynes says measuring the investment in wellness can be a challenge, though the company is moving to quantify things more clearly by comparing claims numbers and data from health risk assessments. “We get some positive signs, like ‘employees are feeling better,’ but that produces pretty fuzzy numbers, so we’re thinking of working with Truven’s health analytics database to get more solid results,” she says.

Among those companies that are reluctant to implement a wellness program, common impediments emerge: 46% say that wellness is simply not a priority for them now, while 20% of others say that they lack the staff resources and time to help establish a wellness system. More often than not, they admit they are “still questioning whether we need one or not,” as well. As a result, a quarter of those still on the fence about wellness say it will be at least a year, if not two, before they’re able to get underway with a full wellness push.

Those who have yet to start up their own wellness program say they are primarily frustrated by a lack of time and resources to do so, as well as the financial costs involved in both start-up and administration of a wellness offering. “Our company is just a year old so it takes time to find out what employees want and will participate in,” one respondent wrote. Others said that their upper management has yet to be convinced of the merits of a wellness program; quantifiying the potential savings, whether they be direct cost reductions or overall decreases in sick leave, remains the biggest stumbling block.

Those cost-related fears may not be unfounded: 40% of survey participants who formerly had a wellness program but have abandoned those efforts say they did so primarily for financial reasons, as well as out of concerns of issues of employee privacy or anti-discrimination laws. Some changed health care providers or lost a partnership with their wellness vendor, as well.

As a more successful alternative, some survey respondents say they have worked to establish very specific objectives for their wellness programs, working with wellness vendors to find the right fit. Dale Johnson, employee benefits manager for the city of Cary, N.C., says that involved developing an innovative functional movement screening – not unlike those used in professional sports – to better understand the musculoskeletal strains of an aging workforce engaged in medium to heavy physical work, and use exercise and better day-to-day techniques to reduce strain and injuries. Johnson says the holistic program, developed with the input of research from nearby Duke University and initially implemented with the city’s public safety employees, resulted in a tangible negative trend in health care utilization and costs.

“The jury’s still out on the long-term impacts of the program, but we’re now considering expanding it to our employees in public works and utilities,” Johnson says. If this variation of a wellness program can significantly cut costs, Johnson says it could be a very positive sign that focused wellness efforts pay off.

Fast-rising medical ID theft hits employers hard

Originally posted May 22, 2014 by Alan Goforth on

About the last thing companies dealing with the complexities of implementing Obamacare need right now is to have the security of their employees’ medical information compromised. However, statistics show that is exactly what is happening.

“Medical identity theft is a rapidly spreading malady, often by organized-crime rings,” said James Quiggle, spokesman for the Coalition Against Insurance Fraud, a nonprofit alliance of carriers, consumer groups and government agencies in Washington, D.C. ”Data breaches in this era of digital record-keeping can drain businesses and make employee records as vulnerable as patients.”

More than 1.8 million Americans were victims of medical identity theft in 2013, a crime that is increasing at an annual rate of 32 percent. This makes it the fastest-growing type of identity theft, according to the Identity Theft Resource Center in San Diego.

Medical ID theft is already a multibillion-dollar industry. For the fiscal year ending Sept. 30, 2013, the federal government alone recovered a record $4.3 billion from people and companies that attempted to defraud health-care programs, according to the U.S. Department of Justice and the U.S. Department of Health and Human Services.

Stealing enough personal information to purchase services or devices is not difficult for a sophisticated identity thief, said Drew Smith, founder and CEO of Scottsdale, Ariz.-based InfoArmor (pictured at left). His company has provided B-to-B clients with protection against various types of ID theft since 2007.

“You can go online and readily purchase someone’s basic identity information for about $50,” he said. “You usually don’t need a lot of identification to receive medical care. Most identity thieves are not using it for primary care. It’s going for things such as medical devices, prescription drugs or other areas where there is less likely to be a personal relationship with the provider.”

Hidden employer costs

Statistics rarely account for the hidden cost of lost productivity when an employee has been victimized. Dealing with the fallout can be a painstaking, time-consuming process. The average medical identity theft loss is $22,346 – six times higher than financial identity theft. Also, on average, it takes victims more than a year to clear up medical records and repair any damage to their credit.

“Employees have to deal with identity theft issues immediately, which requires time off work and lost productivity, because some banks and agencies may be open only on work days,” Smith said. “Most medical ID thefts go undetected for a year. It’s not like credit card fraud, where you usually are notified quickly if someone tries to use a stolen card. Because of the way medical records are stored, they are extremely fragmented and hard to fix when you find out. That’s why reducing the risk of medical identification theft can help a business’s bottom line.”

Employers may be surprised to learn that medical identity theft may be as likely to occur from within their organization as from outside.

