An ounce of prevention

Encouraging employees to make some wise decisions about their health will pay off in reduced benefit costs down the road.

A decade ago, many plan sponsors were conscious of work-site wellness programs, but they probably did not anticipate the extent to which the wellness “lingo” would permeate the world of benefits by the turn of the century.

Today, extensive and far-reaching programs are fast becoming the most desired employee benefit of innovative and proactive employers, but those employers are still a minority. So why aren’t wellness and prevention programs more prevalent?

Implementing a comprehensive wellness program often means a major investment on the part of the plan sponsor. In a sagging economy, employers are reluctant to commit to expenditures that do not have an immediate impact on the bottom line.

So far, much of the research in favour of wellness programs comes from the United States, where the virtues of such programs are celebrated for reducing the costs for the physicians and hospital-related portions of health-care costs. But since most of these costs are paid by provincial governments in Canada, employers here see this cost reduction as no direct benefit to them.

However, there are substantial benefits to be gained from reduced absenteeism, lower treatment costs and reduced drug claims. A wellness program is focused on education and awareness about health promotion and disease prevention. At a minimum, a company can hope to control some of its health-care costs by creating wiser consumers.

Although difficult to measure, there are other benefits such as improved morale and increased productivity, not to mention a better company image and therefore a greater ability to attract and retain top employees.

Canadian research data on workplace wellness programs is limited. However, as more research becomes available that continues to prove wellness programs are beneficial to both sides of the employment equation, companies will undoubtedly shift approaches to include them.

Employers have to be aware that the results of these programs are not immediate, the way some changes to other benefit programs can be.

A parallel can be drawn here to Employee Assistance Plans (EAP), which did not enjoy widespread popularity in the early stages, primarily because the cost-benefit ratio was difficult to quantify. However, as the benefits of these programs were realized, their popularity grew and the number of employers implementing EAPs has grown steadily. The gains of both EAPs and wellness programs are realized over the long term.

A conservative estimate for a company that implements an EAP and/or a wellness/health promotion program, is a return on investment of approximately three dollars for every dollar spent.

The results depend on the corporate culture of the organization, plus the state of the employees’ health prior to the introduction of the program. Another determining factor is the extent and types of programs implemented. As the programs mature, the return on investment increases.

With health-care inflation continually on the rise (about 12 to 15 per cent per year), increasing disability costs, plus the effect of escalating utilization on dental premiums (ranging from seven to 10 per cent per year), employers are seeking ways to reduce or cap benefit costs. As a result, employers often don’t want to consider implementing a new program while still grappling with these “tangible” plan-cost issues.

Instead, employers should be asking themselves, “can we really afford the cost of doing nothing?” This is definitely a catch-22 situation since some form of wellness program awareness, no matter how small, will likely reduce costs down the road.

Companies should attempt to start with programs that have the greatest impact on employees. To do this, a company still needs to do research, gathering information on the most frequent reasons for absenteeism.

A possible tool to assist in identifying problem areas would be to obtain an analysis of drug usage by therapeutic class. For most employee groups over a certain size, this can be achieved without compromising employee privacy and can be obtained by working with the insurance company and its benefits advisor.

This information will allow the company to choose what type of program will be required to best suit employee needs.

Employers also need to understand that these programs are not necessarily expensive. Some low-cost options are: periodic newsletters on health-related issues; establishing a resource centre; or simply making sure that healthy choices are available in the company cafeteria or vending machines.

If premises are available, an on-site wellness fair is both fun and informative for employees. Many vendors will conduct the fairs at no cost to the employer — the only “cost” the employer incurs is the time off for staff to attend the fair. It can be scheduled close to the lunch hour or near the end of the day to minimize this. If more funds are available to earmark for a wellness program, providing a gym membership, on-site daycare, or counselling services available through an EAP program are excellent options, and very effective.

Typical workplace wellness programs promote overall well-being and health by addressing nutrition, exercise, stress management, weight management and smoking cessation, among other things. These programs can also go a step further.

Following analysis of the specific factors affecting employees, through the use of a confidential health risk analysis, programs can be offered that are tailored to distinct needs. This analysis is a confidential assessment conducted by a third party, using surveys, focus groups, or computerized health-risk appraisals, in which employees are questioned about their family health history and personal lifestyle choices.

Each employee receives an individual comprehensive health profile, including such items as their fitness level, heart health, eating habits and ability to cope with stress. As part of the employee’s personalized report, there is information on how to cope with, or rectify a specific condition. The information is also compiled in aggregate for the plan sponsor, identifying potential high-risk areas (employees with symptoms associated with cardiovascular, stress, mental health and so on) so that problem-specific programs might be implemented.

Such programs can target asthma, diabetes, women’s health issues, ulcer management, blood pressure reduction, stress management, or relaxation training. Other programs can be established to target a specific condition, such as flu clinics in the fall each year.

Wellness programs will slowly enter the world of benefits, as forward thinking organizations implement programs and report favourable results.

Some employers may simply have to have faith that the positive outcomes that other companies have realized will be paralleled in their own organization. Regardless, there is a need to continue educating both employers and the working population about the benefits that can be reaped from a wellness program. Adopting these programs should be viewed as an investment and not a cost.

Terry Wallace is a senior consultant in the Toronto office of Heath Lambert Benefits Consulting Inc. She can be reached at [email protected]

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