Author: Charlotte Huff

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Employers Play Key Role in Educating Workers on Health Plan Choices

While most corporate leaders aren’t psychologists, they can implement strategies to discourage employees from skimping on vital health care, researchers say, particularly those in high-deductible health plans.

Constant education is crucial, so employees had better grasp a health care plan’s high-deductible design, says Dr. Alison Galbraith, an assistant professor at the Harvard Pilgrim Health Care Institute, who has studied such plans. She cites one study, published in 2009 in the journal Health Affairs, which found that only 52 percent of 682 high-deductible plan participants even knew about the deductible.

Of those, one-third could name the deductible amount and just 5 percent knew which broad categories of treatment, such as physician visits or medical tests, were excluded. Most important, Galbraith says, “people who were confused about what was covered [outside of the deductible] were more likely to cut back on care.”

Sharing basic price information online, such as through the insurance provider’s site, also might persuade some on-the-fence employees to get a medical problem checked out, says Jeffrey Ingalls, an insurance broker and co-author of Stop Buying Health Plans and Start Buying Health Insurance!

“I think a lot of those scenarios where people blow off things are based on assumption [regarding costs] versus fact,” Ingalls says.

Getting precise cost data is difficult, but even ballpark numbers showing the typical range of a doctor’s visit, an X-ray and other basic services might be beneficial, he says.

Amelia Haviland, a Carnegie Mellon University associate professor and high-deductible plan researcher, offers other tactics:

    • Provide alternatives to the traditional doctor visit.
    • Establish a free or low-cost nurse hot line for employees and family members.
    • Encourage enrollees to ask if their doctor will answer basic medical questions via e-mail at a reduced rate.

Don’t just deposit a lump sum into a health reimbursement or health savings account, Haviland advises employers. Instead, provide examples of what sorts of medical issues that money is designed to cover. “Say, ‘This covers when your kid seems like they are out of breath for three months and you need to go check them for asthma. This covers when you have some kind of weird throat-catch thing that doesn’t go away.’ “

Take any step to reiterate that employees and their loved ones shouldn’t be making health decisions solo no matter how daunting the out-of-pocket deductible, Haviland says. “That’s the message that people tend to get: ‘Don’t go to your doctor—just decide on your own.’ “

Charlotte Huff is a writer based in Fort Worth, Texas. Comment below or email editors@workforce.com.

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Going Mobile: On-Site Clinics Hit the Road for Employee Health Screenings

Leaders at Dallas-based Energy Future Holdings decided to invest in mobile health treatment after they unearthed a troubling fact.

Three-fourths of employees working for a subsidiary, roughly 1,000 based in rural East Texas, hadn’t gotten any urgent or preventive medical care during the prior three years.

That lack of prevention sometimes ended in tragedy, says Cyndie Ewert, director of benefits and human resources services at Energy Future Holdings, whose subsidiaries include energy company Luminant, where the 1,000 employees work.

“I saw a number of early deaths, men in their late 40s who should have survived a heart attack or a stroke,” Ewert says.

So Energy Future Holdings introduced a 40-foot mobile health clinic last year, one of the latest corporate trends in employee health outreach.

On-site clinics have become an increasingly common workplace sight, with 23 percent of U.S. employers offering one by 2011, according to an annual survey of 588 employers by Towers Watson & Co. and the National Business Group on Health. But mobile clinics offer an alternative for reaching geographically scattered workers. This spring, Mooresville, North Carolina-based home improvement retailer Lowe’s Cos. added three more mobile clinics to the two that already provide health screenings at stores across the country.

“Having a van makes a lot of sense,” says Helen Darling, president and CEO of the National Business Group on Health. “For the most part, unless you have a really big location, it’s hard to justify an on-site health center.”

To get medical care, Luminant’s 1,000 East Texas employees face multiple hurdles, Ewert says. Ninety percent of the employees, who work at power plants and mines, are men, a gender not prone to regular doctor visits. Plus, in rural areas, doctors can be scarce and reaching one can consume half a work day, Ewert says.

Driving to the office one day in 2010, Ewert had a “What if?” brainstorm. “What if I took the clinic to them?” she recalls wondering.

The result has been MobileDoc, which rotates among a handful of Luminant’s East Texas sites each month. The interior includes two exam rooms, a compact waiting area and lab space, among other features. It’s regularly staffed by a physician assistant and an emergency medical technician, who can treat maladies from allergies and infections to sprains and minor burns, along with preventive measures.

Clinic visits are free for employees and family members on company insurance, Ewert says. Other employees and dependents pay $75 per visit. And the employee is not docked for missing work. “We did not want any disincentive for people to go,” she says.

Meanwhile, managers fretted about employees malingering in the clinic, when they should be on the job, she says. But word spread about medical conditions that had been diagnosed, from diabetes to prostate cancer. By early this year, the clinic averaged seven to nine visits daily, Ewert says.

“The management team is ecstatic because the guys aren’t gone for half a day. They’re gone for 30 minutes.”

Ewert declined to share how much it cost to purchase the 40-foot vehicle, built by San Jose, California-based Legacy Transportation Services, or any related costs, saying that the information was proprietary. But the clinic is already demonstrating a good return on investment, she says.

The mobile approach typically requires a lower upfront investment than an on-site clinic, says Ha Tu, a senior health researcher at the Center for Studying Health System Change in Washington, D.C., who authored a 2010 research brief on workplace clinics. Quantifying return on investment for any workplace clinic can be complicated by the other factors that influence medical costs, such as changes in employee insurance coverage, Tu says.

Some vendors who develop these clinics can make “very high claims” in terms of return on investment, Tu cautions. A more conservative rule of thumb, based on Tu’s research and related vendor interviews, is that a workplace clinic might not break even for at least a year. After that, an employer potentially can save $1 to $2 in direct medical costs for every $1 invested, she says.

Lowe’s hasn’t calculated a hard return on investment figure for its mobile clinics, says Kyle Wendt, the company’s director of benefits. But the two original vehicles, which reached more than 55,000 employees in the first two years, has identified a higher rate of employees with high-risk conditions than in the general Lowe’s workforce, he says.

