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Results-Driven Worksite Wellness

HRA as MVP Part 4 – Game plan for dealing with HRA vendors

Friday, February 13th, 2015

I hope you are starting to raise your expectations on what you can achieve with your HRA. Inevitably, making changes often means working with your vendor (or getting a new one).

Now let’s think about pens. If you’re like me, you have a drawer somewhere with a bunch of old pens—many of them I got for free at some long forgotten conference or event. There are also many from vendors. Now I don’t want to malign vendor tchotchkes, but let’s be honest, free pens from vendors aren’t usually going to be the best pens—the ones that you look forward to writing notes with in the important meeting. Free isn’t usually synonymous with “the best”.

There seems to be a growing trend of the “gift with purchase” HRA. You get the HRA with the purchase of other services, or by working with a specific health plan, etc. While “free” is always pretty tempting, there are many times when a free HRA is no bargain, especially if it’s poorly designed and can only realize poor utilization. Often, free HRAs don’t have many of the features I described in past posts that drive a WOW. Especially features that provide instant value to your employees. HRAs aren’t all created equal.

Give your HRA check-up from the neck-up

Before you go through the headache of changing vendors, you need to find out if your current HRA vendor can change an improve your HRA. The best vendors will be willing to work with you—from salespeople to account management and technical staff. They should want the same things you do: an HRA that drives results by engaging employees in healthy lifestyle choices.

To give your current HRA vendor a chance to get on board, here’s what I would do if I were you:

Step #1 – Collect some employee feedback on your current HRA. Ask employees right after they complete the HRA and have access to their personal report, the following 4 questions:

Q#1: How would you rate your experience with our current HRA on a 1 – 7 scale with “7” being “excellent” and “1” representing “poor.” (Average their scores)
Q#2: Does our current HRA provide you with new insights about your health and wellness each time you complete it? (Yes or No) or (Always, Often, Seldom, Never)
Q#3: Has the HRA helped you change a health behavior? (Yes or No) or (Always, Often, Seldom, Never)
Q#4: Would you recommend that your friends complete this HRA? (Yes or No)

Step #2 – Sit down with your HRA vendor and share your findings. Summarize the answers to the four questions with your vendor. Lay out your findings and describe how you got them. Ask if other clients have done anything like this and what did they find. Ask if this is what they expect employees to be experiencing when they complete their HRA. Do they want to produce a “wow” experience for users?

Step #3 – If the survey shows poor results, tell them this situation is not acceptable –you need to have an HRA that does better. If your numbers are as low as I think they will be then be candid with them and tell them that you are going to have to make a change unless they can improve the HRA experience for your employees in a significant way.

Step #4 – Set a date for your vendor to give you their plan for improving the HRA. Make sure you give them enough, but not too much time, to come up with a remedial plan for addressing the needed improvements. I have found that it is necessary for the vendor to actually believe that you will really dump them if they don’t fix the problem. Make sure you give yourself enough time to review the plan in depth.

Step #5 – Determine if their plan for improvements is acceptable. Consider how soon the vendor will be able to make the necessary improvements as well as if the proposed changes will fully address the current defects. Will you have to wait one, two or three HRA cycles before the improvements come on line? Will the improvements produce a “wow” HRA experience?

Step #6 – Keep your current vendor or get a new one! Based on steps #1 -#5 decide to either keep your current vendor and work with them or go get a new one. Make sure you are actually accomplishing the improvements that will make the HRA a “wow” experience for your employees and spouses.

Step #7 – Get the same kind of employee feedback on the new HRA. Use the same survey questions to evaluate the new HRA among a small pilot group. Compare the results with the previous 4 question survey results. Determine if the new HRA is performing at an acceptable level.

Don’t forget that the HRA should be one of your wellness program’s most valuable players and its full potential takes consistent effort to realize!Next week we’ll look at how HRAs connect to the “A” function of “AMSO”- a powerful framework for making sure your wellness program is producing results!

Don’t forget, strategies for effective use of HRAs are one of the key skills we teach in our Level 1 WellCert worksite wellness certification program and we have a new set of “Virtual” trainings coming!

HRA as MVP Part 3 – How to get more people completing an HRA

Friday, February 6th, 2015

I have been involved with organizations where less than 10% of employees completed an HRA and others where as high as almost 100%. If you believe that an HRA helps people change for the better then we definitely want to be over on the high end of participation.

Maybe we should get Congress to pass a law that makes an HRA part of our tax return? On second thought, the association may not be to our advantage.

In all seriousness, we need to get as many people as possible completing an HRA each year. It is definitely harder for all of us to ignore some of those common health behaviors if we are faced with them as part of a regular process.

As wellness people we definitely want as many people as possible filling out an HRA each year – particularly if we can make it a “wow“ experience for them! This means you have to have a well-designed “campaign approach” to completion of the HRA each year- often taking particular advantage of open enrollment periods and benefit linkages.

