I work in an administrative role at a national restaurant chain.
I just got off of a conference call with corporate in which they told us that if the U.S. government sends us the proposed stimulus checks due to Covid 19, they plan to absorb the money we receive by cutting our hours to reflect that amount. In other words, if each person receives a check for $1,200, $1,200 will effectively go back to the company. Is this legal?
Legal? Yes.*
Morally repugnant and disgustingly reprehensible? Also, yes.
There is no reason (other than flat-out greed and corporate gluttony) to “absorb” an employee’s stimulus check by reducing working hours in a pro-rata amount. It is just the worst, given the current state of health and financial crisis in which we find ourselves.
If you know of an employer doing awful coronavirus-related things to its employees, please let me know by contacting me or by leaving a comment below. I’d like to think that we are better than this, but sadly I know that many are not. And those that aren’t should be held accountable.
* Note: Employers cannot dock the pay of exempt employees for hours not worked in a week without jeopardizing the employee’s exemption, along with the exemption of employees in the same job classification working for the same managers (subject to limited exceptions).
Effective Monday, March 23 at 11:59 p.m., and continuing through at least April 6, the state of Ohio, via an order of Dr. Amy Acton, director of the Ohio Department of Health, has closed all non-essential businesses to help combat the spread of COVID-19. Gov. DeWine stated that he would reevaluate the April 6 end date as necessary.
These closures are mandatory. A copy of the order is available here.
To help answer your most pressing questions about how this stay at home order impacts your business and your employees, I drafted this FAQ.
Frequently Asked Questions about Ohio’s stay at home order:
Q: What businesses are open and what businesses are closed? A: All non-essential businesses in Ohio are closed from March 24 through at least April 6.
Q: What are the “essential businesses” that are permitted to remain open? A: The Stay at Home Order deems the following 26 categories of businesses as “essential.”
Healthcare and public health operations, human services operations, essential government functions, and essential infrastructure
Food, beverage, and licensed marijuana production and agriculture
Organizations that provide charitable and social services
Religious entities
Media
First Amendment protected speech
Gas stations and businesses needed for transportation
Financial and insurance institutions
Hardware and supply stores
Critical trades
Mail, post, shipping, logistics, delivery, and pick-up services
Educational institutions
Laundry services
Restaurants for consumption off-premises
Supplies to work from home
Supplies for essential businesses and operations
Transportation
Home-based care and services
Residential facilities and services
Professional services
Manufacture, distribution, and supply chain for critical products and industries
Critical labor union functions
Hotels and motels
Funeral services
Q: We are an “essential business.” What does this mean for us? A: It means that your physical location is open until further notice, business as usual (as best as can be under the circumstances). Employees who have been diagnosed with coronavirus, who are exhibiting coronavirus-like symptoms, or who have been exposed to coronavirus should remain at home and telework if possible. The State has said that law enforcement should not be stopping people on their way to and from work to confirm the need to travel. Nevertheless, it might not be a bad idea to provide letters to employees documenting the essential nature of the business, just in case. Remember, above all else, despite the essential nature of your business, your employees’ health and safety remain the most important thing.
Q: What social distancing measures must essential businesses follow as a condition to remaining open? A: Businesses must take the following proactive measures to ensure compliance with social distancing requirements as a condition to remaining open for business:
Designate six-foot distances, with signage, tape, or other means, to ensure six-foot spacing for employees and customers.
Have hand sanitizer and other sanitizing products available for employees and customers.
Implement separate operating hours for elderly and vulnerable customers.
Post online whether a business is open and how best to reach it, and be available to continue services by phone or remotely.
Q: What other actions must all businesses follow regarding the health and welfare of their employees? A: The Stay at Home Order requires that businesses follow these protocols in managing their employees through this crisis:
Encourage telework and video conferencing when possible.
Actively encourage sick employees to stay home until they are fever-free for 72 hours, symptoms have improved for 72 hours, and at least seven days have passed since the first symptoms began.
Do not require doctors’ notes to validate illnesses or returns to work.
Ensure that sick leave policies are up to date, flexible, and non-punitive to allow sick employees to stay home or non-sick employees to stay home to care for others who are sick.
Separate employees who appear to have acute respiratory illness and send them home immediately.
Reinforce key health and hygiene messages such as staying home when sick, washing ones hands, and proper cough and sneeze etiquette, including hanging posters and providing protection supplies and no-touch receptacles.
Be prepared to change business practices if needed to maintain critical operations.
Q: Are there any instances in which a “non-essential business” can operate? A: Non-essential businesses can maintain “minimum basic operations.” As long as employees comply with the above social distancing requirements, non-essential businesses can still engage in the minimum necessary activities to maintain the value of the business’s inventory, preserve the condition of the business’s physical plant and equipment, ensure security, process payroll and employee benefits, facilitate employees to be able to continue to work remotely from their residences, or for related functions.
Q: We are a “non-essential business.” How do we handle our employees in response to this Stay at Home Order? A: There are myriad questions for non-essential businesses to answer to try to remain open and as operational as possible.
Communication is key. Your employees are worried and scared. Talking to them in person, remotely, or by email is crucial so that they understand what is happening to their jobs.
The Stay at Home Order closes physical places of business that are non-essential, but it does not prohibit the employees of those businesses to work remotely from home.
Wage and hour laws still apply. If employees of non-essential employers are working during the shut-down (i.e., remotely) they must be paid. For hourly workers, this means their regular hourly rate for all hours worked, and time-and-a-half for any overtime after 40 hours worked during the week. For salaried exempt employees, this means their full weekly salary for any week in which they work for even one minute. If employees are not working, then they do not have to be paid, and they would be free to apply for unemployment benefits. It is, however, within a company’s discretion and means to continue paying non-working employees during this shutdown of non-essential businesses.
If you have to cut headcount, you should be furloughing people or laying them off. A furlough is a temporary, short-term layoff with an expectation of recall in the near future. Employees remain on payroll, just with no assigned hours. A layoff is usually of longer duration or permanent and results in the employee’s removal from payroll. This is largely a business decision, not a legal decision. Depending on the terms of an employer’s group health plan, a furlough may permit employees to remain covered. In that case, employers will have to determine how to cover an employee’s share of premiums. A layoff is typically a triggering event for COBRA coverage. If either triggers COBRA, those premiums are typically an employee’s responsibility to pay in full, although employers that are able to do so can choose to pay COBRA premiums for as many months as possible.
Employees who are not working during this shutdown can apply for unemployment from the state. Employers should encouraging non-working employees to apply for these benefits as soon as possible. This should not hurt the employer’s experience or unemployment rating.
