In my last post, we talked about the 3 most utilized wellness strategies that employers use, which include:
- Be Healthy Or Else (Outcomes Based)
- Jump Through The Hoops (Participation Based)
- Have Some Fun (Culture of Wellness)
In this post, I want to concentrate on the Be Healthy or Else strategy. Outcomes based strategies are often referred to as “stick” strategies. The idea is that employees must meet minimum health risk standards for the most common biometrics tested. In most cases, employers do biometric testing on the following: BMI, blood pressure, total cholesterol, HDL cholesterol (the good kind), glucose, waist cirumference, and sometimes LDL cholesterol (the bad kind) and cotinine (an indicator of nicotine use). The employees are required to the have their values within the normal or moderate range in order to qualify for a discount on their insurance benefit, or to avoid a surcharge on their premium. For example, let’s say that Joe is a single, 32-year old smoker. He shows up at the biometric screening event offered at his workplace. Joe’s employer is offering a 20% discount on health insurance premiums if he can meet the normal/borderline values for 3 biometric values: BMI, blood pressure and cotinine. Joe’s employer chose those 3 risk factors, because they are trending high and costs are escalating each year as a result. It turns out that Joe has tried to quit smoking unsuccessfully at least 5 times. In order to be eligible to still receive the 20% discount on his insurance premium, he must prove to his employer that he is attempting to quit smoking. He enrolls in a tobacco cessation program, and he demonstrates that he is trying to change his ways by talking to a coach a specified number of times, or by completing a program. He must either provide proof of program participation or participate in his company’s tobacco cessation program, which will provide reporting to his employer that he satisfied the participation requirements to still receive the premium discount. Some employers pick only one biometric risk factor, such as tobacco, while other employers might pick 3-4 risk factors.
There are pros and cons to implementing an outcomes strategy. The pros are that you drive home the point to employees that health status matters, and you hit employees where it hurts most – in the pocketbook. The other pro is that there is no reliance on self-reporting. The reporting is based on data points gathered by a vendor. Seems solid, right? Let’s take a look at the cons. Administration, administration, administration. Did I mention administration? This is where things get dicey. In order to know which employee gets the discount, and which one doesn’t get the discount, you must have timely, accurate reports with the correct data. The trouble is, each party involved (vendor, employer, payroll provider, carrier, broker) has a different idea of “timely”, and a different idea of “correct data.” And the more vendors at the party, the more difficult it is to reach an agreement on the necessary reporting and the higher chance of data errors. The other con of this method is that, as heavy handed as it is, it doesn’t always work! In fact, it rarely turns the ship around to lower medical claims costs as expected. I have a theory on this one. Employees go to work to make a living. Oh sure, there are a few out there who find great satisfaction in a job well done without compensation, but most people need to pay the bills and feed their family. In the nature of being efficient, they want to get in and get the work done and move on. Benefits are part of the entire work-for-pay structure, so saving money on premiums is essentially maximizing your paycheck. However, the health literacy of American workers is notoriously low. Health literacy translates to understanding benefits, knowing how to navigate the health insurance and provider network, etc. What this all means is that you must choose your “communication battles” wisely with employees. They can only handle so much communication material beyond the absolute necessary. Let’s say employees can handle about 4 communication pushes a year. I’m talking about big pushes that require them to do something or take action beyond the normal expectation. When you want to move to outcomes, you have to walk employees through multiple steps to get to the premium discount. They must: 1) Get their biometrics 2) Figure out how to still get the discount if they didn’t pass 3) Possibly talk to a coach or enroll in a lifestyle management program, and 4) Verify that HR has everything right so they don’t leave any money on the table. There goes your 3-4 of 4 big communication pushes for the year. Now you are left with possibly 1 communication topic to push for the entire remainder of the year. What this tells you is that you must choose wisely.
Just like each meal matters, each workout matters, and each extra bite of cheesecake matters, each decision made in the wellness strategy process matters, too. If you choose this route, you must have a qualified wellness consultant to guide you through best practices, PPACA legislation, and vendors to ensure you land on the most efficient method to manage the “Be Healthy or Else Approach.” Doing so is critical to saving time, money, and lawsuits.
Next up, I will discuss the pros and cons of a “Jump Through The Hoops” wellness strategy. I will wrap up the series with a final post on the details and success rates for each approach.
Choose wisely my friends!