Here’s some additional strategies you can use to get those HRA completion rates as high as possible.

Strategy #1 – message your population frequently about the importance of the HRA as a tool for health improvement. The basic messages should be that the HRA is a useful and important tool for health improvement and that it is important to your organization. Communicate the importance of the HRA!

Strategy #2 – publically plot out the completion rates during the HRA completion period. This strategy uses a “United Way” like approach with the thermometer graphic. Feed the completion rates back to the entire work force with a stated goal such as 90%. Visually challenge the population to complete their HRA!

Strategy #3 – link completion of the HRA to a health management process including preventive screening. If the HRA is completed as part of a health assessment and the data is brought together to strengthen its utility to the individual you will frequently get higher completion rates. This can also be linked to a graphic showing the status. Position the HRA as part of a more comprehensive testing process!

Strategy #4 – require completion of the HRA in order to participate in a significant premium reduction incentive. For example, waive a $100 a month health plan contribution for meeting several wellness criteria and have the completion of the HRA as a requirement for participating in the premium reduction. Use the HRA as a “ticket” into a premium reduction based wellness incentive!

Strategy #5 – require completion of the HRA in order to continue health plan coverage. Use an annual application process for continuation of health plan coverage that requires completion of an imbedded HRA. Require completion of the HRA to continue health plan coverage!

Strategy #6 – require completion of the HRA as part of the application to access a Section 125 Cafeteria Plan. Employers are free to require completion of an application for access to flexible benefit choices as part of open enrollment. Instead of limiting it just to the health plan this strategy links it to access to all flexible benefit choices. This way even those who waive their health plan coverage will need to complete the HRA. Link the HRA to access to cafeteria or flexible benefits!

Strategy #7 – link completion of the HRA to a reward of one, two or three additional Paid-Time-Off (PTO) days. Calculate the total number of annual PTO days so that these “Well Days” are included in your overall standard. If the employee completes the annual HRA they receive the additional PTO days. Reward HRA completion with additional PTO days!

Next week we’ll look at how to get your HRA vendor to make needed improvements…..or how to get a new vendor!

Don’t forget, strategies for effective use of HRAs are one of the key skills we teach in our Level 1 WellCert worksite wellness certification program!

HRA as MVP Part 2 – HRA as intervention

Friday, January 30th, 2015

Yes, I am going to start this post making you think about what happens when you do your taxes. Ok, maybe not a great way to start your day—sorry about that!

Stick with me on this. When you do your taxes, the act of just preparing the necessary information and filling out form after form causes you to think more deeply about your financial health than you had for the last few months—maybe than you had all year! The act of doing your taxes probably had you considering things you hadn’t thought about since the prior year: How much should I give to charity? Do I have the right mortgage? Should I re-think my investment strategy? Kind of a check-up for your pocket book.

If you are like me, you might actually consider changing your financial behavior after this annual act of torture. You might actually even start some healthy behaviors—at least for a month or two after this ordeal. You can bet that the IRS isn’t thinking about maximizing our behavior change—or making the most of this opportunity, but these behavioral effects happen anyway!

I would argue that simply filling out the HRA has a measurable impact on health behaviors—even if the HRA is poorly designed or executed. That said, there is so much you can do to maximize the impact of this natural check-up moment.

Here are some powerful ideas we recommend in the WellCert program to make the HRA process for each individual a more powerful behavioral change intervention.

Idea #1 – make the HRA an annual process with a strong reason for employees and their spouses to fill it out. If I could I would make completion of an annual HRA a requirement for every one that is covered by a health plan! You as a health care consumer get health plan coverage at a fraction of its real cost and your responsibility is to give us 15 minutes of your time each year to fill out your HRA. Make the HRA an annual process for everyone!

Idea #2 – provide historical comparisons from previous HRAs. Each person completing an HRA should see their summary data (like their Overall Wellness Scores) at least from the last three times they completed the HRA. Actually it would be even better if they saw their scores for the entire history of their completion of an HRA! Think about it like providing a “highlight reel” of the pattern of their past responses!

Idea #3 – provide a personal or online discussion or interpretation of what the HRA report is saying. We used to do group interpretation sessions where people could get their questions answered. These also would deal with helping the person develop a couple personal wellness goals or objectives. Using current technology we can now provide an online learning module that can help accomplish what we used to do in these group sessions. Offer an interpretation session that helps them identify 1 or 2 personalized next steps!

Idea #4 – make sure their personal health reports from the HRA provide fresh insights about their health. If each year’s report from the HRA is the same how can it provide much value to people? We need to put much more pressure on our HRA vendors to improve the utility of HRA reports. It’s not a technical limitation – it’s a design limitation! Assure that new and fresh insights come out of every HRA experience!

Idea #5 – require a face-to-face or telephonic discussion of each person’s HRA results with a certified wellness coach. Using a series of questions the coach can help the individual better understand the HRA results and can assist them with making small improvements in their health behavior. Discuss the report and mutually plan small improvements!

