D&E in the News
04-29-07 - Wellness programs cut costs, backers say
The Patriot-News
David Wenner
But the questions remain about the impact and value of wellness programs offered by employers. Some companies wonder if it's possible to spur workers to significantly change health-related habits, and if it's worth the expense.
The financial benefit to employers of programs to get employees to lose weight, quit smoking or live healthier lives is not immediately clear. There's still a shortage of evidence to prove the case one way or the other.
By D&E officials say they're convinced a wellness program is already paying off for employees and the company. The Ephrata-based telecommunications company started its program at the beginning of 2006. D&E had been looking for a way to hold down healthier insurance premiums, which had risen 12% in 2005 and 20% in 2004, said Judy Naylor, vice president of human resources.
Highmark Blue Shield recommended its wellness program, Lifestyle Returns. The insurer offered D&E a 2% premium reduction this year if 90% of employees participated in the first two steps of lifestyle Returns, Naylor said. Employees had to pledge to become more health conscious and complete and online health risk assessment.
D&E qualified for the premium reduction, which amounted to about $100,000. It divided the money among participating employees, giving each a $200 reward.
D&E employs about 560 people although some don't participate in the health plan. In 2006 it spent about $5million for health benefits. That doesn't include the amount spent by employees who pay between 5 and 28% of their health care expenses, depending on which coverage option they choose. The company began promoting the wellness program at the beginning of 2006.
"I will be the first to admit it was not easy. There was reluctance," said Donna Schreck the employee benefits administrator.
Participation reached 65% after about six months, and then stalled.
CEO James Morozzi began visiting each work site and making personal appeals. In the end, 96% of employees completed the health risk assessment, which asks about their health-related habits.
Based on their assessments, employees received private feedback on their health risks and how to address them. The company receives feedback on common health risks within its work force and suggestions for addressing them.
Schreck said some employees were reluctant to do the assessments out of fear the information wouldn't b kept confidential. She believes that reaction was often a "crutch" to avoid confronting realities such as the fact that the employee was over weight or smoked and needed to change.
One goald of the wellness program is for employees to get an annual physical exam. To encourage people to get an exam, the company adjusted the benefits plan so the exams are free. As an added incentive, they gave employees a day off with pay on the day of their exam.
But financial incentives play only a small part. The goal is to create a "wellness culture," where the role of the employee health plan is to help people be healthy, rather than jut pay for medical care when they are sick.
One result of the assessments and physical exams is that many employees learned of serious medical conditions that could have become much worse if left untreated. Some have lost weight or quit smoking.
"Those stories help people who might have been sitting on the fence, ignoring the reality of their health," Naylor said.
Jeff Owen, 47, is one of those stories. During the early part of 2006, he lowered his weight from 240 pounds to 190 and had kept the weight off. The information technology consultant said he knew he was overweight and planned to address it eventually.
The opportunity to obtain online information about nutrition and weight loss, and the efforts of a new wellness committee at D&E motivated him to act. "I guess I was sort of ready to make a move, but I didn't know how to start," he said. "Just having [a program] available is something that wasn't there before."
In 2006, D&E offered all invectives and no penalties. Now, employees who don't complete a health risk assessment must pay an additional $500 toward their health care expenses.
A big question surrounding wellness programs is how to get people to participate, said Kevin Krause, CEO of AIA Benefits Resource group. Some studies suggest only 15% to 20% will take part, he said. AS a result, companies are experimenting with incentives and penalties.
Still evidence suggests companies see returns of $3 to $5 for every dollar spent on wellness, Krause said.
AIA Benefits Resource Group pushes the idea that rather than using financial incentives, the most effective approach involves having a wellness coach work with individual employees. AIA works with a vendor that provides those services.
Dr. Robert Muscalus, chief medical officer for Highmark, said the insurer doesn't promise that companies will save money. Rather, it assures that a successful wellness program can have a positive impact on their health-benefit costs.
It can take two to five years before the impact becomes clear. Costs might increase at first if, for example, a large number of employees decide to get physical exams and some discover illnesses, Muscalus said.
But the rationale is that addressing health problems early costs less than treating them in later stages.
Muscalus said it's not easy to implement a successful wellness program. One of the first steps is to assure employees that the program has strong support at all levels of the company. "A poster on a wall does not a wellness program make," he said.