Healthcare cost trends have long been moving in the wrong direction. Some employers have successfully reduced the upward trajectory of health-related expenses with health and wellness programs, but wide variations exist in program performance. Newer approaches to health and well- being based on recent advances in science and research significantly improve outcomes.This paper identifies seven key areas in health program design with the highest potential to achieve change. The most effective solutions support well-being across total populations, focus resources to prevent the high- est-cost health developments, and motivate change with personalized support that drives the step-by-step process, recognizing the many factors that influence health behavior.
Smart approaches can reverse the trends.
Many companies have implemented workplace health and wellness programs. In the U.S., 58% of employers are offering some type of wellness benefit, ranging from web-based resources to telephonic and onsite coaching programs. The percentage of large firms (200 or more workers) offering at least one wellness program grew from 88% in 2008 to 93% in 2009.7
The quantity of health and well-being programs available in the marketplace continues to grow. A meta-analysis of literature on costs and savings associated with workplace disease prevention and wellness programs found that for every dollar spent on wellness programs, medical costs fall by approximately $3.27 and absenteeism costs, by $2.73.8 Figure 1.
Quality has improved with advances in knowledge and research. Yet national health statistics—and wide variances in program approaches and results—indicate room for improvement. At Healthways, the Center for Health Research uses objective scientific methods to:
• Assess and validate the value of health solutions, methodologies, and tools
• Support the development of improved solutions and approaches
• Lead the healthcare industry in innovation
Beyond committing substantial internal resources to best science, Healthways collaborates with well-known external experts—M.I.T. AgeLab, Pro-Change Behavior Systems, Gallup, and other strong partners.
Research, partnerships, and three decades of real-world experience have put Healthways on a continuous path of improvement. Through external assessment and internal evaluation, Healthways has identified seven key areas in health program design with the demonstrated potential to significantly improve the outcomes of employer health programs.
1. Serve the total population, looking beyond physical health, to cut costs and raise productivity.
Most mature employer health programs use Health Risk Assessments (HRAs) as a starting point for identifying health needs and as a benchmark for health improvement. HRAs focus primarily on physical health and may include limited aspects of mental health. Index findings and other research substantiate the need for a more multidimensional assessment— one that captures corporate culture and the influences of social and emotional factors on health and workplace performance.
Nearly half of all Americans suffer from one or more chronic diseases and each year millions of people are diagnosed. Health support programs that serve only on a subset of the population—traditionally defined as those with existing chronic diseases or high health risks—can fail to prevent those new diagnoses and significant associated costs.
As leading wellness researcher Dee Edington noted at the University of Michigan’s 28th Annual Workplace Wellness Conference9:
• Risks flow toward high-risk, and costs toward high-cost, if left unchecked.
• Keeping healthy people healthy is a critical health management strategy.
Next generation programs must address social and emotional needs in conjunction with physical health, or even in advance of it.
A comprehensive, three-pronged strategy—optimizing care for those with health conditions, reducing and eliminating lifestyle risks, and sustaining good health—serves the total population and prevents both short- and long-term avoidable costs.
The cost benefits of prevention extend far beyond medical expenditures. Studies have calculated productivity costs associated with chronic disease and related health risks to be up to four times those of direct healthcare costs to employers. 10
New insights into the factors that influence health and productivity suggest that health support programs couple a complete view of the total population with a more complete view of individual health and the work environment.
In her featured presentation at the Workplace Wellness Conference, Dr. Cathy Baase, Global Director of Health Services for Dow Chemical Company, emphasized the importance of including culture in corporate health strategies. The National Business Group on Health’s National Conference on Health, Productivity, and Human Capital in October 2009 was focused on a similar theme.
The Gallup-Healthways Well- Being Index™, a comprehensive measure of national well-being, is amassing new data each day on the interrelationships of factors like social support, job satisfaction, physical health, healthy behavior, and levels of happiness, anger, and stress. Through 1,000 daily surveys, the Index collects and correlates information in six domains—Life Evaluation, Emotional Health, Physical Health, Healthy Behaviors, Work Environment, and Basic Access. Findings since the launch of the Index in January 2008 have substantiated connections between:
• Work environment, physical health, and productivity
• Social support and well-being
• Exercise and levels of stress
• BMI and emotional health, financial stress, and recognition at work
Historically, health support programs to reduce BMI would focus on healthy eating and physical activity. To be most effective, programs also need to address social and emotional needs, such as the ability to cope with stress and the presence or absence of positive recognition for performance at work. Figure 2.
This example supports the recommendation that an expanded view is needed. This information can:
• Arm health professionals with a better understanding of the individuals they are working to help.