Idea #6 – provide a meaningful incentive reward for health and wellness improvements. Paying a $1,000 a year less for health plan coverage would be an example of a meaningful reward attached to several small changes or improvements in health behavior. Achievement, improvements or straight participation could all qualify. BTW: The employer doesn’t have to provide the $1,000 – it can be funded by restructuring the employee’s health plan premium contribution. Reward wellness behaviors and outcomes in a real way!

Next week we’ll look at how to boost completion rates.

Don’t forget, strategies for effective use of HRAs are one of the key skills we teach in our Level 1 WellCert worksite wellness certification program!

Part 1 – How to make your HRA a WOW experience

Tuesday, January 13th, 2015

flickr – He doesn’t like your HRA either

I hope you had a great holiday season! Always nice to regroup, be with family and refresh! Right before the holidays I wrote about a new study on the effects of a Health Risk Assessment (HRA) in a health plan setting that was just published in JOEM. Several commenters questioned the magnitude of results reported in the peer review article and we continue to dialogue on the interpretations and implications of the article.

However, my bottom-line point is that I believe that the average HRA out there is designed and used in a way that produces very little positive effect on program participants, even though researchers like Sieck and Dembe continue to provide alluring snapshots of its potential.

Michael Hyatt, in his landmark book, “Platform: Get Noticed in a Noisy World” unequivocally states that in order to be taken seriously now days we need to strive to give our audience a “wow” experience. In other words….taking your wellness program’s HRA needs to be a “wow” experience for every participant!

Getting to “wow” means making the experience more powerful and memorable. Now be honest: does your program’s HRA provide that kind of experience to participants now? I seriously doubt it.

How can you make the HRA a “wow” experience for your program’s participants? I would like to share four steps to help you do just that.

Step #1 – make sure that each participant clearly understands that the HRA is part of an ongoing process to provide practical help for improving their personal health and well-being. Plan on at least three carefully crafted messages about this issue, used at least three separate times each with employees. Don’t assume that they know this… We know it but I have found employees often don’t! It’s an important tool for health improvement!

Step #2 – make sure the participant knows that the HRA is important to your organization. That happens when you connect completion to a lower health plan premium contribution or by posting organization wide completion goals and actuals. It also helps to repeat messages about the value of the HRA to the organization and its value as a tool for health improvement. Emphasize the confidentiality of the information they share. Let them know that the process of completing the HRA has been shown to have positive effects on people’s health and their use of health care. (Cite the JOEM article) Finally, make sure your messages about the HRA are all written from the perspective of the benefits to the user. It’s important to your organization!

Step #3 – make sure the entire HRA completion experience is technologically pleasant for the user, from the moment they sign on to the point that they have completed it. This includes a number of key things: ease of access and entry, single sign on, quality of screen views, color and graphic standards used, flow of questions, presence of branching logic, helpful explanatory links, and an interesting range of comprehensiveness of topics and issues (“actionable insights”). Of course it goes without saying that the experience should be as short as possible, and visually hide questions and pages that aren’t relevant. If you aren’t using the information, ditch the question sets. Use technology to make it painless!

Step#4 – make sure you given them an almost instantaneous version of a graphically attractive personal report that is: easy to read, provides comparisons with previous HRA results, lays out small practical steps that can be taken to improve health, contains active links for selected self-tests and actionable follow-up steps, and each year the individual’s personal report from the HRA should cover fresh health and wellness issues based on the responses of the participant. Also each year new questions should arise from the previous year’s information provided by the participant. Reward the employee for every data-point they shared with rich feedback and details. The HRA must provide valuable information for the user!

Push your team, your vendors, and yourself for WOW and you will see participation improve and employees keep filling out these instruments.

Next week we’ll look at how to make the HRA process a more powerful behavioral change intervention.

Don’t forget, strategies for effective use of HRAs is one of the key skills we teach in our Level 1 WellCert worksite wellness certification program!

The HRA: Your Wellness Program’s 2014 MVP?

Friday, December 19th, 2014

flickr

OK, hear me out… This isn’t 2004, I know, but some new research has shown us again not to pan the humble HRA. The Journal of Occupational and Environmental Medicine for December just came out with a great new study that shows that the HRA ALONE drove significant reductions in seven of eight key health risks and led to CUTTING THE AVERAGE HEALTH CARE COST IN HALF AFTER THREE YEARS (You can get the abstract of the article here).

This is interesting timing because in meetings with wellness program managers in the Midwest just a couple weeks ago, I was hearing about how passé HRAs are. One seasoned wellness leader said, “My employees often say that their HRA results are the same every year–so why should they fill one out?” Another said, “[HRAs] are boring and hard to get people to complete.”

