LEVEL WELLNESS
A recent survey by the Society of Human Resource Management found that 61 percent of companies are offering some sort of wellness initiative this year, up only slightly from 58 percent in 2008. Although wellness adoption by employers seems to have leveled off in the past few years, the elements of the programs have changed. For instance, 45 percent of polled employers said their program includes health and lifestyle coaching, compared with 33 percent in 2008.
Wellness programs could mitigate projected 2013 health care cost increases
By David Morgan
May 31, 2012
Source: https://eba.benefitnews.com
The cost of U.S. health care services is expected to rise 7.5% in 2013, more than three times the projected rates for U.S. inflation and economic growth, according to an industry research report from PricewaterhouseCoopers.
But premiums for large employer-sponsored health plans could increase by only 5.5% as a result of company wellness programs and a growing trend toward plans that impose higher insurance costs on workers, the firm concluded.
The projected growth rate of 7.5% for overall health care costs contrasts with expectations for growth of 2.4% in U.S. gross domestic product and a 2% rise in consumer prices during 2013, according to the latest Reuters economic survey.
Health care costs have long been known to outstrip economic growth and inflation rates, driving up government spending on programs such as Medicare and Medicaid at a time when federal policymakers and lawmakers are wrangling over how to trim the U.S. budget deficit of $1 trillion a year.
But PwC's Health Research Institute, which based its research on input from health plan actuaries, industry leaders, analyst reports and employer surveys, said data for the past three years suggest an extended slowdown in healthcare inflation from earlier decades when annual costs rose by double-digits.
"We're in the early beginnings of a shift toward consumerism in health care. And we think that you'll see more of that in the coming months and years," said Ceci Connolly, the health institute's managing director.
More than half of the 1,400 employers surveyed by the firm are considering increasing their employees' share of health care costand expanding health and wellness programs in 2013, according to the report.
Connolly said health plans with higher deductibles and co-pays for workers tend to dissuade unnecessary purchases and offer lower premium costs for employers, while successful wellness programs can reduce the need for medical services.
The report said prospects for higher growth are also being held back by the consolidation of hospitals and physician practices, insurance industry pressure on hospital expenses, a growing variety of primary care options such as workplace and retail health clinics, price transparency and the increasing use of generic drugs.
Upward pressure on health care costs comes in part from a rebounding economy and the growth of new medical technologies, including robotic surgery and the nuclear medicine imaging technique known as positron emission tomography.
PwC's projection of 7.5% growth is nearly double a 3.9% rise in U.S. health care spending that the federal government says occurred in 2010, the last year for which official figures are available.
Wellness programs could mitigate projected 2013 health care cost increases
By David Morgan
May 31, 2012
Source: https://eba.benefitnews.com
WASHINGTON | Thu., May 31, 2012 12:00am EDT (Reuters) — The cost of U.S. health care services is expected to rise 7.5% in 2013, more than three times the projected rates for U.S. inflation and economic growth, according to an industry research report from PricewaterhouseCoopers.
But premiums for large employer-sponsored health plans could increase by only 5.5% as a result of company wellness programs and a growing trend toward plans that impose higher insurance costs on workers, the firm concluded.
The projected growth rate of 7.5% for overall health care costs contrasts with expectations for growth of 2.4% in U.S. gross domestic product and a 2% rise in consumer prices during 2013, according to the latest Reuters economic survey.
Health care costs have long been known to outstrip economic growth and inflation rates, driving up government spending on programs such as Medicare and Medicaid at a time when federal policymakers and lawmakers are wrangling over how to trim the U.S. budget deficit of $1 trillion a year.
But PwC's Health Research Institute, which based its research on input from health plan actuaries, industry leaders, analyst reports and employer surveys, said data for the past three years suggest an extended slowdown in healthcare inflation from earlier decades when annual costs rose by double-digits.
"We're in the early beginnings of a shift toward consumerism in health care. And we think that you'll see more of that in the coming months and years," said Ceci Connolly, the health institute's managing director.
