Here's to your health: insurers are working with employers to provide wellness programs in hopes of creating healthier and more productive employees.

Key Points

* In addition to creating healthier and more productive employees, wellness programs can help curb rising health-care costs.

* Of 960 large national employers participating in a 2003 Hewitt Associates survey, 95% offered some kind of health promotion program.

* Wellness programs span the gamut from local gym membership discounts to on-site natatoriums, and company-sponsored walk-a-thons to on-site massages.

When Dr. Barbara Ryan, president and chief executive officer of software developer Minitab Inc., learned from her physician that she needed to exercise, she was less than enthusiastic. But after a few fitness classes, she realized not only that the lifestyle modification would have a positive impact on her life but also that such programs would be an effective way of creating healthier and more productive lifestyles for her employees.

Now the State College, Pa.-based corporation is offering its 200-member staff a host of health and wellness programs--everything from on-site yoga classes to one-on-one nutritional counseling. And the company's not alone. Employers of all sizes are recognizing the importance of changing employees' sedentary lifestyles and making health promotion and wellness programs part of their benefit offerings.

"There's been a recent resurgence in health and wellness,' said David Steurer, director of membership for the Wellness Councils of America, a national nonprofit organization dedicated to promoting healthier lifestyles for Americans through health promotion initiatives at the work site. A recent survey by the International Foundation of Employee Benefit Plans said that nearly two-thirds of employers offer some type of wellness program. Health and wellness programs date back to the 1970s when some companies implemented exercise programs to keep top executives fit. While health and wellness programs gained popularity in the late 1980s during the Clinton administration, the momentum slowed during the following decade. Now more employers--many hand-in-hand with their health plans--are implementing programs and recognizing that they're not only improving the health of their staffs and increasing employee productivity, but also taking a bite out of rising health-care costs, Steurer said.

Attacking Costs

While solutions such as redesigning benefits packages and sharing more costs with employees are driving down costs for some employers, Steurer said for others, wellness initiatives are turning out to be an even more effective way to lower claims costs.

"One or two years ago employers were very interested in the disease management area and assisting those with chronic conditions, but that's now shifting to where they want to get ahead of the curve and help individuals make wiser decisions about their health care and help before risk factors turn into high-cost health-care issues" said Camille Haltom, national practice leader for managed health for global human-resources outsourcing and consulting company Hewitt Associates.

It's never too late to get into the game, said Steurer. "The good news is that regardless of age or circumstance, if you start eating right and become more active and appropriately interact with the health-care system to manage problems, then some costs can be contained."

In a recent Principal Financial Well-Being Index, about 57% of workers surveyed said wellness benefits are very or somewhat successful in reducing health-care costs. The savings, 55% believe, benefit themselves and their families.

Fitness in Motion

Health promotion and wellness initiatives have come a long way from health fairs that were once the main--and sometimes only--offerings by employers. Now programs span the gamut from local gym membership discounts to on-site natatoriums, and company-sponsored walk-a-thons to on-site massages.

Some companies are extending beyond traditional approaches. A growing number of employers are re-evaluating nutritional options such as cafeteria and vending machine offerings, offering flexible time schedules so employees can take advantage of programs, creating on-site fitness facilities and classes, and hosting guest lecturers to address various wellness-related topics, as well as encouraging employees' spouses and dependents to join programs.

The first step in the quest for good health is identifying employees' risk factors to determine a course of action. For many employers, the answer lies in health risk assessments. In fact, many health plans now administer and/or analyze data from the assessments. Using either paper-based or online tools, employees complete questionnaires about their general health, lifestyle and family history. Information is then entered into a system and analyzed, and a report is generated to assess health concerns and risk factors. "If a significant portion of the population takes the assessments, it can give employers information about a significant percent of their population that isn't generating a lot of cost today but may have risk factors and may repopulate that high-cost group tomorrow," said Hewitt's Haltom.

For some individuals, health risk assessments are the wake-up call they need, said Todd Hershbine, human resources manager for Minitab. Each year, Minitab's insurer, High-mark Blue Shield, brings its Blue Bus of trained professionals to Minitab's headquarters to evaluate the health of its employees. The bus is High-mark's mobile health education and wellness facility, created in 1992, to serve members across central Pennsylvania. Individuals receive blood pressure, cholesterol, thyroid function and other screenings. "We've had 25-year-olds who didn't realize their cholesterol was high or others who didn't realize the level of stress they faced daily. From their health assessment, we can then begin to design programs to address these issues," Hershbine said.

