When Wellness Works: Partnering With Hospitals Leads to a Healthier Bottom Line for Employers

Employee Benefit Plan Review 03.14.2012

By Becky Barney-Villano

In a sluggish economy where consumer spending has reached new all-time lows, employers are seeking innovative ways to cut costs in order to boost their sagging bottom lines. Most often, those efforts focus on employees. Layoffs are one option that many employers have taken, but some companies are embracing a different—and less drastic—approach. They are focusing on the expense of health care, one employee at a time. And who could be better than a hospital—with its battery of health care specialists and a track record of fixing what’s broken—to help manage a wellness program? Can it really pay off?

The Stakes Are High…
According to the Gallup-Healthways Well-Being Index which studied the period of January 2, 2011 to October 2, 2011, full-time workers who are overweight or obese and have other chronic health conditions miss an estimated 450 million additional days of work each year compared with healthy workers. On a per-employee basis, that works out to a mean average of .34 unhealthy days a month for an employee of normal weight with no chronic conditions, versus 3.51 unhealthy days per month for an overweight employee with three or more chronic conditions. That differential costs American businesses more than $153 billion in lost productivity annually.

Like most businesses, Mainstream Living in Des Moines, Iowa was caught up in the upward spiral of skyrocketing health care costs. The company was hit with a 20 percent increase in its annual healthcare insurance premiums in 2006. Although the company had been trying to improve the health of its 500 employees via emails about free events and healthy living tips, human resources leadership decided it was time to take a more proactive wellness approach. “We looked into the cost of contracting with wellness companies to help us,” says Lynda McCalley, Mainstream’s benefits coordinator and head of payroll. “But the companies we contacted to provide health risk assessments wanted to charge about $225 per employee for each assessment, whether or not the employee actually participated in the screening. That was more than what we wanted to spend.”

…And So Is The Return
Mainstream learned about a wellness program offered by a local hospital, Mercy Medical Center. Mercy had been offering wellness services through community outreach for years but only recently ramped up the health programs it offers directly to employers. Mercy had contracted with Nashville-based Aegis Health Group, which helps hospitals reach out to employers in their communities. Mercy offered to supply health risk assessments to Mainstream employees for only $32 per screening for each participant. Mainstream agreed. For that cost, Mercy provided a turnkey service including testing of each participant for certain metabolic conditions such as high glucose or cholesterol, and for risk factors such as smoking or being overweight. It then provided each participant with their results and recommended health interventions. When the results for all the participants were available, they were compiled into a composite report that provided Mainstream with a complete snapshot of its workforce health profile. It showed what risks and health conditions affected its workforce as a group. Based on that information, Mercy created a program of healthy lifestyle classes to reduce its employees’ health risks. To boost participation, Mainstream offered employees a reduction of their annual health insurance premiums of up to $600 per year. Employees whose health risk assessments indicated that they had three or more high risk factors were required to attend the classes; 50 employees fell into that category last year.

The program, now in its fourth year, has paid off. Mainstream’s insurance premium increases have dropped from 10 percent in 2007 to 4 percent in 2011 – and just 1.4 percent in 2012. McCalley attributes this dramatic improvement to their workforce health program that directly and effectively addresses individual employee’s health and wellness needs. She notes that Mainstream employees have had fewer hospitalizations and office visits, a return on investment Mainstream did not expect so quickly. “If Mercy had not offered its program, we would not be where we are today with wellness,” she says.

In a new twist on the old adage, “Physician, heal thyself,” Baptist Health System in Birmingham, AL, decided to try its own medicine first before rolling it out to local employers. The system had been experiencing healthcare costs that were rising by 8 to 10 percent each year. The primary causes were increased utilization, high dollar claims and treatment for chronic conditions. In an effort to reduce healthcare costs, this self-insured employer agreed to pilot a wellness initiative for its 4,000+ employees using Aegis’ program. The results have been impressive.Using confidential health risk assessments completed by its employees, Baptist discovered through an aggregated report that nearly 15 percent of its workers were using some form of tobacco, and nearly 70 percent of employees had high blood pressure. Almost half of its workforce had high HDL cholesterol levels. The assessments proved very effective in building employee trust because they ensured confidentiality, encouraged health awareness via the report provided to each employee, and offered a two-year analysis of results for each participant.

