Tag Archives: integrated benefits institute

New Wellness Scam: Value on Investment

What do you do if your entire industry has a negative ROI? If your industry and its lack of ROI have been skewered in the media? If even RAND, which is the most neutral, grownup organization in all of healthcare, now says your industry, wellness, produces no savings and no reduction in utilization of healthcare services? If your leadership group accidentally proved their own industry loses money for its customers? If, on this very site, Insurance Thought Leadership, your patron saint, Harvard professor Katherine Baicker, professes to have no interest in wellness any more, now that her work has been eviscerated?

What do you do if there is a proof that saving through wellness is impossible, and another proof that, even if savings were possible, there haven’t been any? If these proofs are backed with a $1 million reward for anyone who can disprove them?

Here’s what you do: You change the rules so ROI doesn’t matter any more.

The new mantra is “value on investment,” or VOI. The Willis Health and Productivity Survey published this week claims that 64% of employers do wellness for VOI – specifically, “employee morale” and “worksite productivity.” (The survey also mentions “workplace safety.” I guess the workplace is safer if no one is working because they are all out getting checkups.)

But the darnedest thing is, all the data shows that the best way to really get value on your investment is to cancel your “pry, poke, prod and punish” wellness program.

Employee Morale

Have you ever seen employees demand more blood tests? More Health Risk Assessments (HRAs)? More weigh-ins? Quite the opposite. This shouldn’t be a newsflash, but employees hate wellness programs, except for the part where they get to collect employers’ money. As a CEO myself (of Quizzify), I pride myself on our corporate culture. The last thing I would do is force my employees into a wellness program. It would destroy the camaraderie we’ve established.

Obviously, if employees liked wellness, you wouldn’t need large and growing incentives/penalties to get people to participate. Employees dislike wellness programs so much that collectively they’ve forfeited billions of dollars just to avoid these programs.

Anecdotes often speak more loudly than data, and employee morale anecdotes are easy to come by. Simply look at the “comments” on quite literally any article in the lay media involving wellness programs. It’s usually about 10-to-1 against wellness, with the “1” being someone who says: “Why should I pay for someone who’s fat?” or something similar. Or the positive comment comes from a wellness vendor or consultant. You know an industry is bogus when the only people who defend it are people who profit on it.

The weight-shaming involved in wellness programs is, of course, a huge fallacy. Among other things, except at both extremes, there is only a slight correlation between weight and health expense in the under-65 population — the problems associated with weight show up later, typically after people leave the workforce. Assuming major differences among employees would lead to underwriting every individual-marathoners who might get injured, women who might get pregnant, etc. Take the fallacy out, and there is nothing that the American public-left, right and center – is more unified on than detesting wellness.

Workplace Productivity

You’re already pulling people off the line to do the “pry, poke and prod” programs and send them for checkups that are more likely to harm employees than benefit them. So productivity takes a hit to begin with. Add to that the weight-shaming and ineffectiveness of corporate weight-loss programs.

Most importantly, it turns out – according to the Integrated Benefits Institute, a wellness industry association – that the major contributor to low productivity is depression:

chart

Maybe this is just me, but if I were running a company where workers were depressed, I probably wouldn’t try to address depression by implementing a program that workers were going to hate, which is sort of a “the beatings will continue until morale improves” approach to management. I’m just sayin’…

The other noteworthy observation? Anxiety has a big impact on productivity. Wellness programs pride themselves on how many diseases they find. This practice is called hyperdiagnosis. The goal is to scare as many employees as possible into thinking they’re sick. The C. Everett Koop-award-winning Nebraska state wellness program, for example, bragged about how it found that 40% of employees were at risk. However, the program didn’t do anything about the finding, and a year later only 161 employees in the entire state had reduced a risk factor. The vendor, Health Fitness Corporation, also bragged about all the cancer cases it found and all the lives it saved, until admitting the whole thing was made up.

Once again, it’s not clear how a wellness program would reduce anxiety and increase productivity. Or maybe I’m wrong. Maybe there’s nothing like being told you are at risk of dying to really focus you on clearing your inbox before you croak.