Perhaps, Wendt speculates, store employees are more likely to leave work for a few minutes—they aren’t docked for the lost time—in part because a vehicle seems less intimidating than a doctor’s office.

Of those employees screened, more than 7,000 were referred for a worrisome result, including 1,700-plus employees for high blood pressure. “We certainly had cases where folks’ blood pressure was so high that they called the ambulance for them right then and there,” Wendt says.

Energy Future Holdings is considering whether to broaden its mobile outreach by purchasing a second clinic, Ewert says. Regardless, company officials plan to monitor employee usage moving forward, along with the clinic’s cost effectiveness both in terms of boosted productivity and, ideally, better health.

Charlotte Huff is a freelance writer based in Fort Worth, Texas. To comment, email editors@workforce.com.

In 2011, the National Association of Worksite Health Centers was launched to highlight research and trends in the field. The Chicago-based trade organization, formed by the not-for-profit Midwest Business Group on Health and the La Penna Group, a consulting firm, is compiling numerous related resources online.

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Vision Insurers Eye Employers’ Interest in Wellness

Vision providers are piggybacking on employers’ heightened interest in wellness, making the case that cost-cutting efforts shouldn’t jeopardize the potential for using eye exams to help detect high blood pressure and other medical conditions that might otherwise go undiagnosed.


It’s an argument they are making against a backdrop of several, to some extent, conflicting trends.


On one hand, the Patient Protection and Affordable Care Act is expected to improve preventive care, which likely will boost access to vision specialists, says Maureen West, a director at the American Optometric Association. But in a tight economy, all benefits are subject to scrutiny—and cutbacks in eye care are inevitable, according to data and vision coverage experts.


In the past two years, 7.3 million U.S. adults have lost their vision insurance, with 110.6 million Americans reporting coverage in 2010 compared with 117.9 million in 2008, accrding to a survey by the Alexandria, Virginia-based Vision Council, a trade group for optical manufacturers and suppliers. Jeff Spahr, staff vice president of vision and voluntary services for the Indianapolis-based health insurer WellPoint Inc., also notes increased price sensitivity among employers.


Vision, because of its low cost compared with other medical coverage, tends to be one of the last places employers look to trim health benefits, Spahr says.


“But relative to prior years, the conversation and questions around cost are coming up more and more often,” Spahr says. “In particular with larger employers, I’ve seen a tendency to actually shop vision where they previously had not.”


Meanwhile, vision providers are striving to reframe the discussion, pointing out that for a low upfront investment, regular eye care can pay off significantly, particularly given the vision and other medical needs of an aging workforce. VSP Vision Care, the Rancho Cordova, California-based vision benefits provider, with 55 million members, says the average age of its participants is 44.


Vision problems can rack up a hefty price tag in direct and indirect costs, including productivity, totaling $35.4 billion annually, according to a 2006 Archives of Ophthalmology study cited by West as one of the most comprehensive. But the eye, with its latticework of blood vessels so easily visible during an exam, also can provide an early glimpse into other chronic conditions, including diabetes and high blood pressure, West says.


“We are really in a prime spot for detecting systemic disease,” she says, calling eye care “another primary-care touch point. Many people don’t go to a primary-care doctor at all. But a vision issue will often prompt them to pick up the phone and make an appointment.”


Beyond 20:20
The good news is that despite an aging population, computers and other eye-straining trends, vision benefits costs are projected to increase slightly less than last year, according to the 2011 Segal Health Plan Cost Trend Survey. This year, costs for vision insurance is projected to increase no more than 3.5 percent compared with a projected ceiling of 4.1 percent for 2010. And those increases, albeit higher than inflation, are dwarfed by 2011 cost projections that range as high as 12 percent for medical insurance, according to an analysis conducted by the Segal Co., a benefits and human resources firm based in New York.


Vision benefits typically run an employer about $60 annually for family coverage, says Lawrence Singer, a Segal senior vice president and expert on voluntary benefits. “Optical care is not as age-sensitive as medical care,” he says.


“While an individual might need multiple procedures some years as they get older, they likely won’t need more than one new pair of lenses annually,” he adds.


Cost projections also have been held down by the relative affordability of eye materials and related services, Singer says.


For their part, eye-care providers are talking up their workforce role beyond a new pair of progressive lenses. Vision difficulties can erode productivity in ways that employers and employees may not realize, says Melody Healy, VSP’s director of product, strategy and integration. Aches and pains? The real culprit could be computer-related eye strain.


But employees “don’t correlate it to eye strain because the pain is in the neck, back or shoulders,” she says.


Employers also shouldn’t leave the eyes behind, as they move more aggressively into disease management, says West, who directs the association’s Third Party Center, which advocates for eye coverage to insurance providers.


When West speaks with business groups about managing diabetes, for example, “many say that eye care and foot care are the sleepers. I think so many companies focus on prescription drug maintenance they lose sight of the other aspects of care that are really important.”


In 2009, just half of people with diabetes received an annual eye exam, according to federal data reported to the National Business Coalition on Health. More than 80 percent got an annual A1c test, to assess average blood sugar levels, and cholesterol screening.


Trimming vision costs
   Price-sensitive employers have some alternatives to dropping vision benefits completely, such as asking employees to subsidize part of the cost, says WellPoint’s Spahr.


In a 2010 survey conducted by WellPoint, 88 percent of U.S. adults said access to a wide variety of benefits was important in their decision whether to accept a job, even if some of them required the employee to foot a portion of the total cost. According to the same survey, which involved 2,500 adults, 55 percent reported sharing the cost for vision coverage with their employers compared with 59 percent for dental and 67 percent for major medical.


In the last couple of years, there has been a shift toward employers not providing any vision subsidy, particularly among new VSP clients, according to Healy. She declined to release any related data, saying that they were proprietary.


Another cost-trimming option, which Healy supports, is for employers to continue to pay for a regular eye exam, while giving the employee the voluntary option regarding lenses and other vision materials.