An online health risk assessment is the first step in Aetna Inc.'s "Simple Steps to a Healthier Life"--a user-friendly, personalized online wellness program. Members receive a tailored summary that recommends a personalized action plan of lifestyle modifications based on their unique health profile. Such modifications may include increasing physical activity, improving diet, reducing stress and addressing emotional health issues, said Barbara Pelletier, head of e-health delivery. Later this year, Aetna, which has had a long-standing commitment to wellness and prevention programs over the years, plans on rolling out several new modules, including migraine and back pain management, she said.

Getting In on the Action

Humana Inc. recently partnered with global consumer brand Virgin in its quest to change members' sedentary lifestyles. The program--a Virgin-branded and Humana-administered individual health insurance product tied to Virgin's health and fitness reward program--provides a variety of offerings, such as its Health Miles program in which members are rewarded for participation in health programs through a collection of points. Points are translated into "cash," which can then be redeemed for gift cards from a number of retailers networked with Virgin, including Home Depot, Target and Best Buy. Health Miles is also available to Humana's employer groups. Through Virgin's LifeZone Web site, employees can choose from one of two health perks--a discounted health club membership or a pedometer. Information is then downloaded into a personal file on the Web site. Virgin's Health Zone offers members the convenience of checking weight, blood pressure, percent body fat and other screenings via computerized kiosks located at participating fitness clubs and employer sites.

Some health plans are analyzing claims activity to target members who can benefit from lifestyle modifications. Highmark relies on a software methodology to analyze claims to understand conditions prevalent in given populations and to calculate risk scores to understand intensity and current and future cost of services. "Someone with a knee injury who needs surgery won't likely generate long-term costs, but a poorly controlled diabetic with failing kidneys will likely produce significant claims going forward," said Dr. Robert Muscalus, medical director for the health plan. "We can sit down with a company and tell them what to look for today and in the future, based on gender, age and medical conditions of various populations. That opens the door for greater education based on populations, particularly because different employer groups have different characteristics." Highmark reviews one year of data to help companies better understand dollars spent on health care, conditions associated with those dollars, drug detail correlations and opportunities to better manage risks, he said.

Some health plans are making wellness and prevention a priority for their own employees. For instance, in 2004, Highmark opened its Employee Wellness Center. Since then, more than 3,400 employees have benefited from the fitness center's cardiovascular equipment, nutrition counseling, personal trainers and exercise classes. The results include reduced stress, increased productivity and improvement in overall health, said Muscalus.

Encouraging Results

The momentum for wellness continues to grow. In the Principal Financial Well-Being Index, 81% of employees said they're participating in on-site blood pressure checks, 73% in cholesterol screenings and 72% in online health screenings. More than three-fourths of employees offered health education tools said they use them, while 68% attend wellness seminars.

But not everyone is ready to make the leap.

"One of the biggest challenges employers face is getting people to participate," said WELCOA's Steurer. The answer often lies in a "carrot and stick" approach to drive participation, he said.

"Incentives are very important because whether it's carrots or sticks, people need to understand how important it is for their health and well being, and for their families, to pursue a healthy lifestyle," Steurer said. "And it's important for employers in terms of continuing to be able to offer benefits."

Employer incentives range from token incentives such as company mugs to national retailers' gift cards to several hundred dollars in "credit" to be applied to an employee's healthcare contributions. But financial incentives often carry the most weight, said Hewitt's Haltom.

Financial incentives are having a positive impact on Blue Cross Blue Shield of Massachusetts members. Last year, 10,000 of the Blues plan's members got paid for signing up with its work-site wellness programs, including its Blue Ribbon Personal Edge program that provides financial incentives to employees who participate in key components of the MyBlueHealth wellness online activities. Personal Edge provides such rewards as a $25 gift certificate to a choice of nearly 400 stores throughout the United States to employees who complete a confidential personal health assessment, and employees' names are entered into a drawing for $100 gift certificates for completing behavior change modules such as nutrition, fitness and stress management.

Incentives can come in the form of benefits. Some employers offer health insurance premium discounts as participation rewards, while others offer personal time off or additional life insurance as program incentives. According to a recent article in the Benefit Broker Journal, statistics show that employers can get 90% participation with medical exams if the exam requirement is tied to a reduction in the employee's contributions.

Slightly less than halt" of employers in a 2003 Hewitt Associates survey said they offer a financial incentive program. Ninety-five percent of employers of the 960 large national employers surveyed cited offering some kind of health promotion program.

