Health and productivity management: market opportunities for EAPs: by integrating with health and wellness and disease management programs, EAPs can offer employers a powerful workforce productivity tool.

Ask any employer today to name his or her most significant expense, and the answer inevitably will be, "Salaries and wages." Most important asset? "Our employees." Most pressing concerns? "Employee productivity and health care cost containment."

Employers probably have been seeking effective solutions to maximizing employee productivity since the building of the pyramids. In the United States, workforce productivity became a focus of employers during the industrial age. But productivity has never been a more central area of concern than it is today, with a global economy pressuring U.S. employers to get as much output as possible from each and every worker.

THE SATURATION POINT 

Focused efforts by U.S. employers to address workforce productivity issues date back to at least the early 1900s. Henry Ford, founder of the automotive manufacturing company that bears his name, may not have been the first U.S. employer to identify employee productivity as an essential ingredient in a successful business, but he was certainly a pioneer in introducing solutions. Though many questioned his sanity, Ford introduced novel concepts such as paying generous wages to attract and retain good workers. He also set high expectations for his workers, including maintaining sobriety and good health and embodying positive family values.

Ford considered his employees his greatest asset and invested substantially in them, gambling that his commitment to his workers' well-being would pay significant dividends in terms of increased production, revenue, and profits. The results of his decision speak for themselves. But despite Ford's positive return on workforce investment, it would be another 40 to 50 years before a productivity-focused workplace service, the employee assistance program, became formalized.

By the early 1960s, EAPs were becoming hugely popular and had begun spreading throughout the U.S. business community As the programs matured and the market for them became saturated, growth slowed. Typically, when this happens to a product, it is either replaced or its scope is expanded or refined.

For EAPs, the market solution has been expansion. In the latter half of the 20th century, EAPs expanded their services into managed behavioral health care, thereby shifting their focus partly to health care cost containment. With health care costs rising during much of the 1980s and 1990s, EAPs saw dramatic growth.

In the mid- and late 1990s, employees' lives grew more complex and the demands of balancing work and family became more arduous. Work-life programs emerged in response, and employers soon recognized the advantage of integrating them with traditional employee assistance services, thus presenting EAPs with another opportunity for significant growth.

Now that integrated EAP/MBH (managed behavioral health) and EAP/work-life products have matured and demand for them has reached the saturation point, the time is ripe to develop and market the next generation of workplace productivity services. Employers are anxious for new solutions to their age-old problem. But what is the next logical direction?

STRONG GROWTH PRODUCT

Over the past two decades, two products have emerged that have enjoyed substantial growth: health and wellness programs and disease management services. These products target productivity by seeking to help employees better manage their health through preventive measures (health and wellness initiatives) and through improved control of chronic illnesses (disease management programs).

Both types of initiatives have demonstrated sufficient return on investment to keep employers interested. A June 2005 survey of 365 companies by the Deloitte Center for Health Solutions revealed that 62 percent of the employers polled had implemented health and wellness programs, while another 33 percent were considering doing so (Snowbeck 2005). These findings reflect employers' growing understanding that healthy employees cost fewer health care dollars and are likely to be happier and more productive in the workplace.

Disease management programs are enjoying similar levels of popularity. According to the Employee Benefit News/Forrester Research 2005 Benefits Strategy and Technology Study, 45 percent of employers currently offer some kind of disease management benefit, while another 22 percent plan to provide such services by 2006 (Holmes 2005). Because the programs aim primarily to reduce complications associated with, and encourage greater self-management of, chronic conditions, employers can reap a substantial return on their investment: Disease management programs have achieved an ROI in the 2:1 range over the last five years (Shutan 2004).

Health and wellness programs vary in their offerings, but all aim to improve employees' well-being and their employers' bottom line. Following are services typically provided by health and wellness programs:

* Proactive health assessments to identify health risks and target them with effective solutions;

* Onsite fitness centers to encourage physical activity; and

* Information and coaching on weight management, smoking cessation, pre-and postnatal care, and stress management.

EAPs considering developing a health and productivity management portfolio may wish to offer services that help employers track indicators of productivity For example, employers today are particularly concerned about escalating absenteeism, but few organizations are effective at tracking absences. Making matters worse, Family and Medical Leave Act (FMLA) regulations have left employers confused and at risk of fines or litigation for misapplication of the law's provisions.

In response to these concerns, Ceridian recently released an absence tracking and management tool that provides management, coordination, and tracking of all kinds of employee absences, including FMLA, state leave laws, employer-authorized policies, and vacation/paid time off. It allows companies to identify absence drivers and deliver services such as employee assistance, health and wellness, and disease management programs to resolve them.

