Changing The Health Culture Of Your Workplace
Employers are feeling the pain of high healthcare costs ... and they're doing something about it.
Allision Shirreffs
October 31, 2008
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A
ccording to the U.S. Census Bureau, roughly 60 percent of the population-or 175 million
Americans-are covered by employer-driven health benefits. While these companies care about
employees' health, they're also aware of how much their ill health costs them.
A report by the Employment Policy Foundation indicates that since 2004, health coverage is the most expensive benefit paid by employers. Towers Perrin's 2008 Health Care Cost Survey notes that gross health care expenditures costs a company, on average, $9,144 per employee.
Many companies are attempting to change the health cultures of their workplace. Rather than pay to treat sickness, they're directing resources toward keeping their healthy employees healthy and prompting their not-so-healthy workers to improve their health. And they're launching wellness programs and pushing health initiatives.
Here's why: In spite of the fact that physical activity has proven benefits, more than half of U.S. adults don't get enough physical activity to provide health benefits. According to the Centers for Disease Control (CDC), roughly a third of U.S. men and slightly more than a third of U.S. women are considered obese. Obesity increases the risk for several diseases and health conditions such as hypertension, Type 2 diabetes, coronary heart disease, and stroke. According to the CDC, the estimated cost of obesity in the U.S. in 2000 (the most recent figures) was $117 billion.
Annually, an estimated 438,000 people in the U.S. die prematurely due to smoking or exposure to secondhand smoke, notes the CDC. Another 8.6 million are burdened by serious illnesses caused by smoking. Economically, smoking costs more than $96 billion per year in medical expenditures and another $97 billion from lost productivity (45.2 million people in the U.S. smoke cigarettes.)
Employers not only are feeling the pain of their workers who are obese or smoke or both, they're paying for it. In the U.S., companies paid approximately $650 billion of the total $2 trillion spent on healthcare expenses last year.
In 2007, UPS spent $3.2 billion on health benefits, up from $2.6 billion in 2006. What's telling is that 85 percent of the logistics company's healthcare expenditure was generated by only 15 percent of its covered employee population. Most of that 15 percent is saddled with chronic and complex healthcare conditions.
In the first half of 2006, UPS launched several initiatives aimed at wellness and preventative care. "No one here is going to tell you it's not about money," states Randall Price, UPS' health and productivity manager. "All of this is an investment in our employees, our organization, its sustainability, and in the people who believe enough to invest in it."
At Children's Healthcare of Atlanta, respiratory issues such as asthma are the No. 1 reason children are admitted, but until Children's went "smoke free" in March 2008, employees were able to smoke outside hospital entryways and on Children's property. At meetings, cookies were a staple and oftentimes employees were treated to ice cream and the occasional pizza. It wasn't surprising to find obesity was one of Children's employees' biggest health benefit claims.
To that end, Children's recently kicked off its "Strong4Life at Children's" program, an organization-wide effort to create a healthier workforce to care for metro Atlanta's pediatric population. As part of the program, Children's offers wellness fairs where employees can receive a $75 incentive if they complete a health profile that includes body mass index, body fat percentage, blood pressure and cholesterol screenings. "We incent people because we want the data," explains Linda Matzigkeit, senior vice president of HR. The goal is to get 75 percent of Children's 7,000 employees to complete a health profile.
So-called wellness and preventative programs are relatively new, so there isn't a lot of data about how these programs fare. However, data that is available illustrates such programs are showing dividends.
'A productivity thing'
"Getting people to seek preventive care is certainly less expensive and there is an impact on lowering health care costs, but it's also a productivity thing," explains Scott Blackard, principal at Towers Perrin. "These behavior changes have an impact on absenteeism and productivity."
According to the Towers Perrin study, the No. 1 driver of employee engagement is whether or not senior management is sincerely interested in employees' well being. "If a culture of health is led by senior people in the organization-we want you and your dependents to be healthy because we care about you-there can be a correlation between a culture of health, if done right, and an impact on employee engagement," says Blackard.
"If done right" is key. The study's most significant findings show a stark contrast between high-performing companies and low-performing ones. On average, high-performing companies will see a total cost of $8,532 per active employee, or 16 percent less than the $10,200 total cost its low-performing counterpart pays per active employee.
In an effort to identify and reach employees with health problems (and keep those without them healthy), UPS launched a pair of employee assistance programs in the first half of 2006. Its UPS Healthy Connections-Informed Choices Program provides access to health information, health decision support tools and resources, as well as the personalized support of a health coach. Approximately 300,000 U.S.-based UPS employees and their family members are eligible for the program (worldwide, UPS has 428,000 employees).
In conjunction, UPS created its UPS personal healthcare record, which allows individuals a secure way to track their medical, pharmacy and lab claims data and store and track information such as family history, immunizations, allergies, and any over-the-counter medications. Employees can print summarized reports and give them to their doctor.