More than half of the 1,400 employers surveyed by the firm are considering increasing their employees' share of health benefit costs and expanding health and wellness programs in 2013, according to the report.
Connolly said health plans with higher deductibles and co-pays for workers tend to dissuade unnecessary purchases and offer lower premium costs for employers, while successful wellness programs can reduce the need for medical services.
The report said prospects for higher growth are also being held back by the consolidation of hospitals and physician practices, insurance industry pressure on hospital expenses, a growing variety of primary care options such as workplace and retail health clinics, price transparency and the increasing use of generic drugs.
Upward pressure on health care costs comes in part from a rebounding economy and the growth of new medical technologies, including robotic surgery and the nuclear medicine imaging technique known as positron emission tomography.
PwC's projection of 7.5% growth is nearly double a 3.9% rise in U.S. health care spending that the federal government says occurred in 2010, the last year for which official figures are available.
Want to Win the Wellness Game? Start with Good Communications and Fun
For many employers, wellness has become a no-brainer. The challenge, many employers discover, is getting employees on board and keeping them on the right track.
The solution, experts say, is to keep employees informed and keep it fun.
"The goal of wellness workplace programs is to improve health and slow health care costs," said Amy Gallagher, wellness expert with Cornerstone Group in Warwick, R.I. "And to get there, a clear communication strategy is a must."
Gallagher noted in a recent blog post on GoLocalProv that employers need to be aggressive and proactive when promoting their programs.
"Don't be shy when rolling out a wellness program; make it an event," Gallagher wrote. "In a kick-off meeting, position the program as an employee benefit the employer fully supports and be sure to involve leadership."
Gallagher also suggested discussing the importance of wellness with employees and clearly defining the activities and expectations.
Once the program is rolling, employers should consistently remind employees of the initiative and provide online portals and tools to boost participation.
Like any activity, it's more fun when it's a game. And wellness is no exception, according Limeade Inc.'s Henry Albrect in a recent Society for Human Resource Management report.
In the article, Albrect noted that while employers may want to be aggressive with their programs, securing buy-in from employees and making participation voluntary will generate better results.
"Traditional wellness programs often fail to achieve lasting change using a heavy-handed reliance on high incentives to drive goals passed down by the company," Albrect wrote. Programs that rely on games that appear to serve the participants' interests -- not the company's -- tend to fare better, he noted. Also, social games -- contests that involve people with whom workers already interact and know -- can be particularly effective, he said.
Like any game, the players -- not just the employer -- will want to know the score, wrote Gallagher of Cornerstone, a Member Firm of United Benefit Advisors.
"After a cycle of activities is completed, be sure to report back to employees on progress and results. Share where the population health risks are, how future activities and participation will help reduce them and any new program goals or offerings. Don't forget to survey employees to gauge their satisfaction with the program -- perhaps the most important result of all."
Employers fail at measuring wellness program ROI
BY AMANDA MCGRORY
As health care costs continue to rise, employers are on the lookout for ways to reduce spending, and wellness programs are becoming an increasingly popular solution. While research has shown that wellness programs can reduce costs, many employers are failing to measure their return on investment to get an accurate picture of how these programs impact the bottom line, says LuAnn Heinen, vice president at the National Business Group on Health, a nonprofit dedicated to representing large employers’ perspectives on national health policy issues in Washington, D.C.
“It’s important for everyone to look at what they’re spending on wellness per employee and look at that as a percentage of what they’re spending on health care,” Heinen says. “Most employers keep their wellness program investments small – only 2 percent of less of claim costs. There’s a body of evidence in different employer settings and over a number of years that suggests there is a return on investment of $2-3 per every dollar invested. When looking at these figures, a lot of companies might find that they’re underinvesting in wellness and prevention.”
Despite the importance of measuring ROI on wellness programs, it can be a struggle for employers because of the various components, Heinen says. Employees are coming and going, coverage policies could change, new insurance carriers take over – there are so many revolving factors in an employer’s reality that getting a real read of wellness programs can be difficult.
