As EAP costs remain flat, service has suffered. In the U.S., telephone or e-mail advice is increasingly used instead of face-to-face counselling
In most markets, improvements in quality are rewarded financially. Not so in the EAP market.
That’s because the predominant payment mechanism of capitation — that is, per-employee-per-month — seems to encourage, even reward, reduced levels of service.
EAP vendors with superior methods, under the capitation system, can’t bill the superior alternative to anyone in particular. As a result, ordinary, or even marginal, service receives the same rate as optimal services.
In the United States, rates for employer-sponsored health care have registered double-digit increases for each of the last three years. Prices for EAPs, however, have stagnated for over a decade.
Many in the EAP field act as though EAP providers do not need financial incentives, as though goodwill and professionalism alone will drive initiatives to enhance quality. The blunt truth is that goodwill and professionalism are failing to elevate either quality or price of services.
The pricing problem
From the perspective of the purchaser/employer, EAP vendors are essentially interchangeable. The contents of one EAP proposal are basically the same as the next one. Vendors all have similar affiliate provider networks, call centres, promotional material, training manuals, online programs and work-life services. Thus, purchase decisions are naturally based on the lowest bid.
And why do prices remain low? Probably because a combination of fierce competition and an oversupply of EAP firms has caused many providers to submit unrealistically low bids. Some providers appear to have a strategy of recouping budgetary shortfalls by:
•selling employers a collateral product with a higher margin, such as coaching, training, or critical incident intervention;
•attempting to make up the difference by increasing market share; or
•tightly managing costs by providing fewer services within the capitated rate structure.
The latter strategy may be hidden from the employer, manifesting itself in the form of clients being steered toward less expensive telephone intervention (more on this later), stalling program promotions, inflating utilization, failing to train managers, and offering six counselling sessions but averaging one.
The quality problem
The current capitated pricing structures and incentives at work in the EAP field produce exactly what one should expect in terms of service quality. This includes:
•widespread failure to conform to quality standards;
•highly variable patterns of practice;
•an over-reliance on utilization rates and customer satisfaction surveys as primary measures of quality; and
•a climate where the field is acutely vulnerable to violations of business ethics.
The lack of uniformity in defining the duties and activities of EAP, along with the varied interpretations applied to its label, has caused consumers and employers to view EAPs as somewhat amorphous, lacking common definitions and consistently applied standards of quality.
Taking the phone too far
For an example of the consequences of this absence of standard, look no further than the increased use of Internet and telephone counselling.
Typically, EAP vendors use a telephone call-centre as a “central” access point for service requests.
A “decentralized” network of subcontracted, professional clinicians provide the face-to-face counselling in locations where the EAP vendor has covered employees.
Thus, employees who request assistance with a personal problem go through a process that’s similar to making a hotel reservation, except they may be encouraged to disclose some information about their personal situation and concerns. They place a call and provide information to a “phone counsellor,” who triages the client to determine whether tele-counselling is appropriate, or if the client should be transferred to a subcontracted clinician in or near their community for a face-to-face appointment.
A similar process may exist for online or e-mail requests for service.
There is no question that tele-counselling plays a critical and necessary function when viewed as a vehicle for triaging cases, co-ordinating interventions, following up with clients and perhaps even handling certain types of mild cases. But increasingly, tele-counselling is being used as a “stand-alone,” primary counselling modality.
This form of counselling should not be blindly accepted as legitimate, except in instances where clients have very mild symptoms, and are motivated, resourceful and largely positive about self-help.
The absence of the personal connection that occurs in a face-to-face visit is an unquantifiable loss. A counselling session using asynchronous e-mail will not reveal nonverbal communication — gestures, facial expressions, appearances, and body language.
An employee may present with work-related stress, but without the means to ascertain whether the employee makes eye contact, displays behavioral tics or tremors, or smells of alcohol, a counsellor working on the phone or online would not be able to truly assess a primary problem of alcoholism or mental illness.
Instead, that telephone or online counsellor would be inclined to offer benign but ineffective “advice” related to job stress, followed by a referral to a website with educational resources. It is very difficult to truly understand the nature and severity of the problem, as well as assess the employee’s attitude and motivations, when strictly relying on tele-counselling. Most physicians will not diagnose or evaluate new patients over the phone or e-mail.