Conclusion

Pretending there is a VOI looks to be even sillier than pretending there is an ROI, because wellness neither increases morale nor improves productivity.

All of this brings us back to what we’ve been saying for years-especially on this site, which was willing to post our stuff long before it was popular to do so: Do wellness for your employees and not to them.

The latter doesn’t work no matter what initials you use. But if you want to improve morale and productivity, up your game for perks, subsidize healthier options for food and maybe even directly subsidize a portion of gym memberships. And maybe teach your employees how to spend their healthcare dollars more wisely. (Disclosure: That is the business we are in.)

What do you do if your entire industry has a negative ROI? If your industry and its lack of ROI have been skewered in the media? If even RAND, which is the most neutral, grownup organization in all of healthcare, now says your industry, wellness, produces no savings and no reduction in utilization of healthcare services? If your leadership group accidentally proved their own industry loses money for its customers? If, on this very site, Insurance Thought Leadership, your patron saint, Harvard professor Katherine Baicker, professes to have no interest in wellness any more, now that her work has been eviscerated?

What do you do if there is a proof that saving through wellness is impossible, and another proof that, even if savings were possible, there haven’t been any? If these proofs are backed with a $1 million reward for anyone who can disprove them?

Here’s what you do: You change the rules so ROI doesn’t matter any more.

The new mantra is “value on investment,” or VOI. The Willis Health and Productivity Survey published this week claims that 64% of employers do wellness for VOI – specifically, “employee morale” and “worksite productivity.” (The survey also mentions “workplace safety.” I guess the workplace is safer if no one is working because they are all out getting checkups.)

But the darnedest thing is, all the data shows that the best way to really get value on your investment is to cancel your “pry, poke, prod and punish” wellness program.

Employee Morale

Have you ever seen employees demand more blood tests? More Health Risk Assessments (HRAs)? More weigh-ins? Quite the opposite. This shouldn’t be a newsflash, but employees hate wellness programs, except for the part where they get to collect employers’ money. As a CEO myself (of Quizzify), I pride myself on our corporate culture. The last thing I would do is force my employees into a wellness program. It would destroy the camaraderie we’ve established.

Obviously, if employees liked wellness, you wouldn’t need large and growing incentives/penalties to get people to participate. Employees dislike wellness programs so much that collectively they’ve forfeited billions of dollars just to avoid these programs.

Anecdotes often speak more loudly than data, and employee morale anecdotes are easy to come by. Simply look at the “comments” on quite literally any article in the lay media involving wellness programs. It’s usually about 10-to-1 against wellness, with the “1” being someone who says: “Why should I pay for someone who’s fat?” or something similar. Or the positive comment comes from a wellness vendor or consultant. You know an industry is bogus when the only people who defend it are people who profit on it.

The weight-shaming involved in wellness programs is, of course, a huge fallacy. Among other things, except at both extremes, there is only a slight correlation between weight and health expense in the under-65 population — the problems associated with weight show up later, typically after people leave the workforce. Assuming major differences among employees would lead to underwriting every individual-marathoners who might get injured, women who might get pregnant, etc. Take the fallacy out, and there is nothing that the American public-left, right and center – is more unified on than detesting wellness.

Workplace Productivity

You’re already pulling people off the line to do the “pry, poke and prod” programs and send them for checkups that are more likely to harm employees than benefit them. So productivity takes a hit to begin with. Add to that the weight-shaming and ineffectiveness of corporate weight-loss programs.