But incentives aren't the answer for everyone. Hershbine said Minitab steers clear of incentives. "If a healthy body and mind and the ability to live longer with a better quality of life aren't enough incentive, then there's no amount of T-shirts and cups that we could provide that will create a lifestyle change." Currently, more than 80% of Minitab's employees participate in some type of employer-sponsored wellness program.

The federal government also is joining the effort. Proposed regulations for the Health Insurance Portability and Accountability Act of 1996 provide guidance that enables employer-sponsored wellness programs to aggressively promote and reward healthy behaviors using significant financial incentives. The act includes provisions to prohibit a medical plan from discriminating in eligibility or premiums based on health factors of individuals, but wellness incentives are allowed. The provisions also provide specific situations in which it's permissible to provide discounts, rebates or modifications to applicable copayments or deductibles in return for adherence to health-promotion and disease-prevention programs.

Staying Healthy

Employers and employees likely will continue to embrace wellness programs. "The future couldn't be brighter for wellness," said Aetna's Pelletier. She said the programs will play a strong role in health benefits strategies for some employers. "Based on our research, 85% of companies don't want to be totally focused on price and decisions made yearly, but want to become more strategic and focused on value. In the next several years, health and wellness will likely play a critical role in that strategic approach."

Companies also may begin reaching out more to sectors not yet making a commitment to employee wellness. Industries with high turnover, such as retail and fast food, are less likely to implement programs. The good news, however, is that small and midsized employers in various industries are starting to jump on board, Pelletier said.

But it takes several ingredients to create an effective program, said Dr. David Johnson, regional medical director for Premera Blue Cross. "Success involves four key factors: senior management buy-in, incentives, communication and marketing, and, depending on the situation, local champions." However, in many cases, employers don't have all four factors, so it's important to get as many as possible. Also, he said, companies must assure employees of confidentiality of information. "One of the biggest issues people have is that their information will be shared with others, including their employers." Premera, as an example, uses a third party to handle its data and health risk-assessment information, Johnson said. However, individual information is not made available to employers; instead only aggregate data is shared, which helps in selecting follow-up programs for employees.

Learn More

Aetna Health and Life Insurance Co.

A.M. Best Company # 08189

Distribution: Brokers, consultants, retail network (pharmacy products)

Blue Cross and Blue Shield of Massachusetts

A.M. Best Company # 64562

Distribution: Brokers, consultants, exclusive sales force, direct

Highmark Blue Cross and Blue Shield

A.M. Best Company # 64010

Distribution: Captive sales force, brokers, direct

Humana Health Plan Inc.

A.M. Best Company # 68898

Distribution: Agent/brokers, direct to employees, direct

Premera Blue Cross

A.M. Best Company # 60076, 64764

Distribution: Agents and brokers

For ratings and other financial strength information about these companies, visit www.ambest.com.

RELATED ARTICLE: A measurable difference.

Investing $100 to $150 per employee, per year, in work-site health promotion can generate a return on investment of $300 to $450, Ron Goetzel, director of the Cornell University Institute for Health and Productivity Studies and vice president of consulting, said in an interview posted on the Wellness Councils of America Web site.

That's on par with various studies that estimate the average ROI from health promotion is $2 to $3 for every $1 invested.

Camille Haltom, national practice leader for managed health for global human-resource outsourcing and consulting company Hewitt Associates, said more employers are now measuring the impact of wellness initiatives. Haltom said companies shouldn't expect to see financial results before 18 months of working with claims to gauge an accurate measurement of ROI. "In addition, within the next two years, we'll likely see employers becoming more demanding of data and measurement to tell whether or not wellness is creating some positive financial impact," she said.

Some companies, however, said it's not about the ROI. "We didn't start our program to lower health-care costs, but instead wanted healthier employees, which in turn provides lower utilization," said Todd Hershbine, human resources manager for Minitab Inc., a software development company. Lower utilization is a direct result of lifestyle modifications. According to a recent WELCOA article on its Web site, 91% of all diabetes cases, 80% to 90% of all heart attacks and 30% to 70% of all cancers can be prevented completely through lifestyle changes.

Wellness programs also are saving employers dollars in other ways. "Everyone is worried about medical and pharmaceutical costs, but the real issue is lost productivity caused by absenteeism and presenteeism," said Dr. David Johnson, regional medical director for Premera Blue Cross. Unlike absenteeism when employees are physically absent from work, with presenteeism, employees are on the job but emotionally or physically not productive due to illness or other distractions. A recent study by the Cornell University Institute for Health and Productivity Studies found that up to 60% of employer health costs may come from presenteeism. Common conditions such as headaches, allergies and back pain impact on-the-job productivity losses. "Wellness programs provide employers the tools to change or control those problems," he said.