Why should an EAP assessment, arguably equally invested in direct observations, be satisfied with a lower standard of care?
The business case for quality and higher rates
EAPs are adopted and maintained by many organizations out of a widely held perception that they yield positive results. Despite this perception, empirically validated, published research on EAP effectiveness has not convincingly documented the gains to organizations.
A good deal of proprietary research may shed light on what particular organizations gain in terms of expense reduction and risk management. But most of these proprietary studies tend to have major design problems. They are used to persuade decision-makers that particular EAP vendors can contribute to an organization's productivity.
Noticeably absent are studies across different organizations and EAP models that assess the direct effects of EAP on the bottom line (such as absenteeism, decreased medical or disability claims, increased productivity, reduced turnover).
Since statistical proof that EAPs positively impact workplace productivity variables is unavailable or not easily obtained, employers tend to analyse utilization rates as the most typical measure of performance (that is, the number of cases divided by the number of eligible employees). Logic dictates that if employees, dependents, or managers do not take advantage of EAP services, the program is essentially irrelevant.
However, utilization rates are routinely submitted to HR and benefits purchasers without any indication as to how they were derived. The field has a long history of reporting inflated utilization via “creative number crunching,” driven by the vendor’s need for account retention.
Common methods to create misleading utilization include counting information-only telephone calls, counting web hits, mixing previously opened cases and counting employees who participate in a training or orientation session.
HR and benefit managers looking at utilization rates to evaluate potential vendors need to understand that variations in utilization rates between different vendors may reflect differences in calculation methods, rather than differences in the actual performance of the EAP.
The only way to make a more robust business case for a quality EAP is through educating employers. They need to know what a good quality EAP looks like, what to ask for that they may not be receiving, and why these missing components cost more to effectively deliver.
But the EAP industry is caught in a Catch-22, one that begins and ends with whether employers invest in quality.
The quality of EAPs is unlikely to change unless the industry changes its reimbursement structures. But reimbursement structures and unlikely to change unless employers are convinced that quality problems in EAP exist. Thus, EAP providers have to collectively create an infrastructure to define and improve quality. And employers have to be prepared to reward quality.
David Sharar is managing director of Chestnut Global Partners, a Bloomington, Ill.-based international provider of employee assistance services. He may be reached at (309) 820-3570 or [email protected].
That’s because the predominant payment mechanism of capitation — that is, per-employee-per-month — seems to encourage, even reward, reduced levels of service.
EAP vendors with superior methods, under the capitation system, can’t bill the superior alternative to anyone in particular. As a result, ordinary, or even marginal, service receives the same rate as optimal services.
In the United States, rates for employer-sponsored health care have registered double-digit increases for each of the last three years. Prices for EAPs, however, have stagnated for over a decade.
Many in the EAP field act as though EAP providers do not need financial incentives, as though goodwill and professionalism alone will drive initiatives to enhance quality. The blunt truth is that goodwill and professionalism are failing to elevate either quality or price of services.
The pricing problem
From the perspective of the purchaser/employer, EAP vendors are essentially interchangeable. The contents of one EAP proposal are basically the same as the next one. Vendors all have similar affiliate provider networks, call centres, promotional material, training manuals, online programs and work-life services. Thus, purchase decisions are naturally based on the lowest bid.
And why do prices remain low? Probably because a combination of fierce competition and an oversupply of EAP firms has caused many providers to submit unrealistically low bids. Some providers appear to have a strategy of recouping budgetary shortfalls by:
•selling employers a collateral product with a higher margin, such as coaching, training, or critical incident intervention;
•attempting to make up the difference by increasing market share; or
•tightly managing costs by providing fewer services within the capitated rate structure.
The latter strategy may be hidden from the employer, manifesting itself in the form of clients being steered toward less expensive telephone intervention (more on this later), stalling program promotions, inflating utilization, failing to train managers, and offering six counselling sessions but averaging one.
The quality problem
The current capitated pricing structures and incentives at work in the EAP field produce exactly what one should expect in terms of service quality. This includes:
•widespread failure to conform to quality standards;
•highly variable patterns of practice;
•an over-reliance on utilization rates and customer satisfaction surveys as primary measures of quality; and
•a climate where the field is acutely vulnerable to violations of business ethics.
The lack of uniformity in defining the duties and activities of EAP, along with the varied interpretations applied to its label, has caused consumers and employers to view EAPs as somewhat amorphous, lacking common definitions and consistently applied standards of quality.
