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Health and Wellness: The Shift from Managing Illness to Promoting Health
Issue Brief No. 121
Despite an acknowledged lack of evidence of investment payoff, health plan initiatives to promote health and wellness are now commonplace, according to findings from the Center for Studying Health System Changes (HSC) 2007 site visits to 12 nationally representative metropolitan communities. Much of the impetus has come from employers—primarily large employers—that are incorporating health and wellness activities into benefit designs that place more responsibility on employees for health care decisions and costs. Health plans now offer a range of health and wellness activities, including traditional worksite health fairs, screenings and educational seminars; access to behavior modification programs, such as weight management and smoking cessation; and online tools, including health risk assessments. Engaging enrollees in these activities, however, is challenging because participation typically is voluntary. Another barrier is employee privacy concerns. More health plans and employers are turning to financial incentives to secure greater participation. Ultimately, however, the credibility of health and wellness activities as mechanisms to improve health and contain costs is dependent on evidence demonstrating their clinical and financial effectiveness, as well as consumers acceptance and validation of their legitimacy.
Health and Wellness Initiatives Part of Broader Consumerism Strategy
ueled in part by heightened awareness of the nations growing
obesity crisis, health plan initiatives to promote health and wellness are now
commonplace across the country, according to findings from HSCs 2007 site
visits to 12 nationally representative metropolitan communities (see Data Source).
Much of the momentum has come from employerspredominantly large employerslooking
for effective long-term strategies to address rising costs and to support their
broader consumer-based strategy of giving employees more responsibility for
health care decisions and costs. As a Phoenix health plan executive commented,
Overall health is not improving, although consumers appetite for
health care continues to increase. Employers are concerned about affordability
want to offer coverage, but they also want to engage their employees differently.
Health and wellness initiatives also offer health plans a way to reposition themselves with employers and enrollees, alike. As an Indianapolis health plan executive said, Our value proposition has to be built around how we are going to help you manage health care costs. This involves not just managing illness, but where health care companies have been [deficient] in the past is in how often they talk to healthy members. They only talked to members when they had a claims issue. We are trying to build an organization that is interactive with all members, not just the ones who are sick.
Employers hope that health and wellness activities will reduce absenteeism and
improve productivity, as well as avoid major, costly medical events. A recent
American Hospital Association report, for example, estimated that three chronic
diseasesasthma, diabetes and hypertensionresult in 164 million days
of absenteeism each year, costing employers $30 billion.1 As a northern New
Jersey plan medical director surmised, When employers look at employees
and see many are obese and understand the implications for diabetes and cardiovascular
disease, they start keeping an eye on wellness.
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unding for health and wellness activities comes from several sources. For fully insured products, the cost typically is incorporated into the premium, while self-insured employers typically pay a fee to the plan administrator. Despite growing enthusiasm for health and wellness activities, the investment payoff has been difficult to demonstrate. A benefits consultant in northern New Jersey described the challenge, The costs are difficult to get at. Sometimes its hard to get at productivity. Were moving that way, but its going to be slow going. There is recognition that a healthier workforce leads to less spending and more productivity, but its hard to prove. The challenge is there is no control group to measure it against. There is no way to prove what health spending would have been in the absence of change.
Several health plan respondents also said that it takes at least three to five years to have sufficient information to determine return on investment. Because many of the health and wellness activities in existence today have only been introduced recently and not yet evaluated, there is little credible evidence regarding return on investment. Yet some plans and employers appear willing to invest in these activities, albeit on a generally limited basis, in the near term.
Some employers, particularly small firms or those with more transient workforces, are hesitant about investing in health and wellness activities. As a Phoenix plan executive noted, Part of the issue for employers is how much of an investment to make considering employee turnover. Despite a high turnover rate, one large national retailer headquartered in Phoenix incorporated health and wellness activities in a CDHP option that it began offering employees last year. According to an employer representative, the heath spending account is funded only if the employee completes a health risk assessment and participates in wellness activities.
Increasingly, employers are pressuring health plans (and non-health plan vendors) to demonstrate effectiveness, but much of the existing evidence is preliminary and often anecdotal. For example, early data from a smoking-cessation program offered by a Cleveland plan was reportedly positive, showing a short-term quit rate of 40-45 percent among a group of participating enrollees who used both nicotine replacement therapy and smoking cessation counseling. Health plans also are offering their own employees the health and wellness options they offer to the market more broadly. Several health plan respondents noted that this was important to establish the credibility of these efforts with potential employer customers.
Across the 12 communities, health plan and employer respondents frequently expressed the belief that investment in health and wellness activities is the right thing to do and is particularly important as employees assume more responsibility for health care decisions and costs. Several respondents noted that health and wellness activities seem to be particularly good ways to engage consumers—to heighten their awareness of what health care actually costs and to encourage more proactive participation in decisions about the use of services.
mployers are increasingly looking to health and wellness initiatives to help support their shift to a broader consumer-based strategy of employees taking more responsibility for health care decisions and costs. These activities offer promise for engaging consumers more effectively—to help consumers be more aware, knowledgeable and thoughtful in making health and lifestyle choices, as well as the use of health care resources. But there are significant challenges that will determine how effective health and wellness activities ultimately are, including:
In the short term, it is likely that interest in health and wellness initiatives will gain momentum as employers continue to confront the pressure of rising health care costs. Longer term, however, the degree to which these initiatives are seen as credible health-improvement and cost-containment efforts will depend largely on developing evidence that initiatives are effective—clinically and financially. It also will depend on consumers acceptance and validation of their legitimacy.
|1.||American Hospital Association, Healthy People Are the Foundation for a Productive America (Trend Watch), Washington, D.C. (October 2007).|
|2.||A consumer-directed health plan (CDHP) is typically a high-deductible
health plan coupled with either a health reimbursement arrangement (HRA)
or health savings account (HSA). See also, Tynan, Ann, and Jon B. Christianson,
Consumer-Directed Health Plans: Mixed Employer Signals, Complex Market
Dynamics, Issue Brief No. 119, Center for Studying Health System Change,
Washington, D.C. (March 2008).
|3.||Appleby, Julie, Firm Basing Deductibles on Health Tests Sees Costs Fall Workers Share of Premiums Hasnt Risen in Three Years, USA Today (July 11, 2007).|
|4.||Knight, Victoria E., Wellness Programs May Face Legal Tests Plans That Penalize Unhealthy Workers Could Get Tighter Rules, The Wall Street Journal (Jan. 16, 2008).|
|5.||Rose, Barbara, Employers Experiment with Get-Tough Healthy Regimes Workers, Employers Clashing Over Tough Wellness Programs, Chicago Tribune (Feb. 10, 2008).|
Every two years, HSC conducts site visits in 12 nationally representative
metropolitan communities as part of the Community Tracking Study to interview
health care leaders about the local health care market and how it has changed.
The communities are Boston; Cleveland; Greenville, S.C.; Indianapolis; Lansing,
Mich.; Little Rock, Ark.; Miami; northern New Jersey; Orange County, Calif.;
Phoenix; Seattle; and Syracuse, N.Y. The sixth round of site visits was conducted
between February and June 2007 with 453 interviews. In each community, representatives
from at least two of the largest health plans were interviewed. Health plan
representatives included the medical director, a marketing executive and a network
executive. Interviews also were conducted with benefit consultants, brokers
and representatives of at least two large employers.
ISSUE BRIEFS are published by the
Center for Studying Health System Change.
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