I have to think that these well-meaning wellness professionals must be somewhat representative of many of you out there. Have you had a challenge getting folks to complete HRAs? Tell us in the comments your challenges and your ideas for getting more out of your HRA…

So as an ode to the humble HRA, I want to do a couple posts on them in the New Year. First, we’ll look at how to make the HRA more of a memorable and powerful intervention, second, how to drive much greater participation, and third, we’ll give you some edgy ideas on how to push your vendors (or reasons to fire vendors that can’t cut it).

But first …..take a few minutes over the holidays to consider your HRA. This thing should feel like one of your children or at least a beloved pet! It is such an important part of delivering results-driven wellness. How can you plan program interventions without it? How can you risk stratify your population without it? How can you measure your program’s effectiveness without it?

For something so important, of course you would have to fight for every percentage-point of participation, and doggedly look for ways to improve the user experience.

Join us in January to learn about breathing new life into the humble HRA!

May these last two weeks of the year be a time of enjoying family, friends and the joys of the holidays!

More Power Plays: Using economic arguments for wellness

Tuesday, December 9th, 2014

flickr, aswendener

I just went through a list of key humanitarian arguments for wellness programming in our last post, but we also need to play our economic cards as well! Remember our series on how to measure the five major economic variables that wellness programs impact in work organizations? Health plan cost, sick leave absenteeism cost, workers’ compensation cost, disability insurance costs and presenteeism costs. Now let’s talk about how to effectively position the economic rationale for wellness.

Economic Rationale: It’s the Money Stupid!

For decades wellness advocates have promoted programming to senior managers as tangible ways to affect health plan costs, whose rapid increases have deeply troubled all organizations. But over the past decade single digit increases have replaced the double digit increases of previous decades removing some of the economic pressure for wellness. Looking forward under the ACA it’s difficult to know exactly what is likely to happen to national medical trend. My opinion is that we are likely to see high single digit annual increases for the foreseeable future because I believe that there are ample market and population undercurrents that will guarantee this pattern. Even with steady rates of growth in per capita health plan costs I believe it makes good sense in most cases to position wellness as addressing all five economic variables that are important to employers.

We have pulled together a few arguments you can use to connect the dots between wellness and bottom-line impact:

Argument #1: Good health is good business!

We intuitively know that healthy employees cost less and can produce more.
Most organizations including yours can benefit from increased efficiency.
Wellness can help employees increase their efficiency.

When to use this argument: In businesses with management that is new to wellness, this general argument is very powerful.

Argument #2: Wellness can be focused on specific (and multiple) economic variables

We have a large number of scientific studies of the economic return from wellness programs. (Watch for our updated eBook that examines 90+ peer reviewed studies)
We can implement specific interventions targeted on each of the five economic variables.
Wellness can be designed and implemented to maximize economic return.

When to use this argument: In companies with an aging workforce, increasing market competition or ailing profitability, this argument would be most effective with all levels of management.

Argument #3: The economic return of Wellness can be rigorously measured

To gain an accurate accounting of the full economic return from a wellness program requires a sound evaluation design and some money spent on evaluation research.
Most organizations including yours can design and conduct a rigorous economic evaluation with a little focused help.
Wellness can be economically validated through sound program evaluation methods.

When to use this argument: In companies with a high expectation for quantitative evaluation, this argument works best with managers.

Argument #4: Wellness economic return needs to reflect a valid and fair comparison between the program’s costs and savings

We need to recognize that wellness programs affect all five economic variables but if we only look at one or two and then compare it with the total direct cost of the wellness program we are unfairly examining economic return.
Most organizations including yours probably don’t look at all five economic variables.
To be fair the total cost of a wellness program should be compared with all the economic savings caused by the program.

When to use this argument: When a company’s management places great importance on Return-on-Investment (ROI) but fails to see the full economic picture this argument is often helpful.

Argument #5: Wellness can be configured to better balance short and long term economic return

Wellness programs need to take a balanced approach to short and long term economic return.
Most wellness programs are heavily weighted to produce long term economic return.
Wellness programs can be configured to include short term economic return through interventions such as: medical self-care, consumer skill building, injury prevention, high risk pregnancy prevention, intervention for somatization disorder, presenteeism interventions, etc.

When to use this argument: When an organization’s management have an immediate need for economic return, this argument works well.

Other arguments indirectly related to the organization’s bottom-line that might help…

Argument #6: Wellness can directly improve the economic condition of the average employee

Healthy people have lower out-of-pocket health costs and can benefit from using pre-tax dollars to pay for their out-of-pocket health costs. In addition wellness financial incentives can benefit those who participate in wellness programs.
Wellness programs that address “financial wellness” often improve the financial well-being of employees and their families.
Wellness can lead to significant financial benefits for employees.

When to use this argument: In organizations with collective bargaining, labor force and employee relations challenges and recruitment needs management often resonates to this argument.

