Employee assistance programs have been around for decades, butE4 Health Inc. has reformulated things by combining the worlds ofEAP and wellness in a one-stop shop headquartered in Irvine,Texas.

Its aim: to help employers cut medical costs by offering ways tohelp their employees make healthier lifestyle choices and managechronic illnesses.

“The health habits of employees is the major concern today ofemployers trying to reign in company medical costs,” said CindySheriff, E4 president and COO, “and we're trying to address thatchallenge by combining EA and wellness.”

It seems to be working.

While there's no shortage of competitors in its world, E4Health, founded in 2011, is snapping up rivals, forming alliancesand attracting venture capital.

In other words, it's taking an aggressive stance in a corner ofthe human resources field that doesn't often see gobs ofinnovation.

“Behavior is driving 75 percent of the health care costs in thiscountry,” noted E4 CEO Bill Mulcahy. “Our vision for the companyfrom the very beginning was to build a business that combined theshort-term behavioral changes of EA with the long-term behavioralchanges of wellness.

According to CrunchBase, a database that tracks financing amongentrepreneurs and start-ups, E4 Health received a $3.5 millioninvestment last year from Mansa Capital, a Boston-based privateequity firm specializing in high-growth health care companies.

It also landed an undisclosed amount from Kinderhook Industries,a private equity firm headquartered in New York City.

The money has allowed E4 Health to make a few acquisitionsincluding:

• St. Louis, Mo.-based People Resources Inc., a provider of EAPs,managed mental health services, and university student coaching andcounseling services.
• Sobel & Raciti Associates, a Providence, R.I., workcounseling practice.
• Wellness Corp., a Shrewsbury, Mass., firm specializing in EAPsand post-secondary education, counseling and coaching.
• Corporate Family Network, a New York City-based provider ofEAPs and work-life services.

At the moment, Sheriff said, E4 Health has 85full-time employees and a network of 17,000 clinicians in the U.S.and Canada.

The company has a physical presence, which E4 Health refers toas “centers of excellence,” in Dallas, Providence, New York City,St. Louis, and Shrewsbury, Mass.

“The overwhelming distribution of health care is delivered by 20top brokers and consultants in the industry,” Mulcahy said inoffering an explanation for the firm's rapid growth. “We know thesepeople, and they're our distribution channel.

“Because of our background in the industry,” Sheriff said, “wealso know the best and brightest clinicians, and that's allowed usto build a solid and extensive EA network.”

“We're trying to move the needle on health care costs,” Mulcahysaid, “and while for the most part clients understand what we'retrying to do, it's still a paradigm shift. We're saying to brokersand companies that you're missing the boat: you've got to manageemployees' lifestyle choices; it's the primary driver of healthcare costs.”

Of course, some employers do get that. But it's still early daysfor this sort of thinking.

“I don't see too many EAPs with a wellness element right now,”said the director of HR at a large East Coast chemical supplycompany, “but more employers are beginning to want both parts, andEAPs are just now beginning to respond.”

The trend was, in fact, part of a presentation two years ago bybenefits giant Aon/Hewitt. Citing a 2002 academic paper, Aon notedthat among the study's 950 respondents, most felt there needed tobe more “collaboration between EAP, work, life, and wellnessprograms.”

The study predicted that over the following 10 years “all threeareas of services would be provided under one umbrelladepartment.”

E4's growth is perhaps the result of early recognition of thattrend and the ability to craft it into a viable business model.

E4, which stands for “evaluate,” “engage,” “empower,” and“effect,” offers clients—among them Jet Blue, Estee Lauder andInterpublic Group—the following programs:

• LifeScope is E4's employee assistance service. As with any EAP,employees whose personal or professional problems are affectingproductivity or jeopardizing their job can be directed tocredentialed coaches, counselors and consultants who can help witha host of problems—big and small, anything from addictions andfinancial or legal issues to bereavement and troubled teens orretirement planning. Employees of client firms have access to help24/7, via telephone or online chat.
• LifeChoice adds the wellness component. Employees take a healthassessment survey that reveals behaviors and chronic medicalconditions that need to be addressed. Employees can create theirown health management goals, track their progress, and createindividualized incentive plans through a suite of cloud-basedwellness software. LifeChoice also provides client employees with ahost of educational seminars as well as counseling for emotionalproblems. Employers can assess their return on investment from thewellness program with E4 Health's ROI calculator and progressreports.
• LifeLync rounds out E4 Health's approach with a set of metricsdedicated to finding and managing treatment for workers withchronic health problems, often those employees responsible for mostof a company's medical costs. The idea is to identify these peopleand then focus limited organizational resources on them to improveand manage both their physical health and the associatedpsychological issues that often increase company medical costs andaffect productivity.

“Our programs build onto each other and work together,” saidSheriff, “but we believe the foundation of developing healthyhabits is employee assistance. So if you buy LifeChoice orLifeLync, you also get LifeScope, the EA component.”

Sounds good, of course, but skeptics will wonder: does it reallywork?

The jury might still be out regarding wellness. But there'slittle doubt that EAPs help employers and their workers. Towit:

A 2004 study published in The Journal of Employee Assistance,“EAP Impact on Work, Relationship, and Health Outcomes,” trackednearly 60,000 federal employees from 1999 to 2002, measuring thefollowing factors: 1) productivity as affected by emotional health;2) productivity as measured by physical health; 3) work and socialrelationships.

In each of the three categories, employees showed improvementsafter using EAP services.

In particular, dramatic gains were made among employees who saidthey had experienced difficulty in doing their job because ofemotional problems. At the end of the study, “only 8 percent ofclients reported this level of difficulty—a 73 percent reduction inthe number of cases with low productivity due to mental healthissues.”

Absenteeism and tardiness also went down significantly. At theconclusion of the research, respondents who used EAP servicesreported being late or absent from work an average of one day inthe previous 30 days, compared with 2.37 days at the start of thestudy, a “62 percent drop in lost time away from work.”

Researchers calculated that among the 60,000 respondents in thestudy 87,140 whole or partial workdays were gained over thethree-year period of inquiry.

It all adds up and trickles down to the bottom line.

For every dollar spent on EAP, notes the U.S. Department ofLabor, there's a savings of $3 to $15.

Illustrations by Matthew Hollister