With medical costs eroding an ever-increasing chunk of profits, employers are looking for ways to drive down costs while still providing a level of health care that will keep their employees happy, healthy and productive. These employers may want to apply the old saying “an ounce of prevention is worth a pound of cure” to their health care spending plans.
“Research clearly shows that focusing your health care efforts toward trying to help people once they have already developed chronic conditions or become ill is far more costly than investing in wellness and prevention programs to keep people healthy,” says Sally Stephens, president of Spectrum Health Systems.
Smart Business spoke with Stephens about why employers should focus on keeping their healthy people healthy, and what steps they can take to achieve that goal.
Why is it important for employers to focus on prevention for everyone, not just employees with pre-existing health issues?
Senate Finance Committee Chairman Max Baucus (D-Mont.) says, ‘Today, we spend nearly $800 billion on health problems that are directly linked to lifestyle and poor health habits each year — about one third of our total health care spending. Reforming our system to focus on prevention will drive down costs and produce better health outcomes.’
At the same time, following health care reform, the Trust for America’s Health and the Robert Wood Johnson Foundation released a public opinion survey showing that Americans rank prevention as the most important health care reform priority and overwhelmingly support increasing funding for prevention programs to reduce disease and keep people healthy.
Also, in a recent government study, the results showed that more than half of all Americans do not receive preventive services they need, such as immunizations, screening tests for early detection of disease, and education about healthy habits and injury prevention.
How does keeping employees healthy impact a company and its health care costs?
For many companies, medical costs consume as much as half of corporate profits. To combat these costs, some employers look to methods such as cost sharing, cost shifting, managed care plans, risk rating, and cash-based rebates or incentives. Unfortunately, these methods merely shift costs to employees and do nothing to affect the root cause of high medical costs. Disease prevention and wellness stand out as the most meaningful long-term answers for keeping employees well in the first place.
The research is clear, and results have shown that trying to help people once they have developed chronic conditions or become ill is far more costly than investing in wellness and prevention programs to keep people healthy.
Kevin Volpp, physician and the director of the Center for Health Incentives at the University of Pennsylvania School of Medicine and the Wharton School in Philadelphia, says, ‘The reality is that we have a health care financing system that pays to treat people once they are sick. There’s a growing recognition that health behaviors are a major driver of premature mortality and health care costs. We need to rigorously test approaches that can better align incentives for patients with other interests of the health system, such as employers and insurers, so that resources go to keep people healthy. Wellness incentives are a piece of that and can be used in ways that provide positive feedback to patients.’
How else can focusing on prevention benefit employers?
Research shows that as health risks increase, costs increase, and as health risks decrease, costs decrease. When employers and workers join forces to manage rising health care costs, everyone wins. Employers who support their employees in managing their health also achieve higher productivity, lower absenteeism and reduced claims costs.
In addition, employers who provide comprehensive prevention programs are building a better relationship with their employees. They are not just supporting their people when they become ill; they are instead providing them with resources to stay well and improve the quality of their lives.
What steps can employers take to keep their healthy people healthy?
An investment in maintaining a population’s good health status has a much better payoff than trying to move unhealthy people to a state of health. So what can employers do? Here are several options:
- Implement strategies that appeal to low-risk or healthy employees.
- Offer incentives to employees to move to lower risk.
- Conduct health assessments to track risks over time.
- Tie wellness initiatives to the health plan.
- Build a culture that supports health and well being.
- Educate employees on age- and gender-appropriate preventive screenings and make it easy for them to participate.
What are some programs or resources employers can use to aid prevention efforts?
Provide most routine health checkups and preventive services at no cost in-network to plan members. That is a commitment shared by only 5 percent of major U.S. employers. Those services include commonly accepted preventive medical tests and screenings such as those recommended by the U.S. Preventive Services Task Force, as well as routine physical examinations and wellness checkups. In addition, implement or expand to a comprehensive wellness strategy that offers assessments and onsite screenings, as well as health education.
Because employers are, in most cases, bearing the largest portion of health care costs for their employees, it only makes sense that they partner with their people to manage costs through improved health.
Sally Stephens is president of Spectrum Health Systems. Reach her at (317) 573-7600 or [email protected].