Argument #7: Wellness can be used to help reduce the “entitlement mentality” of employees

Employers need to reduce the sense of entitlement that characterizes most employee groups.
Wellness can be positioned as part of the emerging partnership between employers and employees, particularly if information on the relationship between health risks and health costs is shared with employees.
Wellness should be seen as an opportunity to work together to help preserve the generosity of health plans, insurance benefits and future compensation.

When to use this argument: Organizational managers that have a long history with a work force that evidences a deeply held sense of entitlement should be good candidates for this economic argument.

As with playing your humanitarian cards, it is critical that you narrow your choice of arguments to focus on one main argument in the economic area. Even though we may see all the many benefits of wellness, executives can easily get overwhelmed with a laundry list of rationales. Often they perceive that many ‘good’ arguments aren’t as convincing as one or two powerful ones that fit their strategic imperatives and are followed up with particularly cogent (and pragmatic!) examples.

When you think about your audience, one key question is how they think about the total health-related cost of their employee base. How much are employee-related costs on their minds? How much pain do they feel today about health-related costs? Are they worried about future costs or trends? Have they determined what the effect of future cost increases will be on the organization? Are they feeling the burn on the total employee costs of their business? How do these costs compare to expected after-tax-profitability (or net revenue in the public and non-profit world)? National data shows that these five economic variables represent between $25,000 to $35,000 of annual cost per employee per year. If they grow at a rate of 10% per year…. can your organization survive another decade?

Executives who feel cost and competitive pressure strongly are typically the best targets for the economic message, but in almost every setting, your best bet is to pair one strong humanitarian argument with an equally strong economic argument to seal the deal!

Don’t forget, strategies for building executive support for wellness is one of the key skills we teach in our Level 1 WellCert worksite wellness certification program!

Getting through to execs about wellness: part 1: humanitarian arguments

Monday, December 1st, 2014

flickr, ANVRecife

We just went through a five-part series on measuring the economic impact of wellness for employers. You get the picture – money matters! But people matter too! We have to speak to both sides of the executive brain to get the right level of support– by communicating both the humanitarian and the economic case for wellness. Let’s start with the humanitarian card.

Humanitarian Rationale: It’s the People Stupid!

For decades wellness advocates have told senior managers that wellness programming is a tangible way to signal how valuable employees are to an organization’s success. If senior managers resonate with that message, you should give it to them loud and clear. However, how you frame it can have a big impact on whether the arguments win the day. As in all communication, the most important element is knowing your audience. What are hot-button issues facing the organization? New competitive dynamics, aging employees, retention, technology, outsourcing—know what your execs care about. The key to connecting with executives is making sure wellness is seen as highly relevant in the very issues that are keeping them up at night. Here are some arguments that key into the humanitarian benefits of wellness but connect strongly to the issues executives face every day:

Argument #1: Wellness differentiates our workplace

We wouldn’t have a business or organization without people and we need our people to want to work here.
Most organizations including ours (yours) don’t provide real strong reasons for people to want to work here.
Wellness can help them want to work here.

When to use this argument: In industries that compete hard for talent, this argument would be most powerful.

Argument #2: Wellness drives employee engagement by minimizing distracting health problems

We need to have people want to fully engage in this organization.
Unhealthy lifestyles often prevent them from fully engaging.
Wellness can help them fully engage by freeing them up to focus on things other than their health issues.

When to use this argument: In companies with an aging workforce or facing change in their industry (when they need maximum flexibility from their workforce), this argument could be most effective.

Argument #3: Wellness drives employee engagement by proving they work for a caring organization

To gain full engagement, we need to employees feel that we care about them as people.
Most organizations including ours (yours) don’t provide much evidence for this.
Wellness can be the tangible evidence that we care about our employees as people.

When to use this argument: In companies with aging workforces where retaining talent is imperative, this approach would fit best.

Argument #4: Wellness can improve community support for our organization by proving we are a good corporate citizen

We need to be perceived as a “good” corporate or organizational citizen in our community.
Most organizations including ours (yours) don’t do a lot to earn a “good” citizenship status.
Wellness can be seen as tangible proof of our “good” corporate citizenship.

When to use this argument: When a company has a contentious or difficult relationship with its community, politicians, or regulators, senior management may be looking for creative ideas to strengthen public perception.

Argument #5: Wellness can improve impaired employee morale

We need as much “good will” as we can get from our employees and their family members.
Most employees and their family members don’t appreciate what we do for them now.
Wellness can be used to help educate about what we do for them and can increase our “good will” quotient with employees and their families.

When to use this argument: When relationships with unions or employee groups are difficult, management may be looking for new ways to build morale, making this argument effective.

Argument #6: Wellness makes employees better off—it is the right thing to do with the organization’s resources

The workplace is potentially a very powerful environment to affect behavior and attitudes.
Most employers and organizations don’t utilize that potential to any significant degree.
Wellness can capture and more fully make use of that potential.

When to use this argument: In organizations with a strong moral or ethical focus, or organizations with a faith based component (or heritage), this argument can be very effective. It also can be appropriate for non-profit and government entities.