Most importantly, it turns out – according to the Integrated Benefits Institute, a wellness industry association – that the major contributor to low productivity is depression:

chart

Maybe this is just me, but if I were running a company where workers were depressed, I probably wouldn’t try to address depression by implementing a program that workers were going to hate, which is sort of a “the beatings will continue until morale improves” approach to management. I’m just sayin’…

The other noteworthy observation? Anxiety has a big impact on productivity. Wellness programs pride themselves on how many diseases they find. This practice is called hyperdiagnosis. The goal is to scare as many employees as possible into thinking they’re sick. The C. Everett Koop-award-winning Nebraska state wellness program, for example, bragged about how it found that 40% of employees were at risk. However, the program didn’t do anything about the finding, and a year later only 161 employees in the entire state had reduced a risk factor. The vendor, Health Fitness Corporation, also bragged about all the cancer cases it found and all the lives it saved, until admitting the whole thing was made up.

Once again, it’s not clear how a wellness program would reduce anxiety and increase productivity. Or maybe I’m wrong. Maybe there’s nothing like being told you are at risk of dying to really focus you on clearing your inbox before you croak.

Conclusion

Pretending there is a VOI looks to be even sillier than pretending there is an ROI, because wellness neither increases morale nor improves productivity.

All of this brings us back to what we’ve been saying for years-especially on this site, which was willing to post our stuff long before it was popular to do so: Do wellness for your employees and not to them.

The latter doesn’t work no matter what initials you use. But if you want to improve morale and productivity, up your game for perks, subsidize healthier options for food and maybe even directly subsidize a portion of gym memberships. And maybe teach your employees how to spend their healthcare dollars more wisely. (Disclosure: That is the business we are in.)

Absence Management: Work Comp’s Future?

American employers will dispatch hundreds of staff members to an April gathering in Washington, DC, on corporate compliance issues. In all likelihood, hardly any CEOs in the workers’ comp industry are fluent in these issues, even though by the end of this decade they may change the direction of the workers’ comp businesses, separating the successful from the laggards.

A change for workers’ comp leaders hides in plain sight.  Claims have been declining in frequency by about 3.5% a year. It’s prudent to expect continued decline, as jobs become safer every year. Average claims costs, which used to bump up by more than 5% a year, aren’t growing beyond a few percent.

Meanwhile, the typical employer’s agendas of employee leave, disability management and wellness have been surging in scope and complexity. A few workers’ comp companies have already repositioned themselves to provide a broad array of solutions for these agendas.

Most workers’ comp CEOs appear to think these burgeoning workplace concerns have little to do with their company’s future. They may be right. Or they may be whistling past the graveyard.

Since the beginning of the Great Recession, demographic, technology and legal trends visible in recent decades began to accelerate in the direction of smaller work injury risk and larger non-occupational employee risks. Frank Neuhauser of the University of California at Berkeley estimated that for most workers it is more dangerous to drive to work than to be at work.

And notice the rise in employee leave benefits and the greater emphasis on wellness (despite deserved criticism of overselling that concept). Perhaps this is how Occupy Wall Street ends: not in a revolutionary bang, but a paid parental leave benefit and a worksite yoga studio.

The Disability Management Employer Coalition puts on the April conference as its annual problem-solving exercise for the Family and Medical Leave Act and Americans with Disabilities Act. In addition to these federal mandates, states and localities have been promulgating leave-related mandates by the dozens. In January, for instance, Tacoma, WA, enacted a law requiring employers to offer at least three days of paid sick leave come January 2015.

ClaimVantage, which sells absence management software, reports there are about 140 federal and state family leaves across the nation. When adding ancillary leaves like jury duty and blood donor leaves, the numbers rise to about 400. Paid family leave is gaining momentum to become a mandated benefit. The U.S. is the only high-earning country that does not offer paid leave after the birth of a child and only one of eight countries in the world that doesn’t mandate paid leave for new mothers.

According to the Integrated Benefits Institute, workers’ comp accounts for a mere 11% of all work absences involving a medical condition.

Legally mandated and voluntary benefits, disability accommodation, wellness and other employee-centric programs have by intertwining themselves raised their visibility in corporate C-Suites. No single, memorable descriptor today captures them successfully. Phrases such as “health and productivity management” and “total health” are bandied about. I suggest a simple term, “absence management,” in a report I wrote called “Seismic Shifts: An Essential Guide for Practitioners and CEOs in Workers’ Comp,” which WorkCompCentral published in February.