Do not forget about paid sick leave and family leave under the Families First Coronavirus Response Act, which takes effect on April 2, 2020. Employees who have been laid off prior to April 2 will not qualify for this emergency paid leave. It is an open issue whether employees who have been furloughed or ordered by the government to stay at home will qualify. The Act provides up to 80 hours of paid sick leave at 100 percent of an employee’s regular rate of pay to employees “subject to a … State … quarantine or isolation order related to COVID-19.” One could interpret the Stay at Home Order as imposing a “State quarantine or isolation order” because it prohibits employees of a non-essential business from working at the business’s physical location. One could also interpret the Order as not imposing a “State quarantine or isolation order” because it has not required employees of non-essential employers to stay at home, but merely closed the physical locations at which they work. I believe the latter interpretation is more reasonable until the state, local, or federal government imposes a broader stay-at-home or quarantine order. Regardless, the Families First Coronavirus Response Act is a floor, not a ceiling, and employers are always able to offer more paid leave benefits than the law requires if they are able and willing to do so.
Q: We have a labor union. Are there any other issues we need to be thinking about? A: Yes. If a collective bargaining agreement covers any of your employees, you have additional things to think about, including layoffs, recall, bumping, seniority, and super-seniority. Collective bargaining agreements can also have their own provisions for sick leave, PTO, vacation, and severance. If you are thinking of changing these benefits, you may need to first bargain with the union.
COVID-19 is rapidly changing how businesses operate. We recognize that organizations need an extra helping hand right now. So we’re offering our platform for free to new sign-ups over the coming months. Sign up today and our Workforce Success team will gladly provide a personal, online walkthrough of our platform to help you get started.
Whether we are Republican, Democrat, or independent, surely we must all agree that every human life is a sacred gift from God. As we support America’s moms and dads, I was recently proud to sign the law providing new parents in the federal workforce paid family leave, serving as a model for the rest of the country.
Now I call on Congress to pass the bipartisan Advancing Support for Working Families Act, extending family leave to mothers and fathers all across our nation.
It’s a bipartisan bill that would provide new parents the ability to borrow against the future tax benefit from their $5,000 federal Child Tax Credit, in the form of a $500 allowance for 10 years.
There is little doubt that the United States needs to do something (anything) to provide new parents with some form of paid family leave. I have serious concerns, however, over a proposal that requires parents to borrow against a future tax credit to take that benefit. I have further concerns over a proposal that does not protect parents who avail themselves of that benefit from retaliation.
It’s good that we are having a national conversation about paid parental and family leave. It will be better when we start talking about proposed laws that will provide real and actual benefits and employment protections to parents.
And it will be best when Congress and the White House get off their collective asses and pass meaningful legislation.
In 2018, 40 states put through legislation on pay equity practices.
There is no shortage of laws that give all people the right to be free from discrimination in compensation, including the Equal Pay Act of 1963, Title VIl of the Civil Rights Act of 1965, the Age Discrimination in Employment Act of 1967, and Title I of the ADA Act of 1990.
Pay equity is a critical issue for our time. It’s proven to drive profits for companies that support it. So why is it taking legislation to get companies to move towards a more fair and equitable pay system?
Perhaps it’s the misperception that pay equity means treating everyone the same way. But equal doesn’t mean fair. The goal of pay equity is not to treat everyone the same — it’s actually just the opposite. You can treat people fairly and still treat them differently. Factors such as educational background, tenure, skill, quality of work, etc., are all variables that can, and should, be factored into the mix. But, biases based on personal attributes, such as race, gender, age, disability, sexual orientation and more, are variables that should not affect pay.
Pay equity is equal pay for work of equal value. It is also used to describe pay comparisons where there is no unexplained difference pay, and that is not the result of defensible and legitimate factors. Therefore, pay inequity is any difference in pay that is unexplained, or not the result of defensible and legitimate factors.
According to the World Economic Forum Global Gender Gap Report for 2018, which benchmarks 149 countries on their progress toward gender parity, the US ranked No. 51 in the world. We can do better. By comparison, Iceland, Norway and Sweden occupy the top three spots. And, although many countries have achieved important milestones toward gender parity, much still needs to be done.
Pay equity includes total compensation — including overtime pay, bonuses, stock grants, profit sharing and bonus plans, and yes, life insurance, PTO and holiday pay, travel allowances, reimbursement for travel expenses. However, we need to remember all the processes that result in a worker paycheck, including promotions, performance reviews, merit raises, access to the CEO and representation on the leadership team since they all can impact pay differences over time.
And, while individual organizations have their own formulas for fair and equitable compensation, everyone will benefit by evaluating pay equity in the broader ecosystem. Solving pay equity comes from organizations and their leaders who take ownership of culture, pay programs and total rewards.
The first step is for organizations to be willing to take a look at their own data and processes. And then be willing to acknowledge it if there are issues around pay equity and work to solve for it. Some may desire to make their process and findings public inside their companies, and then share the plan to monitor it regularly to ensure continued pay equity.
Here are three things to get started:
Analyze average pay of people within an organization to find patterns. Start by role-to-role comparisons, then group to group, the protected classes.
Evaluate the hiring processes to ascertain diversity of teams and the ways in which your process results in a wide range of candidates.
Evaluate the processes which reward, promote, and give feedback to your workforce. Are they equitable or did the majority of raises go to one gender, racial, or age group?
To solve for pay equity issues we must look closely at representation. We need more women, people of color, and the LGBTQ community in leadership positions such as on corporate boards. According to Heidrick & Struggles, men hold 93 percent of the CEO positions in U.S. companies. Further research from ISS Analytics found that the percentage of female directors is just 24 percent in the United States.
Total rewards programs include anything that signals to the employee that they are important. The most effective total rewards programs are enacted through the lens of inclusion and take into consideration representation from under represented groups.
It’s also critical to be transparent as to how rewards are given out and how employees can navigate the system. Today, most employees do not have any idea how their pay packages are put together. An organization’s goal is transparency so that people understand how to navigate the culture and achieve their potential at work, which affords them the chance to have a great life.
For example, ACIPCO, an international provider of clean energy technology and services, provides quarterly profit sharing, an on-site health care facility and rewards workers for good tips/suggestions. They also give access to the company plane and yacht when employees need it — and this is not based on hierarchy, everyone gets access. It’s no wonder that they consistently land on Fortune’s 100 Best Companies to Work For and, in an industry where turnover is 80- to 100 percent, they have less than .05 percent a year.
Starbucks offers free Spotify premium and free online classes at Arizona State University and, of course, free coffee. Netflix offers one-year parental leave and Salesforce.com provides commuter benefits, educational reimbursement, refinancing of student debt and 24-hour travel assistance.
Because of the impact on culture, customers, and on the regulatory environment, it’s vitally important that attention to this comes from the C-suite, not just from HR. The critical role for HR is to observe, rebuild systems, make sure the data is accurate and challenge the C-suite and the existing ways of doing things to be the champion of the people experience.
Here are the takeaways:
Don’t shy away from the issue of pay equity. Embrace its importance and build processes around the issue rather than waiting for federal or state laws to dictate what you need to do.