Since it rolled out, participation among Baptist employees in its wellness initiatives has snowballed, increasing from 74 percent in 2008 to 89 percent in 2010. The health system has realized a $600,000 reduction in claims with a direct correlation to wellness and $1 million reduction in workers’ compensation reserves. It has made impressive strides in employee health metrics: Tobacco use among its workers has dropped from 14.7 to 12.3 percent, and desirable cholesterol levels rose from 68.1 percent to 71.2 percent. Hypertension decreased 1.4 percent. And overall, the program led more employees to select a primary care physician, increasing the number of employees who obtained preventive services such as physicals, pap smears, mammograms and prostate exams.
The program made a believer out of Baptist Health, who is now helping other employers in the Birmingham market improve the health of their workforces. Alan Bradford, Baptist’s chief human resource officer, says the value proposition is compelling. “We know through Baptist’s experience that wellness programs can make a difference. Our own results demonstrate that. Wellness programs such as these succeed because everyone wins. Employers win because, by working with the local hospital, they have health experts readily available to tailor programming to each employer’s needs. Employees win by learning more about their health risks and gaining the knowledge and tools they need to lead a healthier lifestyle. For Baptist, we’ve been able to establish closer ties with employers and position ourselves as part of the solution, rather than part of the problem, of rising healthcare costs. In today’s healthcare world, that’s a great place to be.”

Creating A Culture of Wellness
Employers who operate in culturally diverse markets may find that their workers have never been educated on – or accustomed to even thinking about – a healthy lifestyle. That was certainly the case at St. Francis Winery in Sonoma, CA. Christopher Silva, CEO of St. Francis, didn’t make the connection between his workers’ dearth of knowledge on staying healthy and his company’s rising healthcare costs until 2010. That was when he learned about the workforce health initiative being offered by a local health system in his county.

“As chairman of the board of trustees at the local St. Joseph Health System hospital, I had heard about the success of the program at other local worksites,” he recounts. “I became very interested in applying it to our vineyard workers. We felt St. Joseph has long been the health and wellness pillar of our community and a trusted source of healthcare information. We knew any program we introduced with St. Joseph would have instant credibility in the eyes of our employees.”

St. Francis’ workforce health initiative kicked off with a program of screenings and health risk assessments of its employees. Nearly 100 percent of the winery’s employees participated – and the results were startling. Despite offering one of the best insurance packages in the local industry – including medical, dental, vision, life and a 401(k) – St. Francis found that 42.7 percent of its employees had never had a physical exam, compared to a national average of around 10 percent. More than half of St. Francis employees had no primary care physician, compared to the national average of 23.5 percent. Nearly half had high blood pressure, and 8 percent were severely obese.

Based on the aggregated results from its employee assessments, St. Francis now sponsors an ongoing program of health education workshops and activities that are offered right in the vineyards to impart information—and motivation – on choosing a healthier lifestyle. The content is delivered in both English and Spanish via trained health professionals provided by St. Joseph. The winery also sponsors regularwalks in the vineyards, provides healthy snack choices, offers smoking cessation classes, free immunizations and doctors on site. The goal is to create a culture focused on wellness among St. Francis’ employees.

For Silva, the effort means more than just a return on investment. Projected cost savings for the first year of the program are $40,000, but he feels the benefits go far beyond mere dollars. “I see workforce wellness as an issue of empowerment, especially for those without previous access to such information,” notes Silva. “Driving profitability depends on a healthy workforce and for us, that depends on changing our culture. Any time you empower employees, it comes back tenfold. Once you open a mind, you open it forever.”

His employees are responding in kind. For the first time ever, St. Francis was named one of “The Best Places to Work in the North Bay,” according to theNorth Bay Business Journal. The votes are submitted anonymously by employees and compiled by the magazine each year. St. Francis was the only winery to make the list. Additionally, Silva was recently named “Healthy Business Leader for Northern California” by the Northern California Center for Well Being, in recognition of the success of the winery’s workforce wellness programs.

