Fed up. That's the sentiment sweeping corporate America when it comes to the nation's health care crisis. Faced with the perpetual increases in health insurance, corporations tried such strategies as cost shifting, higher co-payments, scaled back coverage and other changes, producing limited results for both the employer and employee.
However, as workers have begun to share more of the cost of health insurance, an awareness has evolved that might offer benefit brokers and consultants a significant opportunity.
Employers and the employees alike have begun to realize that cutting the cost of health insurance will only come from lower utilization of those benefits. In other words, get healthy or pay a hefty price. For many the choice was health -- translated into wellness.
A Research America survey shows that 82 percent of Americans are now taking the initiative to be healthy. Employees have learned it is financially, physically and emotionally beneficial to maintain a healthy lifestyle.
Another poll shows that in 2005, millions of Americans searched online wellness sites to jump-start their exercise routine. Employers took notice.
In 2005, the Bureau of Labor statistics reported that almost one-fourth of all employees in the U.S. private industry sector had some form of wellness program available to them.
The State of Colorado has initiated a preventive program called "Colorado on the Move" to tackle its obesity problem. Tennessee adopted a statewide wellness program to handle health-related issues such as stress, depression, obesity, smoking and many others. The University of Southern California added "Work and Life Skills" courses to its core curriculum.
Benefits for brokers
Is wellness paying off?
Yes. Many corporations already are showing substantial savings. In 2005, Cigna saved $900 per employee due to wellness activities; Motorola reports $6.5 million in annual savings on medical expenses for lifestyle-related diagnoses While the push for wellness programs is certainly gaining momentum, it is still in its infancy.
That's where the opportunity for brokers and consultants comes in. An employee who is aware of his own role can leverage the employer to take the next wellness step. There is opportunity to market wellness programs and related products to that portion of the corporate world that is still "on the fence," or have developed small home-grown activities to address wellness. The broker can use this information to persuade the skeptical client, the employer who can not finance additional benefits or the CFOs who are continually pressured to cut costs.
Labor Research Inc. reports that 80 percent of the nation's CFOs are concerned about the effect of rising health care costs on profits and 32 percent already are planning to shift more costs onto their employees. The broker/consultant can demonstrate the potential pitfalls in creating more employee anger and resentment. The 2003 grocery store strike and lockout involving Vons, Albertsons and Ralph's ignited in large part to the stores' plan to decrease their contribution to the employee health insurance premiums. The costly result? Nearly six months of strikes and billions of dollars lost in wages, hiring and legal action.
Read the label
The key to this wellness opportunity is perhaps in the data. The broker/consultant who uses data to highlight the financial pay off of a wellness program will be more successful at implementing a wellness plan and adding new goals over time and as the budget allows.
Nevertheless, a broker/consultant who has a commitment to try new approaches and products will have an edge.
Specific steps that could help companies evaluate the alternatives to added cost sharing include:
- Analysis of health care utilization data from their insurance carrier. While this data is usually closely held by carriers, pressure can be exerted to gain access to this information: from health care to anonymous statistics and demographic data. Disease management or other conditions are dependent on such information. The broker/consultant can point out the effectiveness of beginning a wellness program with a simple health risk appraisal, HRA. Many HRAs are free online and can be used to develop a baseline of the population's health status. The information can be used to identify current health risks to be addressed within a defined population. This tool is an important first step to measure risk reduction and improved health status.
- A next step from individual data can make group profiles-slightly more costly but a way to predict the directions of wellness activities to come. This approach maximizes the wellness efforts by targeting a goal instead of the "scatter shot" approach of other wellness offerings -- hoping something is better than nothing and will produce "some" results.
Instead, listen to their concerns and ideas to tailor future services to their needs. Remember, customization is key. The broker/consultant can successfully sell to his or her client by knowing specifics about the client, just as a tailor would know his client's measurements to design a suit that fits.
Dr. Ann Clark, CEO of ACI Specialty Benefits, advises the broker/consultant to slowly ease the idea of wellness programs to their client by first introducing components, then, gather success data and gradually increase services.
"Even if it's free or do-it yourself programs," Clark advised. "The goal is to cultivate these success experiences to pave the way for fuller services."
Some examples of low cost components include sponsorship of charity walks, health fairs, and supported quitting programs -- whether smoking or eating -- it's all about changing behavior.
When it comes to healthier choices, the cause and effect for the benefits industry is self evident. Employers who engage in effective programs will see a lower cost to providing benefits, lower absentee rates and an increase in productivity. Healthy employees will have a positive impact on office morale and team building.
The broker/consultant becomes more valuable over time for their expertise on alternative packages and the substantial savings they have produced.
As health care costs and insurance premiums continue to spiral out of sight, the wisdom of using wellness programs to control health care costs may prove to be the most prudent investment an employer can make.