Analyze and understand current plans that are in place. If a woman or minority is disadvantaged from the start of employment, that’s a problem that will grow exponentially.
Consistently look at and monitor the process, review it and test it.
Assess gaps from these measurements and make changes accordingly.
Institute transparency between employees and leadership so that you’re setting the narrative and telling your own story rather than allowing social sharing to drive it and derail it.
In short, paying people fairly is a great idea for many reasons and a great business practice. Don’t be afraid to look at your own pay equity issues. It’s better to be in the know.
The result is a boost in reputation, the ability to recruit the best talent and to provide employees the ability to maximize their contributions to the organization.
According to CNN, Chipotle has agreed to pay a $1.3 million fine for more than 13,000 child labor violations at over 50 of its Massachusetts restaurants.
The state’s attorney general’s office accused the company of forcing teenagers to work without proper work permits, late into the night, and for too many hours per day and week. It’s the largest child labor penalty in Massachusetts history.
Writing at Inc.com, Suzanne Lucas (aka the Evil HR Lady) makes the excellent point that these failings fall squarely on the shoulders of management.
Employees, even adult employees, aren’t expected to know and comply with all labor laws. … It’s not up to a 17-year-old to clock out no later than 9:59 pm. It’s the manager’s responsibility to make sure it happens. This can be difficult for managers—and can require some complicated scheduling or hiring more adults than teenagers. Some teens want to work more hours and are happy to keep their mouths shut. It doesn’t change the law around it. Managers need training on the law and how it differs between adults and minor employees.
So what are the rule of the road for child workers? Each state’s laws differs. Here’s what Ohio law says on the issue. Ages 14 and 15
When school is in session: i) they cannot work between the hours of 7 p.m. and 7 a.m.; ii) they cannot work for more than 3 hours on any school day; and iii) they cannot work more than 18 hours during any school week
When school is out of session: i) they cannot work between the hours of 9 p.m. and 7 a.m.; ii) they cannot work more than 8 hours per day; and iii) they cannot work more than 40 hours per week. Ages 16 and 17
When school is in session: i) 11 p.m. before a school day to 7 a.m. on a school day (6 a.m. if not employed after 8 p.m. the previous night); and there are no limits on hours worked per day or week.
When school is not in session, there are no limits on starting or ending times, or hours worked per day or week.
Unlike adult workers, all minors are required to have a 30-minute uninterrupted break when working for more than five consecutive hours.
Prohibited Occupations
All minors are prohibited from working in the following occupations:
Slaughtering, meat-packing, processing rendering
Operation of power-driven slicers; bakery machines; paper product machines; metal forming; punching or shearing machines; circular and band saws; guillotine shears; woodworking machines
Manufacture of brick, tile, and kindred products
Manufacture and storage of chemicals or explosives, or exposure to radioactive and ionizing radiation substances
Coal mining and mining other than coal
Logging and sawmilling
Motor vehicle, railroads, maritime, and longshoreman occupations
Excavation operations, wrecking, demolition, and shipbreaking
Power-driven and hoisting apparatus equipment
Roofing operations
Additional Prohibited Occupations for 14- and 15-Year-Olds
Manufacturing and warehouse occupations (except office and clerical work)
Public messenger services occupations
Work in freezers; meat coolers and all preparations of meats for sale (except wrapping, sealing labeling, weighing, pricing, and stocking)
Transportation; storage, communications, public utilities; construction and repair
Work in boilers or engine rooms; maintenance or repair of machinery
Outside window washing from window sills, scaffolding, ladders or their substitutes
Cooking, baking, operating, setting up, adjusting, cleaning, oiling, or repairing power-driven food slicers, grinders, food choppers cutters, baker type mixers
Loading or unloading goods to and from trucks, railroad cars or conveyors
Work with cars and trucks involving pits, racks, or lifting apparatus
Inflation of tires mounted on rimes equipped with a removable retaining ring
For-profit door-to-door employment (unless the employer is registered with the Ohio Dept. of Commerce Division of Labor & Worker Safety)
As one can imagine, the Department of Labor and state attorney general offices take child labor violations very seriously. Just ask Chipotle. And ignorance is no excuse.
Writing about workplace health and health care for the past several years has meant reading my fair share of buzzy health trends.
That’s why I’ve enjoyed reading about the worst wellness trends of the 2010s and discussing it with my friends and family. Vice even did a March Madness-style bracket, which I found to be fun.
Not surprisingly, the anti-vax movement took Gold, with the keto diet taking Silver.
I was especially happy that corporate wellness made it to Round 3! It lost to another unfortunate workplace trend, #NoDaysOff. You know, that crazy idea that people who work 90 hours a week and never take a break are superior to other employees, so they brag about it online? Woof.
Still, I’m glad workplace wellness made it as far as it did, because academic studies have shown that they’re not effective at cutting health costs or changing habits. They mostly shift health care costs to employees, hence the “cost-savings.” Here was Vice’s reasoning:
Corporate wellness is the latest iteration of workplace wellness, which has been around since the late 1800s and has always existed to increase worker productivity. The current iteration of corporate wellness is mainly focused on mindfulness, but can also include, uh, taking DNA samples from employees or harassing a double-mastectomy patient into getting a mammogram. Surprisingly, these programs don’t actually contribute to workplace wellness. Go figure!
This wonderful bracket made me think about the worst trends I’ve seen in employer health in the past several years.
Some of these relate to other parties that intersect with employers, and none of this is to throw shade at employers. A lot of good things have gone on this decade, as well! Reminiscing brings up cringe-worthy memories for everyone. For example, 10 years ago I used to crochet my own ill-fitted beanies and wear them out in public because I thought they made me look artsy. It’s not fun to revisit that one.
Here are my list of worst health trends, in no particular order.
1. The “culture of health” trend: Recently U-Haul got mixed reactions online for revealing that “it will no longer hire people who use nicotine in any form in the 21 states where such hiring policies are legal.” I’ve seen positive feedback from health advocates online, but ultimately, this is a scary, slippery slope. Are we headed in the direction of a person’s employability being increasingly more linked to their habits or their health?
Think about how the Affordable Care Act protects people with pre-existing conditions when it comes to accessing health insurance. Individuals with a health condition should have just as much of a chance at getting a job as healthy individuals. Health status shouldn’t be akin to a line on your resume.
2. Health care consumerism: One of my favorite articles in the past several years was a New York Times op-ed arguing that we have to stop referring to people paying for health services as “shoppers.”
I know, I know… This movement of encouraging individuals and employees to be smart health care consumers isn’t going away soon, probably. But I agree with the argument. Encouraging employees to be educated about health care is a good thing, but marketing health care as merely a consumer good rather than a vital service people need to survive seems misleading to me.
We should stick with “patients” instead of “health care consumers” or “shopper.” And, like this op-ed suggested, we can simplify our language and just say that patients “pick” or “choose” a health plan rather than “shop for” it.