Argument #7: Wellness enlarges the role of the organization to benefit employees more

There is a basic moral issue about the role of employers in improving our society.
Few employees do much about this issue.
Wellness should be seen as the morally “right” thing to do for employees, their family members and the community.

When to use this argument: Similar to #6, this argument fits best when managers already have a world-view where they see the role of their organization as a force for good and are looking for ways to make a bigger impact. This approach fits best in environments with a strong service orientation such as healthcare, government, and non-profit sectors.

It is critically important that you narrow your communication to focus on one main argument on the humanitarian side. Even though we see all the many benefits of wellness, executives can easily get overwhelmed with a laundry list of rationales. Often they perceive that many ‘good’ arguments aren’t as convincing as one or two powerful ones that fit their strategic imperatives. That said, your best bet is to pair one humanitarian argument with a connected economic argument to speak to both sides of the executive brain and seal the deal! Next week’s post will give you some ideas on how to do that.

Don’t forget: building executive support for wellness is covered in our FREE excerpt of our Level 1 WellCert worksite wellness certification program!

5 ways wellness reduces costs – Part 5: presenteeism costs

Monday, November 24th, 2014

Flickr & Missparticipacion

Presenteeism is the fifth type of health-related cost that employers commonly experience. In this recent series of posts we have looked at health plan costs, sick leave absenteeism costs, workers’ compensation costs, disability insurance costs and now presenteeism cost. This is a newer concern for employers. Research has demonstrated that when employees decide to come to work when they have an underlying health problem (Like a cold, allergies, migraines, indigestion, muscle pain, etc.) they are not as productive on the whole. The amount of productivity loss can be measured by using specific questions on survey instruments such as HRAs or annual evaluation surveys. This loss of productivity can be reduced by wellness programs. It’s high-time more wellness program managers like you take credit!

Presenteeism: the problem

First off, here are the most typical health problems that create presenteeism losses for employers identified in the scientific literature:

Anxiety, Arthritis, Bladder problems, Chills, Chronic back pain, Chronic fatigue, Chronic neck pain, Chronic obstructive pulmonary disease, Congestive heart failure, Constipation, Coronary heart disease, Cough, Depression, Diabetes, Diarrhea, Fever, Fibromyalgia, Hay fever, Heartburn, High blood pressure, High cholesterol, Hopelessness, Hypertension, Indigestion, Irritable bowel syndrome, Low energy, Migraine headaches, Muscle soreness, Nausea, Nervousness, Obesity, Osteoporosis, Other cancer, Other chronic pain, Panic attack, Psoriasis, Refux disease, Restless, Rheumatism, Runny nose, Seasonal allergies, Skin cancer, Sleep disorders, Sore throat, Stomach ulcer, Substance abuse, Tension headaches, Urinary problems, Vertigo, and Watery eyes

According to the National Health Survey the average working adult American experiences an average of two medical symptoms a month or twenty-four a year. The majority of the time we choose to go to work rather than stay at home. Presenteeism losses are therefore very common for all employees and employers. Studies have found that presenteeism effects more than 8% of the total productivity of a work force! That means that in most organizations 8% of the total compensation cost pays workers for non-productive time. Total compensation or salary, wage and benefit costs are usually the largest costs for most organizations across industries. Another way to think about it: presenteeism takes away economic value that amounts to 2 to 4 times what employers spent on employee health benefit plans! If wellness programs can reduce the frequency and severity of many of the common self-limiting health problems employees commonly take to work, it can have a significant impact on the productivity a work force. We saved a heavy-hitter for last!

Ways wellness reduces presenteeism losses

Wellness programs can reduce presenteeism loss in several different ways depending on the design of the wellness program:

Reducing health risks: The first way is by reducing health risks in individuals and collectively in the population at large which then reduces the occurrence of those common medical symptoms so that less productivity losses take place.
Medical self-care training: The second major way is to provide medical self-care training to employees to help them make better decisions about preventing and treating those all-to-common medical problems. This training can be carried out in person or through Learning Management Systems (LMS). It can also mean helping people access medical self-care resources online such as WebMD’s public portal at www.webmd.com.
Self-care resources: The third major way is to provide online resources at work and possibly onsite resources to help employees minimize the adverse symptoms associate with the various common health problems. For example, some companies provide a “Not Feeling Good?” tab on their Intranet home page site. This also may include providing access to specific Over-the-Counter (OTC) and prescription pharmaceuticals that are designed to minimize the symptoms associated with those specific health problems through an occupational health unit or onsite primary care center.

But if you want to address presenteeism as a possible area of economic return for your wellness program you have to have a credible method for measuring presenteeism losses and the ability to track it over time. There are a couple of ways to do this.

