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Why wellness programs fail.

Too many wellness programs get derailed because companies fail to link them with other benefits and business strategies. Learn how you can avoid making costly mistakes with your plan.

A chemical company discontinues its wellness program when its profits start dropping, reasoning that this "ancillary" benefit is excess overhead. A financial-services firm invests in a costly fitness center; meanwhile, its maternity and cancer costs continue to rise unabated. A consumer-products corporation gives up trying to implement a nationwide wellness program for its operating units, leaving them to operate independent programs of varying quality on their own.

At first blush, wellness programs are a good-news proposition. They help control health-care costs by encouraging employees and their families to adopt healthy lifestyles and detect, prevent and manage illnesses. Health-promotion programs are also great morale boosters they're the undisputed feel-good part of employee-benefits and human-resources programs. Surveys demonstrate that these programs, rumors of their premature demise to the contrary, have grown in number and are increasingly part of the managed-care landscape.

Despite this good news, Corporate America still hasn't ironed out the kinks in its wellness programs. For every program that exists, at least one was begun and abandoned, or else it never got off the ground. Yet many of these programs could have been rescued and put back on track with some practical solutions. Here's what you can do to avoid making the same mistakes with your wellness plan.

First, don't think of your wellness plan as an extraneous benefit that has nothing to do with your company's performance. Wellness programs are still largely unconnected to health-plan strategic planning, design, communications and open enrollment, even though the top 10 causes of death in the United States are related to lifestyle or personal behavior. Benefits managers often view these plans as frills or "gyms for jocks," professing they'll turn their attention to wellness once they solve their medical plans' "real" problems.

As a result, they miss many opportunities to integrate wellness programs into overall strategic-benefits and human-resources planning. Plus, senior management is often reluctant to invest in evaluating wellness programs' impact, which helps perpetuate unrealistic savings expectations. The result is an approach that focuses almost exclusively on sick care instead of well care, and this is true of both indemnity and managed-care plans.


To overcome these stereotypes, you need some ammunition. Too many executives incorrectly assume the benefits of wellness plans aren't measurable. In fact, numerous cost-impact studies on wellness have been published within the last few years. Many of them demonstrate a return of $2 to $6 for every dollar invested in a work-site wellness program. Make evaluation a priority in your own organization, basing your analysis on written program goals and objectives. That lets you see where you should focus your efforts.

What's the best way to integrate wellness with your other benefits? A growing number of employers do this by reimbursing employees for selected preventive procedures, such as mammograms, flu shots, stress tests and blood-pressure screening. More important, they're basing eligibility for reimbursement on age, gender and risk profile. So these aren't traditional one-size-fits-all wellness or physical-exam benefits. Rather, they're targeted benefits whose coverage criteria derive from studies on cost and health impact.

If it isn't financially feasible for your company to commission a major cost-benefit study, consider banding together with some businesses for more buying power. For example, the Bay Area Business Group on Health in San Francisco is a coalition of corporations that enlisted researchers from academia to evaluate their employee demographics and target their problem areas.

Another option is using risk rating for health risks, such as requiring higher contributions from employees who smoke. But note that risk rating can backfire if you don't carefully consider the potential employee-relations fallout, not to mention the possibility of inadvertently violating the Americans with Disabilities Act. Suppose you want to discourage unhealthy behaviors by imposing benefits penalties for employees with substance-abuse problems or obesity. It might work, but the catch is that substance abuse is considered a disability under the ADA, and obesity can be considered a disability if it impedes an employee's ability to work or conduct other activities of daily living.

Instead, you might be better off sponsoring educational programs to help employees and their families more effectively manage their own care and navigate their way through the health-care delivery system. Telephone-based patient-advocate programs allow employees and their dependents to call an 800 number and get health or medical-plan information from a nurse 24 hours a day. Most major utilization-management companies can set up these programs for you, or, if your company has an on-site medical center, you might be able to use some of the center's resources to offer a similar service.

Many employers also incorporate self-care materials into their medical-plan enrollment kits. These materials are like a troubleshooter's guide, providing information on what types of tests employees should do themselves, such as breast, testicular or mole self-examinations, and when they should do them. Self-care guides also outline which symptoms are probably benign and which ones require medical attention. These guides save money because employees who see any early signs of disease are likely to seek medical attention promptly, increasing the chances of treating the problem successfully.

Encourage your health-care providers, especially managed-care vendors, to offer health-promotion programs and to establish and achieve health-screening standards. You may even want to require a health-plan scorecard as a condition of obtaining or retaining business. These scorecards, in which providers outline items like patient satisfaction, preventive-screening measures, immunization rates and re-admission rates for substance abusers, have sprung up in the last few years as employers began seeking information on the quality of care, as well as data on the types of services provided and to which employee populations. During open enrollment, you can share the scorecard information with employees to help them make the right choices.

Not only is wellness as a concept spreading to managed-care providers, it's now leaving its corporate isolation chamber by playing a bigger role in disability management and organizational development. Companies have begun to link wellness more closely to employees' jobs by melding stress-management workshops with management training and combining wellness programs with safety education. Work/family and employee-assistance programs also make good vehicles for wellness concepts.


To ensure you get the most bang for your buck, it's important to target high-dollar diagnoses like diabetes, high blood pressure and musculoskeletal (sprains, strains and fractures) costs through special education programs. Many employers still make the mistake of trying to cover the waterfront by providing every conceivable program. Or they put in limited programs that don't address the real problems or problem populations. For example, many don't include families, although dependents incur the majority of medical claims. Other wellness programs preach to the choir by attracting already-healthy employees to participate, or they only offer exercise classes or facilities.