“We have a messy real world,” Heinen says. “The bottom line is you can try to collect and study a lot of data to determine the return on investment, but for all kinds of reasons out of your control, you don’t end up with valid information.”
Although measuring ROI is challenging, that’s not a reason for employers to give up, Heinen says. Instead, Heinen recommends that an employer divides its employee population into two groups: participants and nonparticipants. Between those two groups, an employer can look at the difference in claims over time. However, there are some problems with that approach.
“It’s easier to participate in wellness if you’re healthy, so maybe that person would have cost less anyway,” Heinen says. “Just because you participated in wellness doesn’t mean it was because of the wellness program that those people cost less, but at least you know there’s an association between people in the wellness program who tend to be lower cost, and it can give you that confidence that the more people participating in wellness, the better for your trend.”
An employer can also measure ROI by matching a participating employee to a nonparticipating employee who both represent similar demographics, Heinen says. For instance, an employer can take a nonsmoking 35-year-old woman following the wellness program and compare her claims to another nonsmoking 35-year-old woman who is not participating. These similar demographics do a better job of painting the true claims picture.
“It wouldn’t be a good comparison if all the employees participating were 25 and all the employees not participating were 45,” Heinen says “You want to match based on key demographics that drive costs and then you have a better chance of seeing the differences in the cost profiles is the wellness program and not their age or their smoking status or something else.”
Employers should keep in mind that calculating the success or failures of a wellness program takes time, Heinen adds. Considering the revolving workplace and the time and effort it takes for implementation, employers should give their wellness programs two to three years before they relying on the data.
“It takes a while to get enough people to participate, and then it also takes time to get information on their experiences and make changes,” Heinen says. “You really need at least two years.”
3 simple programs to incorporate wellness into the workplace
The biggest challenge facing HR professionals looking to devote resources to wellness initiatives in their organizations is responding to the question, “What’s the ROI?” It seems intuitive that if you create a healthier workforce, your cost for health insurance should go down. But intuition only goes so far these days when it comes to expending corporate resources, and quantifying ROI continues to be a somewhat elusive target.
Sure, there is lots of evidence to support the notion that health management programs do pay off. Mercer's National Survey of Employer-Sponsored Health Plans has found that employers that demonstrated a greater commitment to wellness and health management experienced annual cost increases that were two percentage points lower, on average, than those of other employers. But, as compelling as that data is, it still doesn’t constitute scientific proof.
A recent study published in the American Journal of Health Promotion did provide some hard data on the ROI of a “comprehensive” health and productivity management program. Start-up costs led to negative ROI for the first year, but strong ROI in years two and three produced a combined 2.45:1 ROI for all three program years of the study.
The study represented the results of over 20,000 program participants each year and identified the following components for what researchers considered a “comprehensive” program: comprehensive program design, management support, integrated incentives, comprehensive communications, dedicated onsite staff, multiple program modalities, health awareness programs, biometric health screenings and vendor integration.
Whew!
Clearly, the study benefitted from the law of large numbers. When you have 20,000 participants, virtually any health management program you install is going to benefit somebody. But not every company has that luxury. Also, not every company will have the resources to incorporate every single aspect of a comprehensive program as outlined above.
Does that mean you shouldn’t even start down that road? No, absolutely not. Wellness and health management programs can be scaled to fit the needs of companies of almost any size, as long as you have the data to help identify what the needs are. But even without a lot of data or a lot of money to spend, a walking program, a healthy eating campaign or a “know your numbers” program will not only heighten awareness of health issues, it will send employees a message that their employer’s concern for them extends beyond what’s included in their job description. A healthier, more engaged workforce should be a more productive workforce, and everyone benefits from that.
Many clients may think that all this wellness stuff is a bunch of “hooey”; but with health costs continuing to escalate faster than wages, and employees’ increasing difficulty to afford cost shifts, savvy advisers will be prepared to discuss the many advantages of a well-designed health management program.