3. Pseudoscience/misinformation: A big piece of wellness this month is “The Goop Lab with Gwyneth Paltrow” arriving on Netflix. Historically, Paltrow has received criticism from health advocates and medical professionals for spreading misleading or false health information through Goop, her wellness company. Yet Goop is still a big money-making player in the wellness industry.
Meanwhile, people also get misinformation about diets and workouts from social media wellness influencers, who may not be peddling effective or safe advice.
The bottom line is, take medical advice from professionals, not celebrities or influencers. And this doesn’t just apply to individual people. Health risk assessments, which some employers rely on, sometimes contain misinformation, according to Slate.
4. Overhyped health studies: Health journalism is infamous for the “big scary study.” A news outlet gets its hands on some research and twists a finding into something that will get attention. That’s how you get headlines about how some number of glasses of red wine a day reduces your chances of getting cancer.
According to the “How bad science can lead to bad science journalism — and bad policy” from the Washington Post, this also impacts employers’ decisions. This article gives the example of accountable care organizations, which employers may choose to offer employees. The best available evidence shows ACOs don’t work, the article cited. Still, journalists have sung their praises based on studies with deep design flaws.
I’ve written about this in more detail before, but both individuals and benefits decision makers should approach health journalism skeptically. Don’t be afraid to ask questions about how the research was conducted and what might be the limitations of the study.
Finally, my honorable mention goes to consumer-directed genetic tests — specifically the fact that individual or employer consumers may get marketing talking points rather than well-rounded information when companies try to sell these products to them.
Employee engagement levels are woefully low. The latest Gallup data shows only 34 percent of employees are actively engaged in their work.
That means more than half of all employees are not engaged in their work, and 13 percent are actively disengaged, according to the survey.
These are troubling numbers given the proven benefits that employee engagement brings to a business, which include higher share prices, greater customer loyalty, lower turnover, easier recruiting and a host of other desirable business outcomes.
The good news in this story is that HR is not to blame. While HR leaders may be responsible for overseeing benefits programs, gathering employee engagement survey results, and rolling out employee programs and campaigns, they are not the ones who actually move the needle on engagement.
Studies consistently find that employee engagement hinges entirely on the way leaders lead and the kind of culture they create, said Patrick Kulesa, global head of employee research for Willis Towers Watson in New York. “The numbers show that how leaders inspire people with their strategy and mission determines whether employees will be engaged,” Kulesa said.
The problem is that leaders rarely take responsibility for employee engagement. They see it as a people issue, so they assume HR will fix whatever is broken. This is one of many mistakes leaders make when it comes to engagement.
Here are some of the other mistakes leaders make that damage employee engagement and how they can do better.
Leaders assume company perks will make a difference. Offering free coffee, half-day summer Fridays and other creature comforts may deliver short-term positive vibes from overworked employees. But if you aren’t also addressing the core problems in your culture — like a lack of acknowledgement for work well done, managers who can’t be trusted or limited opportunities for development — no amount of free snacks will solve your employee engagement problems, Kulesa said.
Leaders talk, but they don’t listen. “Employees don’t need to be told what to do. They need to be encouraged to trust their instincts,” said Kevin Hancock, CEO of Hancock Lumber in Casco, Maine and and author of The Seventh Power. Hancock learned this lesson after acquiring a rare voice disorder in 2010 that made it difficult for him to speak. To protect his voice, whenever anyone asked him a question, he responded with, “What do you think is the right answer?” He wasn’t trying to improve engagement, but that’s what happened. Over the course of a year, engagement levels rose as employees gained confidence in their ideas and became more innovative and invested in their work. It made him realize the power of distributed leadership, and giving everyone a voice.
Leaders think employees should serve the business, not the other way around. When business leaders make financial performance the most important factor in every decision, employees become slaves to business outcomes. “But what if you rethink the purpose of work?” Hancock said. When leaders prioritize improving the lives of employees, improved employee engagement is the natural result. That leads to better performance, higher revenues and other business benefits that every leader wants, he said. “When the company exists to serve the employees, it creates a stronger company and a better future for everyone.”
Leaders focus on numbers, not outcomes. When leaders only care about achieving the right employee engagement score, they lose focus on the ultimate goal, said Jim MacLennan, founder of Maker Turtle, a digital transformation consulting firm, and author of “Don’t Think So Much.” “Once they reach the target metric they move on to something else.” That makes employees cynical about their motives and can cause any short-term improvements to quickly sag. Instead, he suggested using employee engagement surveys to identify the biggest problem in your culture, then to spend the year solving it. “Keep it simple and define what ‘better’ looks like so it doesn’t get diluted,” MacLennan said. Once you see improvements, move on to the next thing. When leaders focus on outcomes rather than metrics, continuous improvement becomes part of the way things are done.
They mistake surveys for conversations. If you want engagement to improve, leaders have to actually talk to employees, listen to their needs and build a corporate culture that inspires trust and respect. “You can’t do that with a survey,” MacLennan said. “Once you wade in and start having conversations, you’ll be amazed at what you learn.”
Money, power and status do not protect people against mental illness.
Executives are affected by mental illness as often and as severely as other segments of the workforce, said Dr. Samuel Ball, director of psychology and executive programs at Silver Hill Hospital. He specializes in treating executives suffering from mental illness.
Alcoholism is one of the most common afflictions, Ball said, followed by personality disorders and mood disorders such as depression and anxiety. Executives struggling with depression may have difficulties with productivity and have to force themselves to perform their job due to lower energy levels and interpersonal skills, while some people afflicted with alcoholism can drink heavily while often being functional at work.
A group of high achievers may be initially reluctant to admit the problems they’re experiencing, Ball said. They feel a “different kind of shame about the problems they’re struggling with because they’re on a pedestal. So many people rely on them, [and] so many people look up to them at work and in their family.”
They need to feel secure, he added, describing a patient who felt comfortable speaking up because the CEO gave him a clear message that they wanted him back after treatment.
Home Life Versus Work Life
An executive’s spouse and family play a critical role in convincing them to get help.
“In a number of cases, the problem is not as widely known at work as it is at home. And the spouse has gotten to the end of their rope with [their] concerns,” Ball said.
At work, the executive will “put on the best face or a mask of maintaining their competency” because they’re motivated to maintain their career status. But when they get home, it’s different. Their spouse will usually be the one to convince them to get treatment.
If someone has these health issues, it can negatively impact their spouse and children, especially children in their teenage years. According to the Centers for Disease Control and Prevention, growing up in a family with mental health or substance abuse problems is considered an adverse childhood experience — a potentially traumatic event that occurs in childhood and increases people’s risk for health problems as adults.
This group of patients generally have the means to afford outpatient treatment, which is a good first step, Ball said. The patients he sees, though, are often the ones too ill for outpatient treatment. Instead of living at home and regularly seeing a psychiatrist, they need inpatient care. Ball will get a phone call from the spouse, who has done the research to find the ideal place for inpatient care — usually somewhere in a different city that’s nearby enough that family can visit.