“Don’t go short on the eye exam,” she advises employers, “because the eye exam is what will get your people into the health care system.”


Workforce Management Online, January 2011 — Register Now!

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Tapping Family Leave—Occasionally

By 2005, officials at Nokia Siemens Networks recognized that they were having difficulty coordinating various absence-related requests, including short-term disability and Family and Medical Leave Act claims.


So they decided to create an ombudsman-style position, an individual who could help employees coordinate the related paperwork—FMLA and short-term disability typically run concurrently—to document their leave and avert any payment difficulties.


Soon that position developed into a broader role, says Charlotte Gambrell, who manages and directs North American benefits for Nokia Siemens Networks. The telecommunications company, which employs about 2,200 North American employees, separated from Nokia in 2007.


These days, the ombudsman might intervene when a snag develops related to an FMLA claim, such as when paperwork is required from a physician, Gambrell says. “What the role of this person is, is to eliminate any sense of worry for our employees, especially when they have difficult times. We realize that at those times it’s very overwhelming for them.”


Sharyn Tejani, a senior policy counsel with the National Partnership for Women & Families, cites the ombudsman concept at Nokia Siemens as a great strategy to streamline any logistics associated with FMLA use, particularly if the leave involved is intermittent.


Rather than taking off a block of time under FMLA, such as for maternity leave, some employees may take more sporadic absences, such as when a migraine flares or when they need medical treatment. But there is some concern over the degree to which the federal law’s protections may be abused, so an employee’s sporadic use of FLMA must be monitored closely.


Providing FMLA job protection in such situations is one of the best attributes of the 1993 law, says Tejani, whose group advocated for the law’s passage. After all, chemotherapy might require only several hours away from work each week, and a mother cannot predict when her child will suffer an asthma attack. “For certain conditions, there really is no other way of doing this,” Tejani says. “It’s really the type of leave that will save your job.”


Gail Scott, a partner at MorningStar Health, which specializes in health and productivity management, including FMLA, cautions that employers need to stand guard against malingering employees, who can create a ripple effect across an organization.


“If FMLA is not being administered well by a company, it can become epidemic,” Scott says. If “a significant percent of the population has an approved claim for intermittent use for a chronic condition, they can come and go as they please and are not subject to the company’s attendance policy for a total of 12 weeks a year.”


Use vs. abuse
This year Scott spoke on a FMLA panel at the 2010 Health and Productivity Forum in San Antonio and talked about some steps a PepsiCo facility took to get a better handle on high FMLA use at one of its facilities.


At the facility, 2.1 percent of total employee work hours, or roughly 17,000 annually, were classified as time off under FMLA, according to data presented. The facility’s rate was more than three times the national average of 0.6 percent in 2007. “It’s kind of a staggering number when you first look at it,” said Javier Feliciano, a PepsiCo senior manager of human resources, who also spoke at the San Antonio FMLA panel


Feliciano, who has since left the company, said that some managers were approving requests without asking questions or providing a sufficient review. The estimated cost of lost productivity per year: $577,000.


Intermittent FMLA use can be particularly disruptive in some production-related work environments, says Carl Bosland, a Denver attorney who has written several books related to the federal law. For example, if an employee announces that he or she needs to leave immediately, he says that “it can become very difficult to make sure you have the bodies you need to literally keep the line moving.”


But Tejani maintains that concerns about abuse or disruption are overblown. After all, employers manage to handle other situations in which workers suddenly call in sick for non-FMLA reasons.


 Clarifying FMLA requests
Indeed, there are procedures to prevent abuse. By working carefully through the forms provided by the Department of Labor and adhering to the related deadlines, employers can clarify exactly what medical information they will need, says Charlie Plumb, chair of the labor and employment practice group for McAfee & Taft. The new medical certification form, issued in the wake of the 2009 regulatory changes, is quite helpful, he says. “It’s much more robust and beefed up and it requires a lot more detailed information before you can approve intermittent leave.”


For example, if an employee suffers from migraines, the physician will be asked to predict how often the migraines will occur and how long the employee will need to be off from work each time, Plumb says. If the pattern begins to differ substantially, the employer can circle back to the physician for further clarification.


The 2009 regulations also allow employers—as long as they are not a direct supervisor—to contact the doctor’s office directly if they harbor suspicions about the medical certification’s authenticity, Plumb says. For example, an employer might be suspicious if the handwriting looks like the employee’s or if a word such as bronchitis is misspelled.


Employers also should pay close attention to patterns of absences, particularly if they tend to fall on Mondays and Fridays, Scott says. After all, she quipped at the San Antonio meeting, how does an illness know what day of the week it is?


At the PepsiCo facility, additional training and standardization of procedures made a significant difference, according to the data presented. The initial goal had been to reduce FMLA work hours from 2.1 percent of the total work hours to 1.6 percent in the first year. But in the end, the percentage of FMLA hours declined to 0.8 percent of the total, resulting in a labor cost savings of nearly $257,000.


Workforce Management Online, September 2010 — Register Now!

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Healthy Returns on Flex Work

Any employee attempting to juggle work/life responsibilities while reporting to an obdurate boss understands the angst-filled consequences. But a federally funded research consortium is digging deeper to determine whether some flexibility can improve blood pressure and other health indicators, paying off for employers and employees alike.


The Work, Family & Health Network, launched several years before the Obama administration recently spotlighted workplace flexibility, has already wrapped up several Phase I pilot studies looking at supervisor training and innovative scheduling, among other factors. The network’s $31 million Phase II, which runs until 2012, will more closely study how such accommodations can influence blood pressure, blood sugar control, body mass index and other physical warning signs.


“A huge part of our Phase II is looking at return on investment,” says Leslie Hammer, a professor of psychology at Portland State University in Oregon and a principal investigator of the research consortium. “We do expect that if we improve the health of workers that it will lead to improvement in the organizational bottom line.”