• Influence program implementation and communication strategies.Next generation programs must address social and emotional needs in conjunction with physical health, or even in advance of it.
2. Drive participation and sustain engagement with strategic communications, incentives and behavioral economics
Without participants, health support programs don’t have the chance to be effective. According to a 2009 survey of nearly 700 U.S. companies, typically fewer than 40 percent of eligible individuals enroll in wellness programs, and fewer than 15 percent in disease management programs.11 To motivate participation, U.S. respondents in a 2009 global survey of workplace wellness programs spent an average of $163 per employee per year on wellness incentive rewards, up from $145 the previous year.12
Incentives improve participation, but dollars alone don’t deliver sustained program engagement. The Center for Health Research has studied program incentives evidence and best practices, and found:
• Incentives and disincentives can be effective at improving participation and behavior change, but they are not sufficient to improve long-term outcomes
• Incentives are more effective when provided on an ongoing, periodic basis, and when their value reflects the perceived difficulty of the action.
• Incentives must be coupled with well-designed health and wellness programs and effective communication to have the greatest impact.13
High-performing employers identified in the Towers Perrin 2010 Health Care Cost Survey anticipated undertaking more communication activity and using new channels to support health program engagement in the next two years.14 (High performers had lower relative healthcare costs per employee than low performers.)
Best practices in health program communications include:
• Tailoring messages and communication vehicles to the audience
• Minimizing employee privacy concerns
• Maximizing reach with multiple methods and touches over time
• Driving participation with shortterm, team-based challenges
• Demonstrating internal support, beginning with top management
• Tracking and addressing individual changes in program use
Tailored communication messages and rewards, based on individual patterns of interaction, can both improve engagement and lower incentive costs. To maximize the motivational impact of incentives, innovative programs are applying principles from behavioral economics. Figure 3.
People tend to discount the value of things if they do not perceive an immediate benefit – a concept known as hyperbolic discounting. The phenomenon helps explain why as many as 50% of individuals with doctor-prescribed medication fail to take their medication as prescribed.15 Intermittent economic and noneconomic methods of reinforcement can overcome that tendency by providing a perceived benefit, but individuals respond differently to different types of messages and levels of reinforcement. A study of one such program, using proprietary software to determine optimum, individual levels of economic reinforcement, found that it improved medication adherence by 34.6%—to 97.9%— while limiting costs.15 In trial and commercial environments, the same system has produced 33% to 56% increases in sustained adherence to targeted behaviors while decreasing incentive budgets.
3. Use advanced predictive models to focus outreach on high-impact opportunities
Results can guide an appropriate level of intervention for each individual within the population, making the most cost-effective use of outreach resources. Proactive outreach may include care support and coaching from a primary health professional or team. Every member of the population should receive some level of health support.
No organization has unlimited resources to invest in wellness. Investments that deliver the greatest impact will prevent the highest cost, avoidable health problems. The challenge is to anticipate and prevent those health developments before they occur.
Fifty years ago, weather forecasters relied on information from land-based observation stations, balloons, and aircraft to predict the weather. Satellites and sophisticated computer modeling capabilities have since transformed the accuracy and value of weather forecasts. The same phenomenon has begun to take place in the field of health support. Advances in predictive modeling and data analysis allow increasingly accurate identification of the best opportunities to prevent high-cost health problems.
An analysis by the Center for Health Research identified several rules of healthcare costs across total populations.
• A consistently small percentage of individuals typically generate the greatest costs within a population—30% of employees accounted for 80% of one employer’s costs.
• The high-cost population changes from year to year—only 12 to 18% of one year’s costliest group remained so the next year.
• Neither chronic disease nor clinical risks alone best predict healthcare needs and costs. Other important indicators include multiple conditions, medications, prior utilization patterns, self-management, health behaviors, demographics, and psychosocial factors.
• A prediction of high-cost healthcare needs does not guarantee an opportunity to make an impact that improves health or reduces costs.16 Figure 4a-b.
Predictive modeling mathematically determines the likelihood of defined outcomes. Neural net technology builds models by identifying hidden patterns in data—combinations of risks, claims, and other information that signal potential future costs. Predictive models for health support programs should consider:
• Which individuals are likely to incur high costs in a given time period (6 to 12 months or 12 to 24 months) • Cost trajectories—some individuals are likely to return to lower costs and stable health status without intervention.
• Gaps in care, or actionable risks, that can be addressed to reduce disease progression and medical spending.
• The high-cost health consequences of individual risks and sets of risks, in combination with demographics and other available information.
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