“Fifty percent of medical ID claims are considered `friendly fraud’,” Smith said. “For example, an employee’s brother may be out of work and they allow him to use their insurance card, or a family member borrows it without permission.”

Best defenses

Although eliminating medical ID theft may be impossible, businesses do have effective options to significantly reduce risks and quickly detect breaches. “Managers must implant internal controls and train employees to harden their protection of personal data,” Quiggle said. “Protocols to protect against insider theft are especially important.”

One of the most successful defenses costs nothing to implement.

“The No. 1 thing to emphasize with employees is to be smart about their user names and passwords,” Smith said. “Many people use the same ones for multiple sites, such as health care, banking and payroll information. Identity thieves are pretty adept at stealing credentials and often use them to steal from more than one account.”

Early notification of security breaches also is critical. “Timeliness is key,” he said. “Most explanations of insurance benefits don’t come for 30 to 90 days, but we can provide real-time alerts.”

Companies such as InfoArmor can provide several levels of protection. “The entry level (service) is monitoring personal and insurance carrier information,” Smith said. “We can alert employees daily to a potential compromise of their information online.”

The next level is to search the Internet and other networks for employees’ potentially exposed medical information that may be bought or sold. InfoArmor’s service providers also evaluate medical professionals who submit claims.

“We are able to do scoring behind the scenes to identify doctors with a record of fraudulent claims who may present a high risk,” Smith said. “Finding these fraudulent doctors often is like looking for a needle in a haystack, but we can help make the haystack much smaller.”

InfoArmor is testing a new service that it calls ID Verification, which uses information from dozens of public record databases to enable providers to confirm a patient’s identity before services are administered.

“The newest services are the most employee-focused,” Smith said. “We can determine which employees have a greater inherent risk and monitor their claims data daily. We look for certain flags, such as care being received farther from home, durable medical equipment being purchased in their name or a high volume of paperwork over a short period of time. We then can issue an alert. And we are careful to do everything in a HIPPA-compliant manner.”

Smith said it is still too early to judge the potential impact of the Patient Protection and Affordable Care Act (PPACA) on the incidence of medical identity theft. But for employers seeking ways to reduce medical identity theft and its repercussions on employees, the best offense is a good defense.

“Don’t believe people who try to tell you they can prevent identity theft, because they probably are lying,” he said. “Because theft is not going away, the solution is to detect digital crimes faster.”

Health plan costs moderate, but larger increases ahead

Originally posted May 15, 2014 by Dan Cook on

The rate of employer-provided health care plan costs is either going up or down this year, depending on who you talk to.

Either way, the difference won’t be much. And overall, the news is good: cost hikes are fairly stable.

Towers Watson and Buck Consultants this week each released their own projections for employer health care spending for 2014. Towers Watson surveyed 173 medical carriers from around the globe; Buck got input from 126 carriers and administrators.

Want good news? Look to the Buck survey. It says the rate of increases in all types of health plans will be less in 2014 than in either of the two prior years.

Costs for PPO plans, it said, rose 8.7 percent this year, lower than last year’s 9 percent growth and the 9.2 percent seen in 2012. HDHPs show the biggest decline in cost increases, rising 8.6 percent this year compared to 9.1 percent in 2014. HMO and POS plans fell as well. For plans that supplement Medicare, though, the health-cost hike spiked to 5.5 percent from 4.1 percent last year.

The average prescription-drug cost increase for this year is 9.2 percent, down from 9.9 percent a year ago.

Buck said reduced utilization was cited by some as the primary reason for the decreases.

“This may be a result of the economic slowdown and its impact on consumers’ willingness to seek medical treatment,” said Harvey Sobel, a Buck principal and consulting actuary who co-authored the survey. “Even though the decline is good news, most plan sponsors still find 8-9 percent cost increases unsustainable.”

Meanwhile, if you’re a pessimist, Towers Watson is for you.

After two years of 9.1 percent increases, non-U.S. American plans (North American plans outside of the U.S.) are projected to rise in cost by 9.7 percent this year, its respondent said.

Globally, Towers Watson’s survey indicated that employee health benefits costs will increase 8.3 percent this year, compared to 7.9 percent last year and 7.7 percent in 2012.

Further, its respondents expect costs to start to edge up again in the future.

“More than half (55 percent) of insurers in all regions anticipate higher or significantly higher medical trend over the next three years. Asia Pacific insurers are particularly pessimistic, with more than two-thirds (69%) saying they expect medical trend in the next three years to be higher or significantly higher than current rates,” the study said.

“While the cost of providing health care benefits to employees has stabilized over the past few years, controlling rising costs remains a significant concern for employers worldwide,” said Francis Coleman, director, International Consulting, at Towers Watson. “In fact, in all regions, health costs continue to rise at twice the rate of inflation. That’s a major concern for employers, with many insurers projecting costs to again escalate in the coming years.”