By incorporating this or a similar product into its toolkit, an EAP can both validate the other health and productivity services it offers while also providing a strong growth product in and of itself. According to a Watson Wyatt survey, the number of companies using leave administration programs increased from 25 percent in 1996 to 51 percent in 2001 (Starner 2005). In addition, 29 percent of survey participants plan to introduce such programs in the near future (Starner 2005).

A COHERENT, INTEGRATED RESOURCE

From a marketing standpoint, does it make sense to further stretch the boundaries of employee assistance and integrate health and wellness and disease management services with EAP services? Well, employers apparently think so, because they are asking for just that combination of products. I recently spoke with the vice president of benefits of a large employer who lamented that employees have become overwhelmed by all of the benefits options available to them. He described it as "white noise" whereby the maw different communications and promotions of helplines and wellness services cancel each other out, diminishing their utilization and, ultimately, their impact.

With employee assistance, work-life, health and wellness, and disease management programs combined into a single product, employees could take advantage of a coherent, integrated resource. With one call, an employee could be connected to the productivity services that best meet his/her needs. Psychosocial, wellness, and disease management coaches could work together to deliver more efficient, effective, and holistic care.

Ceridian has already launched just such a product, which is generating a great deal of interest from its customers and the market as a whole. Ceridian's Health and Productivity Management Program provides a continuum of integrated services designed to improve employee health, reduce absences and health claims, and increase productivity The program includes the following components:

* Tracking and administration of employee absences, including FMLA, paid time off, and casual absences, and an absence analysis tool that helps employers understand absence drivers and supports interventions to target them;

* A toll-free "Life Enhancement Line" that provides access to psychosocial, wellness, disease management, and disability management services;

* A health risk assessment that identifies those who can benefit from health enhancement services and offers several intervention options so employers can choose a solution that best meets their needs and interests;

* Employee group interventions such as health fairs, health screenings, and healthy lifestyle courses, all of which are delivered onsite;

* Organizational effectiveness interventions (such as assessments of organization culture and job functions) that are designed to create an environment that promotes health and wellness;

* Employee interventions--including life enhancement coaching, disease management coaching, disability management, and a 24/7 nurse hotline--for employees who self-refer or are identified through health risk analyses; and

* ROI analyses to help employers understand the impact of these productivity services. The analyses surface recommendations for program changes, thereby furthering program effectiveness.

To encourage participation in these programs, incentives ranging from reduced insurance co-pays to cash and prize giveaways are offered. Incentives also can be tied to employees' progress, such as achieving improved wellness.

AN OPPORTUNITY TO UPSELL

EAPs considering broadening their reach with a full-fledged health, disease, and productivity management product must first ask themselves whether to develop the new services internally or partner with other organizations. Because many vendors in the health and productivity arenas are well-established, and because these services are outside of EAPs' traditional expertise, it makes sense in many cases to partner with strong vendors. This also presents an opportunity to "upsell" EAP services through your new vendor partners.

EAPs considering this approach also should determine the benefits it offers for all key stakeholders. EAPs, for example, will have another opportunity to add new growth products to their portfolio that are consistent with their focus on health and productivity They will once again be latching themselves to new high-growth, high-return services.

What's in it for employers? They will enjoy efficient, holistic, integrated solutions to containing health care costs and improving productivity. Through a single vendor, they will have three of the most effective, employee-focused programs working harmoniously This will lead to higher employee utilization, increased effectiveness through coordinated interventions, and higher ROI.

The employee, meanwhile, will receive better care. The employee will have one service that provides an integrated set of tools and services to help the employee maximize his or her health, well-being, and personal productivity.

References

Holmes, B. 2005. "Disease Management Alive, Thriving: Two-Thirds of Employers to Offer Disability Disease Management." Employee Benefit News Online.

Panepento, P. 2004. "Employee Wellness Programs Pay Off in Productivity and Morale." The Chronicle of Philanthropy. June 24, p. D10.

Shutan, B. 2004. "The DM Rx: Disease Management Programs Producing Fast and Meaningful Outcomes, Impressive ROI." Employee Benefit News, 18 (13): 14.

Snowbeck, C. 2005. "A Healthy Bottom Line: Companies Push Wellness Programs." The Pittsburgh Post-Gazette. August 28, p. D5.

Starner, T. 2005. "Reduce Absence Using Web Technology" Human Resource Executive, 3 (2): 11-14.

Robert M. Kramer, Ph.D., and Shannon Rickert, M.S.

Robert Kramer is head of product management for Ceridian's EAP and health and productivity management products. He has more than 25 years' experience in the employee assistance and wellness industries and has held executive-level marketing and operations positions in major health care organizations, including Aetna and Magellan.

Shannon Rickert is a product manager for Ceridian's EAP products, In addition to her experience at Ceridian, she has worked in substance abuse facilities and child- and family-centered "wrap-around" programs.