The Langham Huntington Hotel in Pasadena, Calif., has had a relationship with Huntington Memorial Hospital for four years, but only recently began offering regular wellness programs onsite. For Christine Wilsek, director of human resources, the hospital-hotel collaboration is an important part of The Langham’s renewed efforts to raise awareness about wellness among employees. The hotel offers a yearly health fair, personal health assessments, and regular body fat and body mass index screenings coordinated by the hospital. “I’ve heard employees say, ‘Oh my gosh, I didn’t realize how out of shape I am!’ Then they have the opportunity to participate in programs that will help address that,” notes Wilsek. “We know from anecdotal comments that managing stress and lifestyle risk factors are now on their radar scope. And my feeling is, when you give employees the opportunity and the tools to improve their health, they feel better about themselves.” The hotel also notifies employees of upcoming health education opportunities offered on the campus of Huntington Hospital. Because the hospital is only minutes away from The Langham Hotel, employees have ready access to those classes and screenings as well. Although The Langham has not asked for a health profile on its workforce, they don’t need one to know their wellness initiative is working. This year, the hotel has cut its workers compensation claims in half. Wilsek credits that impressive accomplishment to sitting down with each employee and stressing how to manage their injuries – or the risk of injuries – in the context of each employee’s unique job and helping them focus on a healthy and safe lifestyle.

Finding a Partner in Wellness
Because of declining reimbursement and a surge in their own costs, many hospitals are highly motivated to establish a direct relationship with local employers. The best place to start is to call the most reputable health care facility in your area and ask to speak with the business development department. Many hospitals already have established programs and will be more than willing to extend those services to a local business. These can be especially good deals for small- to medium-size employers who can’t afford to fund a comprehensive wellness program, but still want some periodic services offered on-site. Here are four key considerations to ponder before making the call.

1. Decide up front what you want your goals to be. Are you looking for a drop in your insurance premium increases year over year, or do you want your employees to learn new ways to prevent back injuries via instruction on body mechanics? Perhaps you want to see a reduction in sick days or a longer term drop in overall healthcare utilization. It’s fine to have short-term and long-term goals – in fact, that’s the best way to track the success of your wellness program. Examples of short-term goals might be a drop in the percentage of employees who smoke or who have high cholesterol; longer-term goals might be a decline in overall sick days. Being specific about what you want to accomplish will help your chosen partner in wellness to achieve the most important goals for your workforce.

2. Be prepared to describe the overarching characteristics of your employee workforce. A company that employs manual laborers such as St. Francis may have very different needs than an office full of white-collar workers or a business that operates around the clock like Baptist Health or The Langham. Hospitals vary in their scope of services, so a facility that doesn’t offer obstetrics or pediatrics might not be the best match for an office that employs large numbers of women of child-bearing age. Some facilities do not offer rehabilitation, so providing ergonomic counseling or body mechanics to a skilled labor workforce may not be possible.

3. Consider how you want to fund the program. Since most hospitals offer their services at a reasonable price, many employers absorb the cost. However, you can charge employees, says Renee Hynes, chair of Mainstream’s wellness committee. Mainstream charged participants $10 for the health screening its first year to defray the costs. It now offers it free to all full time employees on its health insurance plan. Of the 250 eligible employees, about 85 percent now participate. “You receive a lot of resistance with these programs at first. It’s only now that employees are grateful for the program,” says Hynes.

4. Decide how you want to track and use the results of the program. If your goal is to see a return on investment, be sure the hospital can provide you with enough baseline data on your workforce’s health, with benchmarks of success as the program progresses. Ask if the hospital conducts personal health assessments at the beginning of the program, and what kind of data it can return to you about your workforce. Other benchmarks of success can range from numbers of participants at classes or screenings, to actual declines in risk factors or improvements in lost work days.

When it comes to cutting costs and enhancing overall profitability, employers may need to invest a dime to save a dime. The good news is this: sometimes the best place to bank on your employees may very well be found locally, right around the corner, at your neighborhood hospital.

Becky Barney-Villano has specialized in writing on health care related issues for more than two decades. Her articles have appeared in a variety of publications, including Spectrum, MPR Exchange, and Profiles in Healthcare Marketing.

Gallup-Healthways Well-Being Index, January 2, 2011 – October 2, 2011

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