However, employers are starting to recognize the need to expand wellness beyond the traditional exercise-smoking-weight-stress quartet to broader health-care issues. Early wellness programs often had rigid, one-size-fits-all menus, but companies are scrapping these for programs that better suit both their employees' health needs and their corporate objectives.

One manufacturing company analyzed its 1994 paid medical costs and found that $2.6 million of its $6 million total costs were due to lifestyle behaviors like lack of exercise and smoking. The musculoskeletal/safety category of claims was the most expensive; the company paid more than $800,000 in benefits for lower-back pain that year. So senior management began a back-pain prevention program. What's more, the company's risk manager, who'd seen workers' compensation claims for back problems skyrocket, decided to co-sponsor the program.

Getting the right employees to show up is a big part of designing wellness programs that solve the right problems. One company developed a special incentive: a "wall of fame" for employees who reached their health goals. Every month a different employee was named health star of the month, usually someone who had several health problems to overcome - not a 22-year-old athlete. The person's photo, a brief biography and a description of how he'd reached his health goals were posted on a special bulletin board.

But while you should reward employees who make personal health strides, the converse isn't true. Don't take an overly clinical approach or punish employees financially for failing to accomplish wellness objectives. Companies often identify high-cost claims and then share information on health risks with employees, expecting them to change their health habits on their own and sometimes imposing stiff penalties if they can't.

These tactics often turn off employees. Motivating employees, not punishing them, is the key to a successful wellness program. You do need to analyze your data so you can understand what the biggest problems are, but then take the next step and help your employees make and maintain healthy lifestyle changes. And don't just address the symptoms. For example, smoking-cessation programs should focus on helping employees understand what triggers the urge to smoke in addition to warning them of the dangers of smoking. A nurse, exercise physiologist or other health professional should coordinate the personal goal-setting process, which should balance employees' schedules, work/family demands and personal preferences.


If you don't have a big budget for wellness, or if your company has cut back in this area, you still have plenty of options for developing a healthy workforce. Consider diverting part of the proceeds from risk-rating initiatives to fund behavior-change programs. Or you can incorporate health mini-seminars into your company's exercise classes.

Another inexpensive idea is dedicating some space to displaying health literature. You can often get brochures for little or no cost from not-for-profit organizations like the American Red Cross and the American Heart Association. Such organizations often have group programs designed for the workplace on topics like nutrition or heart disease. If you subsidize the program, you can hold back part of the subsidy until the employee successfully completes the program.

To save time and money in the communications area, try dovetailing wellness communications with other benefits or overall communications. Reminders asking employees to get their blood pressure checked, for example, can appear on their benefits statements. But these positive efforts won't work without a supportive work environment - things like healthy food choices in the cafeteria, smoking policies and stress-management programs that address organizational changes like layoffs.

Last, and certainly not least, the best-laid health-promotion plans can fail because of management and logistical challenges. Programs can falter after a spectacular beginning, because they're "ad-hocracies" that reflect an unsystematic, spur-of-the-moment approach, because funding and staffing are inadequate or because employees are spread throughout many states and operating units.

Employers faced with these challenges can increase their programs' chances of success with some simple principles. Set a few annual written, realistic goals that you communicate company wide. And start small, testing one program or one location at a time. One way to support field locations is to negotiate voluntary group purchasing arrangements with nationally recognized health-promotion providers. You can also supplement staffing and save money by using employee committees that represent rank-and-file employees, field locations or functions like the benefits, safety, human-resources and disability areas.

Student interns are another low-cost option. They can evaluate programs and do follow-up questionnaires with employees. Or you could have a graduate student do a project, like developing and teaching a one-month course in nutrition once a week at lunchtime.

Finally, establish companywide guidelines that set up a flexible, high-quality framework for every division of the company. These guidelines can address consistent data collection, health-risk appraisals, program communications and vendor selection.

So if your wellness program isn't giving you the results you want, don't just scrap it without examining the underlying problems. Once you pinpoint what your company and employees need from the program, you can make it more effective, probably with some fairly minor changes. The key is taking the same analytical, big-picture approach you use to keep overall health-plan costs in line and applying it to your wellness plan. If you do that, your wellness program will truly pull its own weight - and then some.


Like many companies with rising health-care costs, J&J uses wellness programs to save money. But it took a different tack from other companies, which typically have one wellness program for the entire organization. Back in 1979, when J&J first launched its program, the parent company bore the up-front costs of development (most of which was a multimillion-dollar cost-benefit study), but then it went to its confederation of operating companies and "sold" the program to each company. The cost was $225 per employee (now it's about $150), and J&J allowed each company to tailor wellness services to its own employee needs.

Today, J&J still believes "wellness is like any other product - you have to continually repackage and reposition it," says Ron Z. Goetzel, vice president of assessment, data analysis and evaluation services. J&J uses an expert system to reach high-risk populations and conduct mailings to encourage those employees to participate. Because only J&J's internal health-management program, which administers wellness services, has access to the medical records, employees are assured of confidentiality.

J&J also makes its wellness communications interactive, so employees must respond in some way to the information they receive. And then there's always the "carrot" approach - employees get gifts and cash incentives for participating in certain programs.

As the next step in "marketing" its health-management program, J&J is teaming up with managed-care providers to share its experience and technology "to develop an even more effective spectrum of services," Goetzel notes. He believes employer alliances with managed-care providers are a growing trend in the wellness area and envisions the two groups working together "to decide whether to deliver these programs in clinical settings or at the work site."

Ms. Lewis is a consultant at Kwasha Lipton in Fort Lee, N.J.
COPYRIGHT 1995 Financial Executives International
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1995, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Title Annotation:Employee Benefits; includes related article
Author:Lewis, Deborah
Publication:Financial Executive
Date:Mar 1, 1995
Previous Article:Wellness on tap at Coors.
Next Article:In the shadow of ERISA.

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