Researchers from eight institutions are involved in the multiphase project, which is funded by the Centers for Disease Control and Prevention and the National Institutes of Health. The first phase, which ran from 2005 to 2008, covered a mix of employees, including lower-income workers filling shifts in grocery stores and nursing homes.


In March, the White House held a forum on workplace flexibility and released a report detailing trends and related economic benefits, including reduced turnover and absenteeism. Still, published data on physical health have been limited. Researchers have shown that workplace accommodations can reduce stress and boost an employee’s sense of well-being, Hammer says. “When we try to connect it to actual health outcomes, that’s much more complicated,” she says, citing the time, expense and logistics involved, including taking health measurements.


Ellen Bravo, executive director of the Family Values @ Work Consortium, applauds the Work, Family & Health Network for looking beyond white-collar workers. Too frequently, the discussion of flexibility is viewed as “synonymous with professional women who want to work fewer hours or telecommute,” says Bravo, whose group advocates for policies such as paid sick leave.


In one Phase I study slated for publication this year, researchers assessed the perspective of nursing home managers toward flexible policies. Employees reporting to managers who rated low- to mid-level were more likely to be diagnosed with two or more heart disease risk factors, the researchers found.


Research from Hammer, working in conjunction with Michigan State University, focused on managerial training at Midwestern grocery stores in such behaviors as resolving scheduling conflicts. Employees reporting to managers who were trained not only reported better job satisfaction, but also improved physical health.


The health findings were largely based on employee self-reports, Hammer cautions. But such results represent a good start, researchers say, toward further investigation into whether easing work/life stress also can lighten employee medical bills.


Workforce Management, July 2010, p. 3 — Subscribe Now!

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Special Report on Health Benefits Butting In

Navistar Inc. executives turned up the heat on smokers five years ago as part of a pioneering move to improve employee health and rein in medical costs.


Smoking employees are now required to disclose their habit during the open enrollment period for health insurance or, if they fail to truthfully answer, risk violating the company’s ethical business policy. As long as Navistar employees continue to light up, they pay higher premiums—$50 more monthly. The policy applies only to nonunion workers, slightly more than half of Navistar’s 11,000 U.S. employees; union health benefits fall under a separate contract. Navistar realized the smoking surcharge could be controversial. “We were a little hesitant that we were setting ourselves up for some employee complaints,” says Dawn Weddle, wellness and behavioral health manager at Warrenville, Illinois-based Navistar, which makes trucks, RVs and other vehicles. Feedback was generally positive, with some “rumblings” but no formal complaints, Weddle says. “You have to remember: The majority of employees don’t smoke.”


The insurance premium penalty is helping to reduce the number of smokers even more. The percentage of employees reporting that they smoke has declined from 10.3 percent in 2005 to 8.6 percent in late 2009.


Some critics consider it intrusive and discriminatory to penalize unhealthy behaviors like smoking and reward people for taking positive actions such as losing weight. Nevertheless, other employers—fed up with rising obesity rates and related health costs—are following Navistar’s lead. Nearly two-thirds of large employers either have a smoking penalty or plan to impose one during the next three to five years, according to a 2010 Hewitt Associates Inc. survey of nearly 600 employers.


Corporate wellness strategies that affect employees’ pocketbooks are expanding beyond smoking. What’s more, the money involved might be a positive incentive or a penalty and it might be linked to participation, such as joining a weight-loss program, or to specific results such as reducing one’s body mass index. According to the same Hewitt survey, 17 percent of employers already have or plan to implement a penalty related to nonsmoking risk factors, such as obesity or high blood pressure.


In Alabama, however, state officials have chosen a positive incentive to encourage high-risk employees to consult a doctor or seek other medical help. The state provides a $25 monthly discount on health insurance premiums to all employees who receive such wellness screenings, whether their medical risks are high or low. But employees identified as high risk must take an additional step, such as seeing a doctor or enrolling in a wellness program, to retain that discount. Alabama decided not to tie the incentive to specific health goals but rather to simply try to motivate employees to seek medical feedback, says William Ashmore, chief executive officer of the State Employees’ Insurance Board in Alabama.


(To enlarge the view, click on the image below. Adobe Acrobat Reader is required.)


At some companies, employees are asked to report their own weight, blood pressure and other health risk factors on assessment forms, typically during the enrollment period. Other wellness proponents, such as Thomas Parry of the Integrated Benefits Institute, say it’s more beneficial to pursue the path taken by Alabama state officials: directly measuring employees’ weight and other risk factors—sometimes dubbed biometrics—instead of relying on self-reporting. “Once you have biometric measurements, it’s certainly much easier to judge whether behavior has changed,” says Parry, president of the San Francisco-based research institute. “There is no doubt that folks are moving toward this.”


But are such tactics turning companies into Big Brother? Michael Gusmano, a research scholar at the Hastings Center, questions the degree of employer involvement in workers’ personal lives. Companies certainly have a vested interest in healthier employees, he says. “But it’s not entirely clear that it’s appropriate for them to have that kind of influence over domains of your life that aren’t directly related to you doing your job.”


Don Weber, a managing director at PricewaterhouseCoopers, agrees. “You get into a lot of really personal and emotional issues around health care,” he says. “People take it personally. ‘Why should my boss know that my cholesterol is too high? That’s between me and my doctor.’ Those are the issues that [employers] are really tiptoeing around right now.”


There clearly are risks in becoming too intrusive. Companies could lose talented—albeit less fit—employees who consider such wellness programs an invasion of their privacy. Some workers also may find the monetary incentives unfair. After all, employees’ health issues are affected by their genetic background, economic circumstances and other factors beyond their control.


Designing incentives
    Employers need to design health programs with financial incentives carefully to avoid potential legal complications. Under the Health Insurance Portability and Accountability Act, or HIPAA, a group health plan can’t discriminate against individuals by charging different premiums based on their health status, says Bob Christenson, chairman of the employee benefits practice group at Fisher & Phillips. But there’s an exception involving wellness programs. As much as 20 percent of the individual’s total premium can be linked to wellness goals, an amount that under health reform legislation will be raised to at least 30 percent beginning in 2014.