Taking the phone too far
For an example of the consequences of this absence of standard, look no further than the increased use of Internet and telephone counselling.
Typically, EAP vendors use a telephone call-centre as a “central” access point for service requests.
A “decentralized” network of subcontracted, professional clinicians provide the face-to-face counselling in locations where the EAP vendor has covered employees.
Thus, employees who request assistance with a personal problem go through a process that’s similar to making a hotel reservation, except they may be encouraged to disclose some information about their personal situation and concerns. They place a call and provide information to a “phone counsellor,” who triages the client to determine whether tele-counselling is appropriate, or if the client should be transferred to a subcontracted clinician in or near their community for a face-to-face appointment.
A similar process may exist for online or e-mail requests for service.
There is no question that tele-counselling plays a critical and necessary function when viewed as a vehicle for triaging cases, co-ordinating interventions, following up with clients and perhaps even handling certain types of mild cases. But increasingly, tele-counselling is being used as a “stand-alone,” primary counselling modality.
This form of counselling should not be blindly accepted as legitimate, except in instances where clients have very mild symptoms, and are motivated, resourceful and largely positive about self-help.
The absence of the personal connection that occurs in a face-to-face visit is an unquantifiable loss. A counselling session using asynchronous e-mail will not reveal nonverbal communication — gestures, facial expressions, appearances, and body language.
An employee may present with work-related stress, but without the means to ascertain whether the employee makes eye contact, displays behavioral tics or tremors, or smells of alcohol, a counsellor working on the phone or online would not be able to truly assess a primary problem of alcoholism or mental illness.
Instead, that telephone or online counsellor would be inclined to offer benign but ineffective “advice” related to job stress, followed by a referral to a website with educational resources. It is very difficult to truly understand the nature and severity of the problem, as well as assess the employee’s attitude and motivations, when strictly relying on tele-counselling. Most physicians will not diagnose or evaluate new patients over the phone or e-mail.
Why should an EAP assessment, arguably equally invested in direct observations, be satisfied with a lower standard of care?
The business case for quality and higher rates
EAPs are adopted and maintained by many organizations out of a widely held perception that they yield positive results. Despite this perception, empirically validated, published research on EAP effectiveness has not convincingly documented the gains to organizations.
A good deal of proprietary research may shed light on what particular organizations gain in terms of expense reduction and risk management. But most of these proprietary studies tend to have major design problems. They are used to persuade decision-makers that particular EAP vendors can contribute to an organization's productivity.
Noticeably absent are studies across different organizations and EAP models that assess the direct effects of EAP on the bottom line (such as absenteeism, decreased medical or disability claims, increased productivity, reduced turnover).
Since statistical proof that EAPs positively impact workplace productivity variables is unavailable or not easily obtained, employers tend to analyse utilization rates as the most typical measure of performance (that is, the number of cases divided by the number of eligible employees). Logic dictates that if employees, dependents, or managers do not take advantage of EAP services, the program is essentially irrelevant.
However, utilization rates are routinely submitted to HR and benefits purchasers without any indication as to how they were derived. The field has a long history of reporting inflated utilization via “creative number crunching,” driven by the vendor’s need for account retention.
Common methods to create misleading utilization include counting information-only telephone calls, counting web hits, mixing previously opened cases and counting employees who participate in a training or orientation session.
HR and benefit managers looking at utilization rates to evaluate potential vendors need to understand that variations in utilization rates between different vendors may reflect differences in calculation methods, rather than differences in the actual performance of the EAP.
The only way to make a more robust business case for a quality EAP is through educating employers. They need to know what a good quality EAP looks like, what to ask for that they may not be receiving, and why these missing components cost more to effectively deliver.
But the EAP industry is caught in a Catch-22, one that begins and ends with whether employers invest in quality.
The quality of EAPs is unlikely to change unless the industry changes its reimbursement structures. But reimbursement structures and unlikely to change unless employers are convinced that quality problems in EAP exist. Thus, EAP providers have to collectively create an infrastructure to define and improve quality. And employers have to be prepared to reward quality.
David Sharar is managing director of Chestnut Global Partners, a Bloomington, Ill.-based international provider of employee assistance services. He may be reached at (309) 820-3570 or [email protected].