The company also built special data repositories to track this information so various health benefits' vendors and health coaches can access and cross-reference employee health information. It also gives the company the ability to measure the effects of its wellness programs. According to Price, in 2007, the money spent by employees on outpatient claims was 21 percent less than the previous year, and that number takes into account the cost of administering the program.
Four years ago, UPS began offering free health assessments to employees. With a small monetary incentive ($50 into the employee's flexible spending account), 60 percent of employees completed the assessment. This year, in an effort to bump up the number of respondents, employees who participate in the assessment get a $100 gift card, as does any employee spouse who completes an assessment.
From the data collected through the health assessments, nurses identify employees with chronic conditions as well as those with a family history of certain diseases and offer outreach to help those employees better understand their conditions.
When the company launched its Free & Clear Quit For Life smoking cessation program, 5,000 employees enrolled. To date, 45 percent haven't had a puff in six months. The program is free to employees, and although UPS pays for it, Price believes it's a great investment. It creates a healthier workforce and, she says, "It does affect productivity. When you're going outside [to smoke], you're away from your desk. The fewer people who do that, the more productive we are."
'Changing the symbols'
At Children's, going-smoke free was part of "changing the symbols," says Matzigkeit. "We're trying to change every symbol that's not a symbol of health." The organization has gone to "100 percent Healthy Catering" at meetings. "The cookies are gone," says Matzigkeit. "We've been an organization and culture that celebrates with food, but there are plenty of ways to celebrate. Instead of pizza, let's bring in a masseuse and give everybody 10-minute neck and shoulder massages."
Each year, Children's spends approximately $20 million on employees' healthcare costs. Stong4Life (and its partner program, YOU4Life, where employees can take weekly classes and work with a fitness trainer and nutritionist) cost Children's $500,000, not an insignificant amount of money for a not-for-profit organization. "It's a long-term payoff," explains Matzigkeit. "It will take three to five years to see significant difference in healthcare costs."
Matzigkeit believes having Children's board of directors and executive team support its wellness initiatives is key. Likewise at UPS. "We have to have top-down ownership of it," notes Price. At a recent health fair at UPS' corporate office, senior leadership "made themselves visible" notes Judy Pirnie Smith, health and production manager and a registered nurse.
Automatic Data Processing, Inc.'s (ADP) Alpharetta offices are home to nearly 3,600 of the nationwide company's 47,000 associates. Among them are the medical doctor and nurses that staff the medical center located at ADP's main campus. The clinic averages about 600 employee visits a month, and since it opened in 2005, more than 90 percent of ADP's Atlanta's employee population has made a clinic visit.
According to Mac Peden, SVP of national accounts, senior management uses the center. Beyond the regular doctor's visit, the clinic offers free health screenings for all employees, free flu shots, operates a periodic health fair, and this October will start a program for hypertension management. "We're going to take a much more proactive role," notes Peden.
Although he doesn't have any numbers on the clinic's return on investment, Peden notes the cost to operate the clinic is less than three percent of the company's total spend for healthcare. "The benefits we get from the clinics is clearly greater than the amount we spend," he adds. The doctor and nurses know many of the staff and when employees do have to go to the doctor, it takes an hour, not a half a day. Peden also believes the clinic helps recruit and retain employees. It's no accident the clinic entrance is in the main building's lobby.
Not a question of size
Companies don't need to be big to make changes in their health culture. With only 105 employees, staffing company Hire Dynamics launched a wellness program earlier this year. "In terms of rising health care costs, there are a lot of things we can't do to control costs," says Sonya Buckley, talent and retention manager. "But you can shape behavior and provide a culture of wellness."
In a campaign called "Know Your Numbers," Hire Dynamics' employees filled out a health risk assessment and received a personal wellness profile that listed areas of concern. Buckley puts together a monthly "Living Well" newsletter and arranges "lunch and learn" sessions featuring various health topics. Hire Dynamics recently held its first health fair and the company also invited a chef to teach employees about healthy cooking. Employees will "Spring Into Spring" with a fitness challenge.
Although Buckley realizes what Hire Dynamics is doing is "baby steps," she recognizes there are relatively inexpensive things companies of any size can do to promote wellness. But before starting any wellness program, Buckley suggests figuring out what employees want. "Ask questions," she says.
Where most companies drop the ball on wellness programs, says Matzigkeit, is "not keeping wellness top of mind," she says. "A lot of companies do disease management, but if it's not top of mind, they'll forget." Programs don't run themselves either, she explains. "Tweak and refresh them," Matzigkeit advises.
And be patient when it comes to seeing a return on investment, advises Price. "All those things we're asking employees to do to stay healthier will cost us more initially but it will make a difference," he says. "You have to be at it every day."
Next year both Children's and UPS plan to add mental health and stress to their list of wellness initiatives. With good reason. According to a study published by the Journal of the American Medical Association, depression is the cause of 80 percent of mental disability claims in the U.S. and costs businesses $44 billion annually, $24 billion of that in lost productivity and workdays.
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