As the cost of providing health care
coverage continues to rise, many
businesses have had to scale back the benefits that they offer. One way that companies are coping with escalating health care costs is by utilizing wellness plans.
“A wellness plan is a campaign designed
to engage employees in taking preventive
action to improve their health status,”
explains Phil Gordon, area vice president
of Arthur J. Gallagher & Co.
Smart Business spoke with Gordon
about wellness plans and the benefits that
they can provide.
What types of wellness plans are available?
The simplest types of wellness plans are
basic communications. This may include a
regular newsletter or flyer on eating better
or exercising regularly. Along with information, a simple wellness plan may also
include negotiated discounts at health
clubs. An annual health fair where various
stations are set up to educate employees
about taking better care of their health is
also a cornerstone to a simple wellness
plan. This type of wellness plan can be
organized at a very low cost and many of
the elements are already integrated in the
standard offering of most medical carriers.
The employer’s burden is communicating
with the employees and utilizing the
resources already available to them.
The most aggressive wellness plans may
actually mandate participation and follow-up as a condition of participation in the
health plan. Such programs identify
employees with elevated risk and require
that they take certain action, such as a
comprehensive physical with a physician.
Some large employers have set up health
and wellness centers staffed by nurses and
physicians to implement the process.
Of what specific components do wellness
plans consist?
Typically, wellness plans will include
health risk assessments (HRAs), which are
detailed questionnaires designed to establish a baseline risk level for each employee.
The questions cover areas such as height,
weight, alcohol consumption, smoking,
health of parents, cholesterol levels, blood
pressure levels, etc. The results of the HRA
are used to target specific education and coaching to employees with elevated risk.
Sometimes a ‘health coach’ is assigned to
the employee to help answer questions and
hold the employee accountable to changes
in his or her lifestyle.
Typically, financial incentives (usually
around $50) are in place to promote utilization of the HRA and the follow-up programs. Other programs may include use of pedometers to measure baseline physical
activity and set goals for improvement.
What types of savings and/or return on
investment can a company expect by implementing a wellness plan?
The general objective of a wellness plan
is to increase the productivity of the organization and lower health care costs. If these
goals are met to a greater extent than the
cost of implementing the program, then it
will be beneficial to the bottom line of the
employer. Most wellness programs have a
projected ROI associated with them. It is
important to note that not all employers
will be able to generate a positive ROI, so
arguably not all employers should look to
implement a wellness program. If staff
turnover is high and the average age is
young, the odds of achieving ROI are greatly reduced. Employers who have stable,
aging work forces, however, stand a much
greater chance of achieving positive ROI.
How should a company go about implementing a wellness plan?
Companies should speak to an employee
benefit consultant familiar with wellness
plans before taking action. The consultant
will be able to assess the potential ROI by
looking at the size, turnover and demographics of the employer. If available, the
benefit consultant can also review utilization statistics to further refine potential
savings.
How should the benefits of a wellness plan
be communicated to employees?
It will vary widely from organization to
organization. A number of factors must be
considered, such as the education level of
the work force, its geographic distribution
and its access to and familiarity with using
the Internet. When communicating to
employees about wellness, one certainty is
that it must be done through multiple channels on multiple occasions in a simple, understandable way. If a company is committed to wellness, the philosophy should
show itself throughout the organization’s
culture. Managers and supervisors should
set a good example by utilizing the programs and promoting them.
Once in place, how should a wellness program be evaluated?
One obvious measurement is simply participation. The more employees who actively participate in a wellness program,
the more likely it is to achieve positive
results. Other measurements could include
comparing year-over-year aggregated results of HRA campaigns, comparing utilization of sick time and medical services.
Realistically, it may take years for enough
data to be available in order to measure a
statistically valid ROI. In the meantime,
much of the perceived success will lie in
stories such as, ‘Joe found out he had a
blockage in his artery and avoided a sure
stroke.’ These stories will inevitably arise if
the wellness plan is working.
PHIL GORDON is area vice president of Arthur J. Gallagher &
Co. Reach him at (818) 539-1343 or [email protected].