First you can use one of the more valid standardized instruments for measuring presenteeism such as the Work Limitations Questionnaire (WLQ) or Stanford Presenteeism Scale (SPS). These survey instruments are multi-question and can be used in a random sampling method with program participants and non-participants as well as prior to the introduction of the wellness program and at regular intervals afterward. They provide a quantitative estimate of the productivity loss that can be converted into monetary values. This approach takes some effort but does provide a valid measurement of productivity loss.

Second, a global presenteeism question can be added to your HRA or annual wellness program evaluation survey. This question would read something like this:

“In the last month that you have been at work about how much of your work productivity has been adversely affected by any of the following health problems? Please estimate the approximate percentage of your work productivity reduced by any of the identified health problems. _____.__ % (You can use the above box with the various health conditions)

Third, if you have a website that provides advice for dealing with the various common health problems you can have a follow-up survey mechanism that asks users to estimate the effect of the help they received on the users work productivity which can them be used to monetize the value of the wellness program’s intervention.

As with the other measurement methods we have discussed there are lots of ways to strengthen or weaken the validity and utility of the findings from your evaluation. Also this approach doesn’t necessarily address the pain, discomfort, disability, work and family disruption, quality of life effects of fewer injured or ill employees due to healthier lifestyles brought about by the wellness program, but you can certainly mention it.

Presenteeism isn’t something most executives spend a lot of time thinking about. If you are going to communicate the presenteeism benefits of your program to executives, you probably will have to spend significant airtime explaining the concept to them.

Remember: always make your methods for estimating savings transparent so if critics have concerns they can be challenged to come up with a better approach.

Check out our wellness economics series courses on measuring the impact of wellness on presenteeism costs to go deeper on this topic.

5 ways wellness reduces costs – Part 4: disability insurance costs

Monday, November 17th, 2014

Flickr, Noblitt

This part four of my five-part series on getting the complete picture on the economic impact of your wellness program. Last week I covered workers’ compensation, the week before was on sick leave, and the first week was on health plan costs. Today we are on to disability costs…

Not all employers offer disability insurance coverage to their employees but they should! Disability coverage protects employees financially against injury or illness that happens outside of work and keeps them from working. There are two kinds of disability insurance (DI) coverage. One is called Short Term Disability (STD) which usually provides about 60% of your salary or wage tax-free beginning 30 – 90 days into your absence and lasts up to six months. The other is called Long Term Disability (LTD) which usually starts at the six month mark and usually covers up until two years. Coverage does vary in different markets but these parameters are pretty common.

This private insurance coverage is usually insured rather than self-insured so any economic savings from generally healthier employees usually results from lower increases in future premiums. However, an employee that is absent from work costs the employer more than just his or her salary or wage. For one thing, if there are fewer DI claims then future premiums are likely to be lower. Wellness program managers should dig deeper to measure the other costs of disability. DI claims go hand in hand with needing additional workers to make up for missing employee(s), loss of work continuity, loss of additional sales, reduced quality of customer service, more cross-training needed, and less efficient utilization of space and resources. These costs are real but very hard to nail down and measure over time. You can make an estimate of these costs but you will need to make your assumptions explicit. BTW: the incidence of disability insurance claims are usually in the area of 1% to 4% of a work force each year. Remember, if your organization does not provide disability insurance coverage to employees then there won’t be any savings from your wellness program.

Here again as with any relatively rare events you need a large number of employees (events) to measure and track these costs with acceptable levels of accuracy and validity. Our measurement strategy with DI claims costs are also similar to how we deal with Workers’ Compensation costs and savings. Here also we only want to work with “closed” or completed cases where no additional claims costs are likely to occur.

Measurement Options

The first option is to track the overall pattern of the frequency and severity of disability insurance claims costs in your entire work force. If you have from 50 to 1,000 FTEs covered by disability insurance this method probably makes sense. You then are tracking the overall annual frequency (Number of closed STD (or LTD) cases per year per100 FTE’s) and the severity (The average cost per closed case) and creating a time-series trend analysis for each metric by year. If you see a pattern of declining frequency and/or severity and nothing else changed in how you manage these costs then you can attribute the reductions to the effects of your wellness program. To derive the economic value you would multiply the reduced frequency times the reduced severity.

The second option If you are dealing with employee groups with more than 1,000 FTEs is to track the frequency and severity of disability claims for wellness program participants as a group versus non-participants as a group over time. If the participants and non-participants are close in disability insurance claim experience for both frequency and severity during the baseline or pre-program period, then any positive trends are again likely to be related to the wellness program. You then take the frequency difference between the participants and non-participants and multiply it by the difference in average cost for the two groups.

Don’t Forget to Keep track of Your Assumptions

Again, make all your econometric assumptions explicit so that everything in your methodology is transparent to your audience. It will also help you duplicate the analysis for the following years.

As with workers compensation costs, if your organization is not doing much to manage or minimize these costs (and the illness and injuries that employees experience!) then there may be some real opportunity for savings. If your disability insurance claims experience is already tightly controlled and managed then don’t expect a lot of savings associated with your wellness program.