How Peers and Employees Can Respond
When an executive’s mental health is severe, employees and peers may notice. But knowing what to do or how to express sympathy or concern is different. For those employees who report to this higher-ranking person, it can be difficult to know what to do, if anything.
An exception might be if an executive has a trusted assistant who has been with them for a long time, Ball said. This type of direct report may have some ability to do something about the situation, especially if they play a “work spouse” role in this person’s life. But a majority of direct reports are not in this situation.
Typically, these high-ranking people won’t go to HR or contact an employee assistance program, Ball said.
“These executives report to the most senior people in the organization. And when they do finally admit to having a problem, if they do admit it, it’s not clear to them where to go in the organization to get support,” he said.
Usually it’s the one or two people above them — usually the CEO or COO — telling them to go on leave to get treatment that finally makes them get help, Ball said.
“They’ll say something like, ‘You’re incredibly valuable to us and we want you back, but you’re not well enough to work now. Take a month, two months, but we want you to get into a treatment program,’” he said.
Still, HR has power here. Lower-level employees may bring their concerns to HR, and an HR representative can speak directly with the CEO or COO, who typically are not surprised by the information, Ball said. From there, the CEO or COO can lead the intervention with the sick executive, and the HR person can stay in the meeting as an observer, especially if there’s been any sort of wrongdoing or complaints about the executive’s behavior.
It’s especially helpful if their boss can show sympathy in this discussion, Ball said.
“When this has gone well, their boss is either someone who has struggled with depression or alcohol, or it’s in their family. And they’ll have that discussion with their affected employee and say something like, ‘I know what this is like, and you’ve got to take care of this,’” he said.
Fighting Stigma
A prime reason executives fear coming forward with mental health issues is the fear that their progress at the company will effectively stall and that people will wonder when their next relapse will be.
“Even if they don’t lose their job, the reputational fallout of people knowing they’ve gone off to rehab is significant,” he said.
Some workplace experts encourage leaders to be open about their mental health struggles in order to decrease stigma for employees. However, since even these leaders experience stigma, talking openly about mental health at work is a hard but courageous thing to do, according to Ball.
Still, he said that it does have a positive effect on the workplace when leaders are honest and open about their struggles. He mentioned a patient who, upon preparing to leave soon, plans to go back to work and share broadly with the workforce that he’s been on leave treating his depression. This executive said he wanted people to take better care of themselves and recognize the signs that he did not.
“I think it’s courageous when people do that,” Ball said. “It’s helpful to employees when they send that message.”
The phrase “drugs in the workplace” understandably elicits an alarmed reaction from employers. But the truth is the amount of substances that are considered drugs are many and varied, and many are commonplace for an employee’s daily routine.
Substance use abounds in the workplace — and that’s just legal substances. Employees roll into work and can’t get anything done without their daily dose of caffeine. Colleagues meet in the break room with cases of beer to partake in the regular happy hour. Someone anxious about an upcoming deadline picks up a CBD-infused coffee at breakfast or a CBD-infused burger for lunch. And don’t forget about that roll of antacids or bottle of ibuprofen in the desk drawer or an energy drink in the fridge for a mid-afternoon pick-me-up.
In short, regulating substance use among employees is not simple and straightforward. Drugs like caffeine and alcohol are legal, but employers may get into trouble if an employee’s alcohol consumption leads them to cause problems during the employee get-together.
Cannabis is still illegal federally in the United States as more states legalize it for medical and recreational purposes, causing confusion for employers who can’t keep compliance straight among the constant changes. And, a recent surge of “smart drugs” — substances taken to improve creativity, attention, executive function and working memory — poses major ethical questions about whether it’s OK to take a mental steroid to be productive at work.
PRODUCTIVITY
Much has been made about college students taking medication to stay productive and awake, but that habit doesn’t end at graduation.
People use cognitive enhancing drugs — also referred to as “smart drugs” — to improve their creativity, attention, executive function and memory. Much like athletes may use performance-enhancing drugs to improve speed and endurance, employees may use smart drugs to be productive at work.
“Some people start using them in college and then they’re carrying that habit with them into the workforce. And things don’t get easier when you go from college to the workforce,” said Nick Heudecker, vice president of research-data & analytics at Gartner.
The use of smart drugs isn’t limited to an industry or economic status, Heudecker said. Even though Silicon Valley workers taking microdoses of lysergic acid diethylamide — more commonly known as the hallucinogenic LSD — to stay focused has received media attention, knowledge workers aren’t the only ones taking part. “Every workforce population is engaging in cognitive enhancement in some way,” Heudecker said.
ADHD drug Adderall is by far the most common smart drug, he said, followed by Ritalin, or methylphenidate. Modafinil, a narcolepsy drug, is another common cognitive enhancer. Energy drinks and caffeine — common parts of many people’s daily routines — are also considered smart drugs, according to Heudecker. And the over-the-counter dietary supplements called nootropics claim to improve people’s cognitive abilities, as well. Nootropics alone, according to Grand View Research, Inc., is a $2.17 billion market as of 2018 and expected to be a $4.94 billion market by 2025. Meanwhile, microdosing LSD means that the user takes about 1/10th of a dose as a way to “break down cognitive barriers and help them be more creative,” Heudecker said, adding there is no research on how microdosing LSD impacts users’ health.
The nickname “smart drug” is a misnomer. “These drugs don’t make you smarter. They allow you to better use the facilities you already have,” Heudecker said. They do so by helping people stay more focused or awake. Users may have that “feeling of being in the zone” for longer.
The use of these substances “is becoming more prevalent, not less,” he said, adding that too few employers are thinking practically about how they will address smart drug use in their workforce.
Why People Take Them: In 2018, The European Agency for Safety and Health at Work, or EU-OSHA, released the report “Managing Performance Enhancing Drugs in the Workplace: An Occupational Safety and Health Perspective” to explore the trend of smart drug use among workers.
Employees take them for “increased monitoring of employee health, stress levels, alertness and fitness,” especially when these measures are used to judge an employees’ ability to do their jobs. “It is possible to anticipate that employees under this level of scrutiny may turn to various pharmacological means to allow some control over biometric readings,” the report noted.
Workers in low-paid jobs that are not protected under standard labor laws may feel increased pressure to hit certain productivity levels, especially since they are increasingly being monitored by their employers. Not wanting to lose a job they rely on, they may turn to smart drugs. “Electronic means of monitoring employees are likely to be accompanied by an increase in the stresses on workers,” the article noted.
Employers in general don’t seem aware that this trend is happening, Heudecker said. “It’s not like someone goes out for lunch, has a few martinis, and their speech is slurred. It looks like, ‘I’ve got a really productive worker.’ You’re not going to ask questions because it’s a positive outcome,” he said.
