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Sunday, 04 September 2016 02:55

Wellness offers employers one way to curb ‘runaway train’ of health care costs

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Employers who either want no part of wellness programs or have yet to jump onto the bandwagon remain among the solid majority in West Michigan.

One gauge of that is the 59 out of 95 employers (68 percent) responding to The Employers’ Association’s annual cost survey that indicated they do not offer wellness incentives, presumably because they don’t have a program.

There are many reasons employers would rather not go down the wellness road: They lack the administrative structure to manage a program, management remains unsure about the return on investment and the ability for wellness initiatives to lower health care costs, or they’re small and don’t believe they’ll see a benefit because they’re part of a shared risk pool.

But that reasoning also presents an opportunity for the wellness movement, said David Cuneo, president of Health Plan Advocate LLC in Grand Rapids, a third-party wellness provider. Wellness providers need to do a better job of showing employers the benefits of a program.

“It isn’t like we have all of the answers yet. Wellness is still relatively in its infancy,” Cuneo said. “Taking a look at cause and effect and saying, ‘If I do this, am I really going to see a reduction?’ It’s still, to some degree, kind of a leap of faith. And it’s hard to quantify because there are so many things that go into the health care soup.”

The biggest question around wellness remains how to fashion a program that gets employees at a company more involved in maintaining their health or, for those who have a medical condition, spurring them to take care of themselves by eating better and getting more physically activity.

REDUCING HEALTH RISKS

At companies where Health Plan Advocate provides wellness and does biometric screenings, about 60 percent of the people will address a problem and follow up with their doctor. The tests check  employees’ cholesterol and blood glucose levels as well as their blood pressure.

“Knowledge is powerful. The problem is that’s kind of the old way of doing quality control. We fix things after they break, rather than trying to prevent that,” said Cuneo, noting the obesity rate in America in nearing 36 percent. “We have to get to the place where we figure out what are the best ways to do that preventative engagement with our employees.

“It’s just not an easy answer, but we can’t afford not to address it and try to figure out ways of stemming this runaway train.”

For example, by working with employees who are pre-diabetic, “you can stop them from moving on to the next stage where it’s really going to cost an employer a lot of money,” Cuneo said.

A study conducted by the University of Michigan offers an idea of how much money is at stake. The study stated that employees with one or more of 10 so-called modifiable health risks — the things that wellness programs are designed to address — ring up significantly more health care costs than their healthy counterparts.

Involving 223,500 workers in seven industries, the study concluded that a healthy employee on average incurs about $3,000 a year in health care costs. By contrast, an employee with one medical condition has $10,000 in costs annually.

The study “gives an employer a sense of the magnitude that might be saved if modifiable health risks could be eliminated,” according to the study.

SMALL VS. LARGE

Research over the years has differed on the effectiveness of wellness to control costs. Most recently, Grand Rapids-based Priority Health in May offered data on how employees enrolled in one of its wellness-based health plans cost 12 percent less to insure over a four-year period than those who had standard health coverage.

While executives can debate the merits of wellness programs, surveys show a growing number of employers believe in it — and the simple fact is that unhealthy employees cost more to insure than healthy employees.

Large employers, particularly those that have self-funded health plans, tend to have a greater understanding of how employee lifestyles and behaviors affect their health and the costs of insurance, Cuneo said. He estimates that 60 percent to 80 percent of large employers have a wellness program and offer employees incentives to take better care of their health.

Wellness among small businesses is about half that rate. Their size and subsequent lack of resources to administer a wellness program are part of the reason. Another is that if they’re in a risk pool with thousands of other small businesses, they will generally not get the benefit of a successful wellness program.

Some business owners take the view that they don’t want to tell their employees how to live. And others, overwhelmed with the cost increases and complexity of health care, are just too frustrated to put up a fight any longer, much less up the ante with a wellness program.

“Some of them just feel helpless: ‘It’s beyond me. I’m a guy that creates widgets and I don’t understand human motivation or health care costs,’” Cuneo said. “People just throw their hands up. They just feel that it’s so enormous that there’s nothing that their small company can do, and that’s where the big (insurance) carriers have to take the lead in this in helping everybody manage these health care costs.” 

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