But HIPAA also provides for a reasonable alternative if it’s not medically feasible for an individual to achieve a specific wellness goal, Christenson says. For someone unable to quit smoking because of nicotine addiction, alternatives might include wearing a nicotine patch or taking a cessation class, he says. “I think you start running into legal issues when you say, ‘You have to achieve this’ and you don’t give [employees] any alternatives.” Navistar does make exceptions. It provides a smoking-related exemption for employees who have been told it’s medically inadvisable for them to quit, Weddle says. “To my knowledge, I don’t think we’ve ever made that exemption for employees.”


In 2005, Navistar employees were notified about the smoking premium increase several months before open enrollment. Once the 2006 benefit year started, they were given a six-month waiver as long as they enrolled in a company-sponsored smoking cessation program. These days, smokers who snuff out their last cigarette partway through the year can sign a related affidavit and the higher premium will be dropped, Weddle says. Employees also are required to step forward if their willpower lapses—backsliding that will hit their wallets along with their long-term health. “Each month we get a few who come back and say that they’ve started,” Weddle says. If an employee reported that a co-worker did smoke, there would be an investigation, she says, but she couldn’t recall a situation in which that has occurred.


Weber of PricewaterhouseCoopers advises employers to move cautiously, educating employees and setting “pretty wide guardrails” in terms of how rigorously they set weight and other benchmarks. “It’s really about getting people’s attention,” he adds, noting that it’s important that employees are educated about why health risk factors are being monitored. The goal, he says, is for them to view related financial incentives or penalties as motivational, not invasive. Indeed, Navistar has primarily focused on boosting participation in wellness programs rather than mandating specific goals such as smoking cessation. “With smoking, there is some really hard data on the cost of smokers and the impact they have on your health care costs,” Weddle says. “Whereas with some of the other biometric testing, such as cholesterol, blood pressure or weight, it’s not as clear cut. There are a lot of other confounding variables that you have to factor in.”


Navistar employees can benefit financially in a variety of ways beyond quitting smoking. Any employee who fills out a health assessment saves $300 on the annual premium. If a spouse also fills out the form, that’s an additional $120 savings annually. Employees who both fill out the self-assessment and participate in at least two wellness programs—ranging from weight-loss efforts to telephone coaching on healthy behaviors—receive $200 in their flexible spending account.


Since the smoking surcharge was added, health costs have stabilized in recent years, Weddle says. But the penalty and related wellness efforts were only one of a number of steps taken since 2005, including other changes in how insurance coverage was designed, she says.


Delving into the research
Research results on the effectiveness of wellness incentives are mixed. Alan Balch, vice president for the Preventive Health Partnership, describes employer initiatives as “by definition, an experiment.” He says, “Some people have pushed this idea of incentives tied to biometrics tied to health standards as the magic bullet. There is almost no evidence to support doing that.”


Yet several wellness proponents point to a New England Journal of Medicine study published last year that found that employees at a U.S. company who were offered money to quit smoking were more apt to kick the habit within the first year than those who simply received information about smoking cessation programs—14.7 percent versus 5 percent. The difference narrowed over time, however. After 15 to 18 months, 9.4 percent of the financially rewarded employees were still smoke-free, compared with 3.6 percent of the group who didn’t receive any monetary incentives.


Another recent study involving weight loss and the same researcher, Dr. Kevin Volpp, also illustrated the difficulty of sustaining results. The participants who received incentives did lose more weight during the 16-week effort. But they subsequently regained much of that weight, nearly erasing the gap with the group that didn’t receive any money, Volpp and other researchers reported in the Journal of the American Medical Association.


In short, cash is not a cure-all, says Dan Ariely, professor of psychology and behavioral economics at Duke University. While money can be effective in the pursuit of short-term goals, Ariely says, it doesn’t provide enough intrinsic motivation to win the ongoing struggle to keep off the lost weight.


“People like money; there is no question,” says Ariely, the author of the book Predictably Irrational. “If you could pay people lots of money for very long durations, it would work. The question is, ‘Do we have enough money?’ And the second question is, ‘What happens when we stop?’ ”


One of the leading researchers in corporate wellness, Dee Edington also is concerned about where financial rewards end. If you lower insurance premiums for slender employees, he asks, do you also offer rewards based on the number of hours exercised or blood-sugar levels? He has been approached by corporate leaders to study the effectiveness of money in driving health goals, but isn’t interested. “I tell them, ‘We just don’t believe in that,’ ” says Edington, director of the Health Management Research Center at the University of Michigan. “We believe in encouraging participation [in wellness programs].”


What is the exit strategy from financial incentives? There’s no easy answer, but LuAnn Heinen, a vice president at the National Business Group on Health, suggests that instead of rolling out a new financial incentive year after year, progressive employers try to motivate employees by promoting other tangible benefits, including better sleep, reduced stress and higher productivity. But it remains to be seen whether quality of life can compete with money in motivating employees to become healthier and help companies reduce medical costs.


Workforce Management, August 2010, p. 22, 24, 26 — Subscribe Now!

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Shedding Pounds, Premium Dollars

William Ashmore, CEO of the State Employees’ Insurance Board in Alabama, felt frustrated. Government employees kept putting on more pounds and pushing up the state’s health care bills, even though the state had long encouraged them to receive wellness screenings, including weight and blood pressure checks. “It became very clear to us that obesity was one of the major drivers of health care costs,” Ashmore says.


By 2009, nearly 48 percent of state employees met the federal definition for obesity, with a body mass index of at least 30, compared with only about one-third of adults nationally. And their costs were rising proportionally. The state insurance board found that an employee with a body mass index of 30 to 34 averaged $490 more annually in medical costs compared with a healthy-weight colleague. For those who were even heavier, with a body mass index of 35 or higher, additional health care costs ranged from $907 to $1,719 annually.