While employers may appreciate that their employees are being more productive, if employees must turn to drugs to reach those performance goals, then the employer should consider how the company culture or policy drove them there, Heudecker said.
“There’s a lot of demand to always be on, so you need to give your employees permission to be off,” he said. His 2017 Gartner report “Cognitive Enhancement Drugs Are Changing Your Business” also explored the main reasons that push employees to take these substances. Basically, employees either view smart drugs as an opportunity to push the boundaries of what they can accomplish in the workplace or feel coerced into taking them to maintain performance and keep up with their workload.
If employees feel forced, that has the potential to get employers in trouble. “This may expose organizations to legal risk if CED users obtain drugs illegally because they felt forced by colleagues or management,” the report noted.
Employer Response: Brian McPherson, labor and employment attorney at Florida-based law firm Gunster, has never had an employer raise the issue of smart drugs.
Medical cannabis is legal in Florida and that’s received all the attention, he said. “[Employers don’t have] the time or capacity to focus on the other issue that is brewing somewhat underneath.”
Studies support the increased use of Adderall, Ritalin and other drugs for performance, he said. Still, most employers try to stay away from getting involved in the prescription drugs employees are taking, and they assume they are complying with their physicians’ directions.
“We know it’s happening on a grand scale, at least more than it has in the past, but employers aren’t really talking about or dealing with it,” McPherson said.
Heudecker suggested policies companies can adopt to directly address smart drugs. A chief human resources officer can work with other leaders to draft a policy around cognitive enhancer use in the workforce. They also can support “non-pharmaceutical cognitive enhancement” — practices that naturally help people be more productive by “improving work-life balance, adjusting work schedules, promoting physical activity and educating employees on healthy nutrition and sleep practices,” Heudecker said.
An employer’s response also has to respect the fact that many smart drugs are prescription drugs that people need. “You don’t want to alienate people who need something for their ADHD,” Heudecker said.
THE LEGAL LANDSCAPE
The substance that employers mostly ask about is cannabis, said McPherson. Since medical cannabis is legal in the Florida, McPherson has fielded many questions about its use.
All indications point to cannabis laws continuing to progress in more states, he said. Once states approve it for medicinal purposes, the “floodgate starts to open” and there is a “general march toward recreational use.” Currently, 33 states, the District of Columbia and Puerto Rico have passed laws broadly legalizing marijuana in some form. As of Jan. 1, 2020, 11 states — Alaska, California, Colorado, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont and Washington — and the District of Columbia have adopted laws legalizing marijuana for recreational use.
“As long as marijuana remains illegal under federal law, employers are getting a comfort level that they can still enforce the drug-free workplace tests for marijuana,” he said. “If it ever becomes legal under federal law, that will really change the landscape, and it will become a much more complex situation.”
Drug use among many U.S. sectors is growing, according to the Quest Diagnostics 2019 “Drug Testing Index.” The data involved in this analysis come from pre-employment testing for safety-sensitive positions or drug-free workplaces, said Barry Sample, senior director of science and technology at Quest Diagnostics, which has been annually analyzing workplace drug testing data since 1988.
Cannabis is the most commonly detected drug in the workplace, according to the “Drug Testing Index.” Positive tests have increased in most sectors. Meanwhile, positive test rates have declined for cocaine, heroin and opiates.
Interestingly, the inclusion of cannabis in testing panels may vary by state, the index showed. In almost all states, 95 percent of organizations still test for it when they have the option. Colorado and Washington, the states where recreational use has been legal for the longest time, saw a 4 percent decrease in organizations testing for cannabis between 2015 and 2018.
There may be differences by industry, Sample added. “Where there are generally less skilled workers, employers are having difficulties finding employees that will pass all the background screening, including drug testing,” he said. “They may be making a risk-based judgment on their part that ‘We’re going to take the chance and ignore the use of marijuana, because we really need people on board.’ ”
Meanwhile, two organizations have announced more nuanced drug tests for cannabis that may hit the market in 2020, according to Business Insurance. A research team at the Swanson School of Engineering at the University of Pittsburgh has developed a breathalyzer prototype, and Oakland, California-based Hounds Labs Inc. plans on bringing a breathalyzer to market in 2020.
Such tools could help detect marijuana use, which can stay in a person’s system up to 30 days after consumption, McPherson said. “The employers I’ve talked to about these tests are excited and hopeful about them,” he said.
Dan Harrah, senior associate at Mercer and a consultant specializing in behavioral health and health care operations, is skeptical about these tests. “The science of impairment is not settled yet. There’s a lot of subjectivity,” he said.
There will need to be a way to review these tests and see how effective they actually are, he added.
Psychedelic Legislation: While laws regarding cannabis use is moving rapidly, legislation on psychedelics is slower, said McPherson. Two cities — Oakland and Denver — have decriminalized psychedelics such as magic mushrooms, and the Chicago City Council in October 2019 approved a resolution that experts say could pave the way to decriminalizing them. The resolution uses the term “entheogenic substances,” defined as any range of natural plants or fungi “that can inspire personal and spiritual well-being,” as well as other psychological and physical benefits.
“The most alert employers are watching what’s going on with the psychedelics and they are concerned,” McPherson said.
Regardless of the substance, he advises employers to stay informed.
ADDICTION
A person with an addiction is hyper-focused on obtaining their drug of choice and getting that high, which can affect their hygiene, sleep, basic social behaviors and work performance, said Andrea Elkon, clinical psychologist and director of behavioral health for Alliance Spine and Pain Centers. This hyper-focus applies to substances such as nicotine, alcohol or opioids as well as behaviors like gambling or shopping.
An employee struggling with a serious substance addiction is fairly obvious to spot, Elkon said. They may consistently come in late, leave early or not show up to work at all, take extended lunch breaks or exhibit erratic behavior such as falling asleep at their desk or acting more emotional than usual.
In such cases, managers need to be assertive, Elkon said. It may be an uncomfortable subject, but not enough people know how to handle it, she said. Managers should learn how to take action — sooner rather than later — while still showing concern toward the addicted employee.
When an employee does not yet have a serious addiction but is on the path toward one, managers can still notice behavior patterns like absenteeism that may point to a substance problem. “That is a way to address the early signs, to focus specifically on the behaviors that are disruptive to the workplace,” Elkon said.
Employer Communication: Many employers have benefits programs in place to address addiction but not an environment that allows for open conversations about substance use, Harrah said.
“When it comes to behavioral health, everybody is able to talk about [how they] didn’t sleep well last night, and there’s no stigma around that. But nobody says, ‘I’m really thinking about cutting down on my drinking.’ There’s more stigma around that statement.” he said.
More employers have been taking on behavioral stigma, but there’s still work to be done. And the lack of communication around substance use benefits can lead employees down the wrong road, Harrah said. For example, if someone with an addiction realizes they need help, oftentimes the first thing they do is Google treatments. While the employer plan may include in-network carriers with good programs for addiction, a simple internet search can lead to low quality, out-of-network care, he said.