This approach doesn’t necessarily address the pain, discomfort, disability, work and family disruption, quality of life effects of fewer injured or ill employees due to healthier lifestyles brought about by the wellness program. You should definitely include these non-economic impacts when you communicate your program’s effects! In my experience, the most powerful way to promote your program’s value is to provide BOTH hard economic sizing as well as the human impact of improved health.

Again, always make your methods for estimating savings transparent so if critics have concerns they can be challenged to come up with a better approach.

Check out our wellness economics series courses on measuring the impact of wellness on disability insurance claims costs to go deeper on this topic.

5 ways wellness reduces costs – Part 3: workers’ comp costs

Friday, November 7th, 2014

From Flickr & dthomasd

I am doing a five-part series on how to measure the impact of your wellness program on five key employer costs. I started with health plan costs, and last week covered sick leave costs. Today’s post is on measuring the impact of your wellness program on workers’ comp costs.

All employees are covered by some form of workers’ compensation. This state-specific, legally required coverage has been around for more than 100 years and protects all of us when we experience an illness or injury related to our work. It is “no-fault” in nature so that employees and employers don’t have to prove who was at fault in order to get medical expenses covered and a paycheck while away from work. Workers’ comp coverage is usually provided by state government through very large pools made up of many employers. Some types of businesses have very high costs associated with workers’ comp while others have minimal cost.

Researchers at the Health Management Research Center at University of Michigan found that employees with lots of health risks use a great deal more workers’ compensation dollars than those with minimal health risks. One landmark study showed that high risk individuals with multiple health risks used almost 20-times the average amount of workers’ comp dollars per year than someone without those risk factors!

Executives can be skeptical about the tie between workers’ comp and wellness, thinking that workers’ comp claims is basically what happened ‘that time Joe fell into the milling machine’. What most executives (and many wellness professionals!) don’t realize is that about 50% of workers’ comp claims are strains, sprains and back injuries. When your wellness program gets more employees exercising (and taking care of their back), they get injured less, and bounce back faster from injuries. This is just one intuitive story behind the empirical findings.

Generally, wellness programs that are effective in helping employees reduce their health risks will lower workers’ compensation costs. If your company pays into these state pools in a way that is influenced by your actual claims expense then there is measurable employer cost savings attributable to your wellness program.

In simple terms, and in the same way we did with sick leave, we need to compare the trends in per-employee workers’ compensation costs incurred by employees who participate in wellness programs to those of employees on the sidelines. We also want to look at the business-wide use of workers’ comp over time. By making these comparisons, we can infer the effect our wellness programs is having on workers’ compensation. Here again, gathering the data to make this comparison can be tricky depending on how your organization is handling workers’ compensation costs—a factor that is strongly related to how aggressive these costs are currently being managed.

If your organization is not doing much to manage or minimize these costs (and the illness and injuries that employees experience!) then there may be some real opportunity for savings. If your workers’ comp experience is already tightly controlled and managed then don’t expect a lot of savings associated with your wellness program.

Are you big enough?

You probably want to begin by determining if you have enough employees and enough time to conduct any kind of meaningful analysis. You probably need at least 500+ employees in each group (wellness participants and non-wellness participants) and a year of data to start with. That is necessary for you to derive a rough baseline regarding your workers’ comp experience.

You usually want to look at two issues. The first is the frequency of workers’ compensation (WC) claims. This is simply a count of the WC claims filed during a set period of time, such as a year. Typically this might be 2-8 claims filed per 100 FTE employees per year. I want to go back in time 2-5 years before introducing the wellness program and then plot these numbers out as a trend over the years. I also want to monitor in the coming years the rate of WC claims filed by the work force using these same frequency measures. Ideally I would like to see the frequency trend diminish over time as the wellness program helps employees be healthier (and perhaps more safety conscious!).

The second thing I want to do is examine the pattern of average cost of each closed claim (remove claims that may have additional costs). You can appreciate if I only experience 2 or 3 WC claims per year then the average cost of the claims is going to vary tremendously and I won’t be able to use the data to demonstrate the economic value of the wellness program. However, if I am big enough to have 20 -100 WC cases each year then I can get some meaningful data out of changes in the average case cost. If the data shows that the frequency of WC cases is down by 15% and the average case cost is down by 23% after the wellness program has been introduced and there was no change in our safety activities or WC management process then I would feel reasonably comfortable suggesting that the wellness program had produced some WC savings that should be included in the economic return analysis. I can monetize that return by multiplying the cases avoided times the reduced average case cost.

As with the sick leave costs example, if you can measure any other costs such as hiring a temporary worker to replace the injured employee then you have some additional economic savings to include if that is reduced as the wellness program is introduced.

Remember: always make your methods for estimating savings transparent so that critics can follow your methodology. If they poke holes, they can always be asked “Well how would you suggest we do it?”

Check out our wellness economics series courses on measuring the impact of wellness on workers’ compensation to go deeper on this topic.