So last year the insurance board decided to try the carrot approach to encourage employees to undergo wellness screenings and obtain medical help. Now all employees who are screened receive a $25 monthly discount on their 2010 health insurance premiums. That includes those employees who are classified as high risk because of their weight, blood pressure or other factors. But to receive that discount, they must also show that they’ve consulted with a physician about their health or taken another proactive step, such as enrolling in a weight-loss program.


Employees are classified as high risk, for example, if their body mass index is 35 or higher—at least 230 pounds for a 5-foot-8-inch individual. They also are asked to seek medical help if their blood pressure is at least 160/100, compared with the recommended target of 120/80 or lower.


Before implementing the premium discount, only about 30 percent of people got screened—typically the healthier employees, Ashmore says. In 2009, 95 percent of the state’s nearly 38,000 employees were screened. The point is to get at-risk employees into the medical system, he says. “We don’t want to get in the middle of dictating to individuals, ‘You have to do this and you have to do that.’ The treatment plan and the compliance with the treatment plan is between them and the physician.”


The $25 premium difference helped convince Shakina Wheeler-Cox to get a better handle on her weight. “I’m real tight with my money,” says the 32-year-old HIV coordinator.


She joined a weight-loss program and started exercise classes. From early 2009 to mid-2010, she reduced her body mass index from 52 to 44. Her goal: to drop below a 35 body mass index. She already feels “a thousand times better,” she says, with more energy and a better attitude.


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Measuring Health Risk Surveys vs. Screening

When the city of Fort Worth, Texas, launched its wellness program in 2002, officials decided to take two different snapshots of their employees’ medical risk.


Since then, participating employees—54 percent of the city’s nearly 6,400 workers volunteered in 2010—have been asked to fill out a health risk assessment survey each spring. At the same time, they complete a battery of screening tests, including weight, blood pressure and cholesterol.


“One [screening method] without the other just is not as effective,” says Vicki Tieszen, the city’s wellness program manager. Without knowing an employee’s risk factors and willingness to change—all part of the health assessment—it’s difficult to make health recommendations, she says. Relying solely on a survey, though, also has its drawbacks, Tieszen says: “You won’t have any hard numbers in terms of looking at improvements.”


As employers ramp up or expand their wellness efforts, they frequently encounter this dilemma. Do they rely on what employees tell them about their weight, blood pressure and other risk factors? Or do they ask them to stand on a scale and roll up their sleeves?


Advocates for taking employee measurements, sometimes referred to as biometric screening, describe the data as critical to tracking employee health trends, along with allaying any worries about accuracy. Employees may simply not know their own blood pressure, they say, or may sugarcoat the memory of their most recent doctor’s visit. “We tend to give ourselves the benefit of the doubt,” says Adam Hobgood, manager of translational research for the Center for Health Research at Healthways Inc., which works with employers on wellness initiatives.


But not all experts agree—among them Dee Edington, one of the leading researchers in corporate wellness efforts. Based on Edington’s own experience with corporate initiatives, he describes self-reported risk factors as largely reliable, albeit not exactly precise. Individual reporting of weight, for example, is typically only one body mass index (BMI) unit off, say a 24 BMI versus a reality of 25 BMI, he says. That discrepancy translates to roughly seven pounds.


“What we’ve found is that if people trust that nothing is going to happen and they have a good trust in the system, that they are accurate,” says Edington, director of the Health Management Research Center at the University of Michigan. Plus, surveying health risk is far cheaper than hiring clinicians to measure it. Taking physical measurements can cost $20 to $60 per employee, depending upon the number of tests and the complexity of the testing involved, Edington says.


Reporting vs. numbers
Even so, some companies might benefit from biometric screening, if they can afford the additional cost, Edington says. As one example, he cites an employer with a disproportionate number of middle-aged men. Since that group is less likely to get routine preventive checkups, they’re more ignorant about their own risk factors and thus could benefit more from screening, he says.


At Devon Energy Corp., leaders decided that they needed more precise data about employee health so they could better tailor wellness programs and initiatives, says Sue Alberti, vice president of compensation and benefits for the Oklahoma City-based company. Some employees were a bit startled by the results, such as the reality of their waist size.


“Especially some of the men who have their pants-below-the-waist problem,” she says. “If it’s lying, it’s more like fooling themselves. The problem with fooling themselves is they are the only ones who are hurt down the line.”


Hobgood, the researcher at Healthways, co-authored a study published this year in the American Journal of Health Behavior that found sharp differences between reported and actual risk factors. As one example, 3.5 percent of 5,403 employees surveyed described their total cholesterol levels as higher risk—defined as 221 mg/dL or higher by the study. Nearly one in four employees—23.3 percent—actually fell into that group based on their cholesterol results.


But Fort Worth’s Tieszen doesn’t fret much about imprecise results. Employees can be sometimes startlingly forthright once they trust that their job won’t be affected, she says: “People will write down that they drink and drive.” An analysis of March 2010 employee data, provided by Tieszen, found only a minor discrepancy between several self-reported risk factors and actual measurements, with the exception of cholesterol levels.


For both blood glucose and blood pressure, less than 4 percent of employees who classified themselves as low or average risk actually fell within the high-risk category. For cholesterol, the split was greater. Twenty-four percent of employees, who described their risk as low or average, were considered to be high risk based on a total cholesterol count of 200 mg/dL or greater.


Weighing the bottom line
Prior to hiring Cooper Corporate Solutions last year, Devon Energy officials had primarily relied on health survey results, Alberti says. But the consultants at Cooper recommended that they attempt to boost the number of employees—less than 25 percent at the time—who also were getting weight and other risk factors measured.


In fall 2009, Cooper launched a series of on-site meetings, visiting some two dozen Devon Energy locations to tell employees about why they were doing the more intensive health assessment and to outline how employee privacy would be protected. “We stood in front of [employees] and said, ‘Look, it’s against the law for us to share your information,’ ” says David Atkinson, Cooper’s vice president of corporate wellness. “ ‘It’s against the law for us to use your responses in order to deny you employment or to change your employment status.’ ”


Employees also were notified that their health insurance premiums would be going up, but that the 2010 premium increase could be partially offset—by $30 monthly—for employees who did both the health assessment survey and the biometric screening.