“One of the things that I caution my clients on is you can have these supportive conversations, but you better understand what programs are in place. Because once you start having those conversations, your employees start to come to you, whether for themselves or a family member,” Harrah said.
Substance abuse and mental health benefits also belong in open enrollment conversations, said Morgan Young, vice president of client services, employee benefits at insurance brokerage Holmes Murphy. Young didn’t mention mental health and substance abuse benefits in a recent open enrollment meeting, and an employee later asked if the company covered mental health benefits. Young was reminded of how important it is to share that message to employees.
Substance abuse benefits should go beyond the employee assistance program, she added. Employers consistently see low utilization of EAPs and try to convince employees to use them more, but they’re not going to be the only solution, she said.
“We need to understand that while an EAP may be a good tool for some, it’s not going to dissolve all the needs we have. We need to come up with different tools, resources and policies and make them available to employees,” she said.
Elkon suggested resources that could help employees or dependents with addictions. One of the first steps is sending them for a substance abuse risk evaluation, she said. These evaluations can tell employers about the employee’s risk of substance abuse problems and treatment options.
If an employee does have a problem, employers can respond by showing concern and having treatment resources available, Elkon said. The employee could use a leave of absence to get the necessary treatment, with the assurance that they won’t lose their job while they’re getting treatment.
“If someone is showing any signs of addiction, it’s important to show concern but be firm with that person sooner rather than later because it could spiral and affect other co-workers.” she said.
Pharmacy benefit managers can help to reduce unnecessary opioid prescribing by improving coordination of care among physicians, pharmacists and patients to identify when the potential benefits of these medications outweigh the risks.
More than 10 million people in the United States misused a prescription opioid in 2018, and the opioid epidemic cost the country $179 billion including mortality, health care expenses, lost productivity, criminal justice expenses and assistance. The National Safety Council notes that the annual direct health care costs of individuals who misuse opioids are 8.7 times higher than those who do not.
The opioid epidemic offers an example of a preventable, complex public health and safety issue that has arisen due to a perfect storm of causative factors. Consequently, it requires multiple stakeholders to develop and deliver an effective solution to help lower costs and improve patient health outcomes. These stakeholders include health care providers, pharmacies, drug manufacturers and even employers.
However, the pharmacy benefit manager is one player in the opioid crisis that fills a critical role by employing clinical programs to ensure safe and appropriate utilization of medications. The PBM is a third-party administrator of prescription drug programs and primarily responsible for contracting with pharmacies for network services, negotiating discounts and rebates with drug manufacturers, developing and maintaining the plan’s list of covered drugs (a formulary), and processing and paying prescription drug claims.
PBMs have become an increasingly important part of health benefits since they first entered the market in the 1970s. Today, three pharmacy benefit managers control more than 80 percent of the American market. All are part of massive health care conglomerates that have interests in other aspects of the benefits food chain — from retail pharmacies to medical insurance.
This can create conflicts of interest, as these mega-corporations stand to profit from every stop on a patient’s journey. These conflicts of interest can in turn leave employers and patients vulnerable to increasing health care costs and crises such as the opioid epidemic.
The American public, from the employee to the executive suite and human resources professionals, as well as those who make decisions about employee-sponsored health care, seeks change in today’s profit-driven benefits industry. Here are just a few of the reasons why:
• In 2017, the average annual cost for prescription drugs used to treat chronic conditions reached $20,000, and drug prices increased at twice the rate of inflation.
• American families spent 67 percent more on health care in 2018 compared to 2008.
• Employer contributions toward health care costs rose 51 percent in the same period.
• More than 66 percent of bankruptcies are due to medical expenses or time out of work as a result of illness.
Mergers and acquisitions may answer the health care industry’s need to create new sources of revenue, but they can leave patients and plan sponsors behind. In a sector dominated by an outsized few, consumers all begin to look the same.
To compound the issue, PBM operations are often seen as veiled enterprises. Complex contracts and opaque business practices conceal the flow of dollars, making it difficult for plan sponsors, HR professionals and members to see what they’re paying for. It may seem impossible to demand meaningful change from such a sizable arm of the health care industry, but it doesn’t have to be.
Human resource professionals occupy a unique position in the U.S. workforce. As part of the decision-making process when it comes to employee benefits, HR leaders can demand change from the industry by learning how to spot PBMs that put member and plan sponsor interests first and move away from PBMs that don’t.
This requires understanding today’s health care landscape and how PBMs should be transforming to work for employers, not just for themselves. Here are four key indicators that demonstrate a PBM has broken from the status quo to operate in the best interests of its clients and their members:
• Pay-for-performance business model.
• Comprehensive clinical programs.
• Complete care coordination.
• Transparent contracting.
Pay for Performance
Most PBMs today operate on a fee-for-service model in which they are paid each time they perform a given function, such as a prior authorization review. While this type of business model is common, it fails to tie the PBM’s financial success to how well the company performs for consumers.
No matter how well or poorly the PBM helps the plan sponsor manage prescription spend, the PBM is paid the same. In some cases, it may even be paid more if the plan’s prescription spending grows based on profit incentives tied to per-claim fees and hidden revenue streams.
That’s why a pay-for-performance business model has so much potential in the PBM industry. Pay for performance is a relatively new model, so far only explored by a few PBMs despite its power to help tie the companies’ interests more closely to those of members and plan sponsors.
The pay-for-performance model helps to support transparent PBM operations by holding PBMs responsible for the quality of the work they do and putting dollars at risk if a plan sponsor’s prescription spending rises above a guaranteed maximum. This puts skin in the game and places people, not profits, first.
Under this type of pay-for-performance structure, the PBM is held accountable. Its success is tied directly to quality of service and whether it reduces overall drug spending through proactive clinical programs that help reduce inappropriate utilization. The plan sponsor is rewarded by performance guarantees tied directly to the PBM’s clinical programs and how well they improve health outcomes and lower costs over time.
This new approach helps encourage a straightforward pricing structure that does not benefit from unnecessary prescribing practices. It eliminates conflicts of interest and places plan sponsors and their members first.
Comprehensive Clinical Programs
Clinical programs can be easily overlooked when it comes to their importance not only in safeguarding patient health, but also in the amount patients and plan sponsors pay for health care each year. While many see programs such as step therapy and clinical reviews for prior authorization as sources of member disruption — and they can be if handled poorly — it’s important to recognize that these programs can positively impact plan sponsors and members alike.
An estimated 40 percent of opioid overdose deaths in 2016 involved a prescription opioid, highlighting the dangers that clinical programs have the chance to prevent. From 2011 to 2016, prescriptions were written for dozens of opioid tablets following surgeries, even when procedures would cause relatively little pain.