By George Lane
Survey: New wellness programs on the rise, existing ones to expand
By Marli D. Riggs | April 4, 2012
More plan sponsors continue to start wellness programs, while the majority of organizations with programs currently in place are looking to expand and invest, according to the 2011 Willis Health and Productivity Survey by Willis North America's Human Capital Practice.
According to the survey, 60% of respondents indicate they have some type of wellness program, an increase of 13% from 2010. Additionally, 58% indicate they plan to expand their wellness initiatives with added programs or resources.
“Wellness programs continue to evolve and it is encouraging to see more organizations initiate programs despite economic pressures and continuing challenges in accurately measuring outcomes and results,” says Jennifer Price, senior health outcomes consultant at Willis Human Capital Practice.
Other key findings from the survey include:
- The most common types of wellness programs being offered by respondents include: physical activity programs (53%), tobacco cessation programs (49%) and weight management programs (45%).
- Although 29% of survey respondents consider themselves to be a global organization, only 15% indicate they have implemented a wellness program for their global employees.
- Forty-three percent of plan sponsors say the leading barrier to measuring success was difficulty in determining the influence of wellness compared with other factors impacting health care costs.
This year’s survey included a subset of questions that also asked employers about work/life balance programs. Findings reveal that 51% of respondents reported promoting work/life balance programs within their worksite wellness program. After employee assistance programs, flexible start/end times are the most common offering of work/life balance program options, say 81% of respondents. The survey finds helping employees achieve work/life balance is reported to be a significant concern by 18% of respondents, and somewhat of a concern by 54%.
“It is exciting to see more employers offering work/life balance programs as a part of their broader wellness efforts. Employers seem to realize that employees need resources to find the proper balance between the demands of work and personal life,” adds Price.
The survey represents the findings received from 1,598 plan sponsors. Forty-four percent of respondents had 1,000 or more employees.
Voluntary benefits can help contain company costs
To recap a previous blog post before jumping straight in to the questions: Voluntary benefit plans help employers round out their employee benefit offerings amid cutbacks in company-paid core health care, allowing employers to provide employees with additional benefits without bearing the weight of increasing cost pressures. These optional benefits can serve as value-added tools to help attract and retain top talent. Employees often pay 100 percent of the premium on these voluntary benefits through payroll deduction. Many of these benefits can be offered to family and friends as well. It's up to the employee; it's their money, and it's not costing the employer anything.
How can companies determine if adding a voluntary benefit program is the right choice for them?
They have to look at the true cost of running a company. Adding a voluntary benefit program can help offset those costs for them. Many companies are looking to ways to cut costs in the health insurance arena. It is extremely costly to maintain these major benefits. Often, what these companies are doing, ultimately, is passing those costs on to their employees.
Most voluntary benefit programs will help reduce that cost to employees because of the unique system of these benefits. If employers decide to lower their cost of mandatory benefits by passing some of that cost on to their employees, the employees can then offset those costs by participating in, for example, auto and home insurance programs saving them money over the traditional coves they would shop on their own.
What should companies look for in a voluntary benefit program?
You want to choose a company that can provide access to a variety of types of voluntary coverage and choice for your employees in the plans available. The last thing you would want to do is to present a variety of new benefits to your employees, only to have them ultimately be confused about the different types of coverage, from different sources and the costs of each one. You will want to work with a company that can provide a powerful, effective and simple voluntary benefits package that will be communicated clearly to your employees to achieve the highest level of participation and acknowledgement of the added perks.
What is the benefit of having several policies within the same voluntary benefit package?
Simply put, the renewal process for any benefit plan can be extensive to research and implement at the term of each and every policy, not to mention having to do that multiple times across multiple carriers for multiple plans. That is a huge migraine in the making just thinking about it! By having your plan developed and presented in a unified way to your employees, you will not only save administrative costs communicating these benefits, but you will also save time and money when it comes time to renew.
If you have additional voluntary benefit questions, please do not hesitate to contact our office to learn more!