More companies are adopting such financial incentives. By early 2010, 22 percent of large companies were offering an incentive for employees who completed both the health survey and the biometric screening, according to a survey conducted by the National Business Group on Health and Towers Watson & Co. An additional 19 percent were contemplating the move.


Officials at Devon Energy also took some steps to make employees comfortable with the health measurements, such as providing private screening areas, Alberti says. Following the measurements, employees received immediate feedback on the results. By year’s end, 90 percent of the energy company’s roughly 4,000 U. S. employees had participated, according to Cooper.


The biometric screening wasn’t cheap, costing $78 per employee, according to Alberti. But it was money well invested, she says, and the company’s senior leaders didn’t hesitate. “I didn’t have to make a big case,” she says. Now that data can be tracked moving forward to assess not only changes in health risk, but whether the company’s medical costs shift over time.


The city of Fort Worth, which also hired a third-party group to take employee measurements, spends nearly $98,000 annually for that staff time and related lab work, according to Tieszen. The health survey portion costs slightly more than $15,500, she says.


In calculating return on investment, Tieszen points to the city’s medical claims. In the last five out of six years, employee medical costs have fallen below the budgeted annual amount by at least $2 million and, at the outside, by as much as $18 million, she says.


Other factors likely played a role, including changes in insurance benefit design, she says. But heightened health awareness, tied to closer scrutiny of risk factors, is undoubtedly part of that equation, she says.


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Employers Bolster Medication Adherence Initiatives

Some employers, after years of simply helping cover the cost of prescription medications, are experimenting with financial and behavioral strategies to persuade workers to actually take the drugs, in the hope that a lower investment upfront will ward off strokes and other costly medical problems later.


The reasons that some people fail to regularly take prescribed medication are complex and still not fully understood, say researchers and other experts. But employers are increasingly reluctant to take a back seat, paying for premiums without following through, says Chuck Reynolds, president of employer practice for the Benfield Group, which compiled a 2009 survey and related report on medication compliance initiatives for the National Pharmaceutical Council.


Among the strategies employers are using: reminding employees to take their medicine through e-mails and phone calls, offering group educational sessions, and reducing employees’ out-of-pocket payments to encourage them to both start and stick with the drugs.


Companies also plan to measure the return on investment, according to the Benfield Group’s survey data from 75 large self-insured employers. Within the next 18 months, 49 percent plan to evaluate the impact of proposed interventions on medical and pharmacy costs, according to the May 2009 survey. Only 21 percent already were conducting such analyses.


Not surprisingly, big money is involved. The inability of some people to stick with prescribed medication, along with other problems such as poor prescribing decisions, may cost the health system as much as $290 billion annually, according to a report released last year by the nonprofit New England Healthcare Institute. For a midsize employer with $10 million in annual medical claims, those drug-related costs could translate into as much as $1 million annually, the report’s authors found.


One significant hurdle: convincing people to even start taking a drug. More than one in four newly prescribed prescriptions—28 percent—aren’t even filled, according to a study published earlier this year in the Journal of General Internal Medicine. The research, which tracked 82,000 newly prescribed medications over 12 months, identified a higher rate of non-adherence for some chronic disease drugs, including high blood pressure (28.4 percent) and diabetes (31.4 percent).


Unraveling behaviors
Although limited personal finances play a role, a thornier factor in non-adherence is rooted in psychology, particularly when a chronic health problem is involved, says Dan Ariely, professor of psychology and behavioral economics at Duke University and the author of Predictably Irrational.


“The problem is that it’s all about trading off the long-term future with the short-term consequences,” he says. “It turns out that when we are faced with this tradeoff, we often make the wrong choice.”


A recent study published in The American Journal of Pharmacy Benefits highlighted that disconnect. Asthma medications were filled at a higher rate, nearly 80 percent, compared with two-thirds of cholesterol-lowering drugs. “We suspect that certainly respiratory conditions may be more severe and more symptomatic in nature and thus the patient would be more motivated to initiate therapy,” says Josh Liberman, the study’s lead author and vice president of strategic research for CVS Caremark.


Liberman’s study also revealed that more than 90 percent of the prescriptions that were filled were done so within two weeks of being written. Those who didn’t even attempt to get the medications were more likely to be older or to face co-pays of more than $10.


CVS Caremark has funded other research, led by Minds at Work, a company founded by Harvard psychologists. It reveals the inherent behavioral challenges involved. Researchers conducted hour-long interviews with patients who tried, but failed to adhere to their recommended drug regimen. Among the findings:


• 24 percent believed that the medication interfered with their personal priorities, social life or just generally became a chore.


• 21 percent said they felt as if they were losing control of their life; stopping the medication was sometimes a way to resist authority.


• 17 percent said the regimen made them feel old or perceive themselves negatively.


Broader strategies
To encourage employees to stick with their drugs, employers should provide better support than just a brief physician visit, says Scott Wallace, a researcher and visiting professor at the University of Virginia’s Darden School of Business.


In a pilot diabetes project Wallace is conducting with a Fortune 500 company, the participants have been meeting in group sessions with not only a pharmacist but also with someone living with diabetes. Patients hear firsthand experience with the treatment as well as its potential side effects.


“What it does is it overcomes these information and knowledge issues,” Wallace says. “And it starts to address the issue of complications. If somebody takes something and they get sick from it, they think, ‘Oh, it’s a bad drug and I shouldn’t be taking it.’ ”


Employers also can tweak their benefits to emphasize chronic care treatment, such as by not charging any co-pay for basic preventive drugs, such as cholesterol or blood pressure medication, Wallace says. “You can buy a lot of blood pressure medication for the cost of one employee’s stroke.”


As of mid-2009, 20 percent of companies surveyed reported lowering medication co-pays or co-insurance for specific conditions, according to the Benfield Group’s survey. But far more employers were weighing the move: 47 percent said they were planning such a move within the next 18 months.