This prescribing pattern has tremendous impact, as the probability of long-term opioid use and abuse increases sharply in the early days of therapy, particularly after five days. To prevent addiction and abuse, it is vitally important to ensure patients take prescription opioids no longer than is medically necessary.
PBMs can help to reduce unnecessary opioid prescribing by improving coordination of care among physicians, pharmacists and patients to identify when the potential benefits of these medications outweigh the risks. Comprehensive clinical programs offer a strategic way to ensure medical necessity while protecting patients.
Data from the Centers for Disease Control and Prevention show that the rate of opioid addiction is relatively low if only one day of opioid therapy is prescribed initially, with just 6 percent of patients on opioids one year later. The likelihood of addiction increases sharply with eight or more days of prescription opioid therapy (13.5 percent of patients on opioids one year later). This data demonstrate just one way that clinical programs, such as starter dose and quantity limits, can help protect patients.
Starter dose programs limit the initial supply of a drug to help determine its appropriateness for the patient. In the case of opioids, my company, BeneCard PBF, found that a program limiting the initial supply to three days helped curb the number of prescription opioid claims by 67 percent as part of a comprehensive, clinically driven approach preventing opioid addiction. The starter dose program helps avoid members having excess opioids on hand when therapy is needed for just a few days. This approach also reduces the risk of opioid fraud, waste and abuse.
Quantity limits, which control how much of a medication can be dispensed at a time based on medical best practices, can provide similar protection. This helps to prevent unused medication from building up in the home, where it presents a danger not only to the patient, but to others who may be accidentally exposed to the drug (such as children and pets) or who may be at risk of using the medication without a prescription and a physician’s oversight.
Carefully designed and managed clinical programs have the power to save lives and to protect members and their employers from fraud, waste and abuse of prescription medications. There is an urgent need to do so that extends beyond controlled substance abuse. The United States spends about $21 billion on medication errors and $935 billion in overall health care waste each year. However, many PBMs rely primarily on retrospective reviews of prescription drug utilization to identify problems. This approach may represent a conflict of interest, as many PBMs charge a per-claim fee, meaning they get paid every time a prescription is filled.
Instead, look for a PBM that offers comprehensive clinical programs designed to be proactive, not reactive. These programs should include a retrospective review, but they should also work to identify potential concerns before a medication is dispensed and prevent potentially dangerous or wasteful prescription utilization instead of addressing it after the fact.
Complete Care Coordination
Since today’s health care system is so complex, a clinically driven PBM model is important in protecting patient and plan sponsor interests and helping to control prescription spending.
Unfortunately, many PBMs rely primarily on rebates and negotiated discounts to control prescription spending. While these negotiations are necessary in today’s marketplace, they focus on only one part of the equation.
As in any other industry, obtaining strong discounts is simply not enough. PBMs must also be smart about where and how money is spent. That’s why a clinical focus is key. Rebates and discounts do little good if the number of prescription claims continues to rise because patient welfare has become secondary to numbers on a spreadsheet.
But how do you put people first in this challenging environment? Select a PBM that empowers its pharmacists to coordinate care between the various members of a patient’s health care team. This team can include primary care physicians, specialists, retail pharmacists and others.
Often, these individuals are spread across multiple practices, and communication between them can be difficult. However, the PBM’s pharmacists have a unique perspective, with insight into the prescriptions written and filled by multiple providers. This puts them in an ideal position to facilitate more effective communications between all parties involved in a patient’s care.
PBMs should understand a patient’s condition, symptoms, medical history and any other medications they use to help ensure each prescription dispensed is medically appropriate. They must know each drug’s manufacturer recommendations and FDA guidelines to understand if it offers the most effective course of treatment for that particular individual. PBMs also must take into account industry best practices, which constantly evolve as new medications and new clinical data become available.
All of this helps to support better health outcomes by reducing the risk of side effects and adverse drug reactions, improving treatment efficacy and supporting a better quality of life. This, in turn, can reduce the need for repeat visits to the doctor and lower the risk of hospitalization. It can also lower the risk of patients taking a medication that offers little or no benefit. All of this helps to lower overall health care costs, improve member satisfaction and support a stronger workforce.
Health care must be a coordinated team effort to achieve positive results for both the patients and the PBM.
Transparent Contracting
The ongoing conversation regarding PBMs and their role in controlling costs often focuses on transparency, and it must continue to do so. In many cases, PBMs practice selective transparency, allowing consumers to see only what’s favorable to the PBM and its revenue streams.
Complicated contracts help to conceal revenue streams in an industry where conflicts of interest have become increasingly common. This creates an environment in which human resource professionals and their companies are not fully informed regarding how their money is being spent and where PBMs may be profiting at consumers’ expense.
Convoluted business practices and hidden revenue streams make accurate PBM comparisons virtually impossible. This means that there is a greater chance companies and their employees could be spending more to get less from their PBM.
The traditional PBM business model masks several revenue streams, including rebates and spread pricing, which pharmacy benefit managers enjoy at the expense of plan sponsors and members. To avoid these and other conflicts, it is vital to select a PBM that offers clear contract terms.
Clinically driven pharmacy benefit management works, and because it works so well, there’s no need for complicated contracts that conceal exactly what the plan sponsor and their members are paying for. Another method of avoiding hidden revenue streams and conflicts of interest is to work with an independent or privately owned PBM not beholden to shareholders and not driven by the needs of larger health care ventures. This allows the PBM to focus closely on providing superior service with less emphasis on profit margins. Typically, working with these PBMs means carving out the pharmacy benefit from the medical benefit, which offers further advantages and transparency.
There are several small to midsize privately held PBMs that are advancing clinical care, transparency and innovation — outperforming the industry giants for customer satisfaction in numerous categories. The PBMI “PBM Customer Satisfaction Report” is an annual survey of pharmacy benefit managers’ customers to show client satisfaction in multiple categories such as delivery of promised savings; meets financial guarantees; effective tools to manage prescription costs; no conflicts of interest issues; and other important factors.
Let the Past Inform Our Future
To effectively manage a benefits program and protect its members as well as its financial viability, it is essential to understand the issues inherent in the pharmacy benefit management system, as well as the steps necessary to create meaningful and lasting change. This entails exploring smarter, more strategic PBM clinical programs designed to promote clinical efficacy and reduce wasteful and inappropriate prescription utilization. It also involves resisting the traditional per-claim fee structure, which can be prone to fraud, waste, and abuse.
Addressing the underlying issues in the PBM industry requires persistence and tenacity. Armed with proper knowledge, employers can begin asking their PBM the tough questions and start demanding more for their plan and for their members.
Workers in low-paid jobs that are not protected under standard labor laws may feel increased pressure to hit certain productivity levels, especially since they are increasingly being monitored by their employers. Not wanting to lose a job they rely on, they may turn to smart drugs. “Electronic means of monitoring employees are likely to be accompanied by an increase in the stresses on workers,” the article noted.