Setting the co-pay to zero is relevant only for patients who are cost-sensitive, Liberman says. “And that’s only one reason people give for being non-adherent.”


Another approach worth exploring, he says, it to set the co-pay at a lower level if employees not only start but continue to take their prescribed drug.


Employers wield more influence than they might realize in the medication equation, including the workplace environment, Wallace says. He is working with UVA associate professor Elizabeth Teisberg on the role of employers in chronic disease management, including medication adherence.


“I’ve never been in a manufacturing facility that didn’t have a smoking area,” Wallace says. But employees rarely have a private area where they can discreetly swallow a pill or administer an insulin shot, including the safe disposal of the needle, he adds.


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Weighing the Benefits of Tapping a Health Advocacy Service

Since 2006, a California-based school insurance pool has contracted with Health Advocate Inc. to assist its employees and their families with insurance-related difficulties.


But in the last year or so, as tight budgets have stripped back human resources departments, the advocacy service has become even more vital, says Ellen Alcala, business development manager for the Southern California Schools Employee Benefits Association. The nonprofit insurance pool provides medical coverage for 29 school districts totaling about 26,000 enrollees, including dependents.


Alcala hasn’t yet conducted a return-on-investment analysis. “But I can say that administratively, it saves a lot of money,” she says. Plus, there’s the employee satisfaction payoff, she adds. “The whole benefit of having the advocacy program is, it’s a nonbiased third party that intervenes on your behalf.”


Where employees are concerned, time is money—and that includes wrangling with health insurance companies, according to enthusiasts of health advocacy services. They cite the increasing complexity of health insurance, including the newest entrant: high-deductible health plans and their linked accounts.


Outsourcing such headaches, they say, can assist employees and also ease the burden on stretched-thin human resources departments. It also can shield staffers from inadvertently violating some provision of the federal privacy law HIPAA as they sort through an employee’s insurance-related dispute.


One recent survey indicates an uptick in usage. In 2009, 53 percent of large employers—those with 500 or more employees—offered health advocacy as part of their benefits, compared with 47 percent in 2008, according to Mercer’s annual survey of employer-sponsored health plans.


Paying twice? 
Mercer is one of the newest entrants on the health advocacy block, joining other long-standing providers. Health Advocate, which began operating in 2002, now has roughly 5,400 clients nationwide, primarily employers. Hewitt Associates launched its service in 1999; it now assists more than 4.2 million employees, plus dependents.


Mercer introduced its service in fall 2009 after noticing more interest from employers who were interested in outsourcing their health and benefits administration, says Rich VanThournout, Mercer’s total benefits outsourcing business leader. About 70 percent of the requests for proposals asked if Mercer provided any health advocacy component, he says.


Employers were reporting that some employees had a tough time navigating insurance issues. “And they would get frustrated,” VanThournout says. “Many of these things then bubble up to our human resource counterparts.”


But Helen Darling, president of the National Business Group on Health, is a bit dubious. She questions why large employers would hire a third-party service to help adjudicate claims when they’re already paying administrative fees to their insurance providers to handle such scenarios.


Corporate benefits departments regularly track performance issues, such as the insurance provider’s responsiveness to claims concerns, she says. If an employee has a problem, she says, “They will be all over the plan to straighten it out. You shouldn’t hire somebody to fix something that the plan should already be doing for you.”


Saving time
At Mercer, the advocacy service doesn’t immediately get involved, VanThournout says. Instead, the employee is asked to first try to resolve the issue with the insurance provider. To date, just 2 to 2.5 percent of employees end up tapping the help of Mercer’s advocacy service, he says.


Sometimes employees just prefer the reassurance of an outside set of eyes, he says. “It’s really trying to educate the participant and also to make sure the process worked correctly and that the [insurance] claim was paid correctly,” he says.


Sorting out claims issues can be time-consuming. According to Hewitt’s data, each claim takes an average of 17 phone calls and 4.5 hours to resolve.


At Health Advocate, it’s not uncommon for a complex claims dispute to consume 20-plus hours to compile and sort through the relevant information, says Marty Rosen, Health Advocate’s co-founder and executive vice president. “You are wading through piles of paper,” he says. “You are going back and forth. You are tracking down paper from the hospital, from the insurance company.”


Typically these calls have to be made during business hours, he points out. “Would you rather have your employee spending time at the workplace dealing with these types of issues?”


Privacy and other logistics
Even if employers hire an outside service, they should carefully vet it to make sure it’s complying with HIPAA, says Callan Carter, a partner and member of the employee benefits practice group at Fisher & Phillips.


Employers should ask about how the service trains its own employees on HIPAA provisions, as well as how they report the information they collect, she says. “If there is a breach of someone’s information, it’s going to be the employer who is going to hear about it,” Carter says.


As employers monitor the effectiveness of a third-party advocacy service, they also should make sure that information is provided in summary form, to guard against violating HIPAA, which is designed to prevent any unauthorized disclosure of an individual’s health information. One approach might be to provide a summary of the types of claims pursued by category, such as nonpayment issues, so they can’t be traced to any particular employee, Carter says.


In some cases, the underlying insurance problem is not an improperly paid claim, but rather that the employee misunderstood the insurance plan’s design, Rosen says. That’s particularly true if the employer recently switched to a high-deductible plan, he says. Despite employer efforts to educate employees in advance, he says, “for some people, the world changed pretty dramatically from Friday to Monday with the effective date of the new coverage.”


Alcala of the Southern California Schools Employee Benefits Association agrees. The insurance pool will offer a high-deductible plan option for the first time this year. “As we move into more consumer-driven health plans, I see advocacy services taking on a bigger role,” she says.


Before moving forward, though, Darling advises human resources leaders to run a cost-benefit analysis of their own corporate circumstances. Hiring an outside advocacy service might sometimes make sense, such as if the benefits department has become too short- staffed, she says.


But Darling remains lukewarm. “I think frankly most people wouldn’t want to call a strange organization at all,” she says. “I think employees correctly trust their HR people.”


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