The absence business beckons

Although the labels will evolve, the need of employers for expert outside assistance to address their agendas is bound to grow. Will workers’ comp companies deliver solutions?

The employers most ready to ask for help include those with relatively large workers’ comp costs to begin with: middle- to large-sized employers. Workers’ comp claims payers today will process about $65 billion in workers’ comp benefits this year. Perhaps 15% of these benefits involve very large employers. A further 25% involve employers that are not that large yet incur workers’ comp losses of about $200,000 a year or more. Combined, these employers account for 45% of workers’ comp benefits. In other words, about half of the workers’ comp business today is with employers big enough to know they have a complicated absence management problem on their hands.

Their human resource executives and legal counsel have been telling CEOs that the compliance risks of government mandates can’t be ignored. The mandates have grown into an elephantine mass so thick that without expert outside assistance an employer has a high probability – say, 100% — of violating some law or other.

The more alert and early-adapting segment of employers tends to affiliate with the San Francisco-based Integrate Benefits Institute. Their individual staff members join the San Diego-based Disability Management Employer Coalition. These membership organizations feed the demand for training, resource networking and applied research.

Broadspire, ESIS, Sedgwick, York and perhaps other third-party administrators already market services to manage at least some aspect of non-occupational absences.

Workers’ comp claims payers can manage non-occupational absences because they already possess the needed core competencies. Pared down to the essentials, the workers’ comp claims payer does six things:

  • It processes claims.
  • It assists at some level of intensity in reducing the rate of incidents that end in claims.
  • It coordinates medical treatment and vocational recovery
  • It understands return to work.
  • It prices its product.
  • It complies with pertinent laws.

Absence management does basically the same things.

Further tying together workers’ comp and non-occupational absences in a workforce is the vital role of health behaviors of employees. The workers’ comp claims executive is acutely aware that health behaviors of injured workers often drive up claims costs. It is increasingly clear that smoking can be a more costly unsafe act than, say, distraction. Not that smoking precipitates an occupational or non-occupational injury (there’s scanty evidence of that), but that smokers are at more sharply higher risk to heal slowly and to become dependent on opioids in treatment.

The Integrated Benefits Institute has for years carefully analyzed patterns in non-occupational absences. It says that employers can and should use a coherent master plan for absences of all kinds, wellness initiatives and claims management.

In a phone and email exchange, IBI President Tom Parry suggests that workers’ comp claims payers think through their strengths in medical care, disability management and return to work. “These all are key parts to an employer’s strategy in taking a comprehensive approach to lost work time management,” he says.

Also, he advises, be prepared to benchmark and compare. Get hold of industry-specific benchmarking data across lost time programs, workers’ comp, FMLA and short and long-term disability. Become fluent in plan design terminology on the non-occupational side. Review the research literature on the cross-program impacts of health and a total absence management approach. IBI just published research on claims migration across programs, “Crossing Over — Do Benefits and Risk Managers Have Anything to Talk About?”

Why companies may hold back

A workers’ comp claims payer might enter the absence business because it does not believe that the workers’ comp industry is shrinking. For instance, the average cost of claims may, as it has in the past, grow faster than the reduction in injuries, leaving claims payers with an ever-larger pie. But in recent years average indemnity and medical costs have greatly slowed their growth and in some jurisdictions declined. And the incidence of lost time compensable claims continues to decline, the one clear exception being the island of all exceptions, Southern California.

Also, workers’ comp executives might say there is no apparent demand from their clients for non-occupational services. This sort of flies in the face of the experience of TPAs that have launched non-occupational service units. (True, they focus on the higher end of the employer market.) But the observation also doesn’t jibe with the workers’ comp industry’s experience with emerging services in the past. In instances of innovation, from medical bill review to pharmacy management to Medicare set-asides, large-scale and profitable services emerged after initial years of puzzlement. The fog banks eventually lift.

Then there are impediments in the broker community. It’s almost inevitable that absence management involves insurance products sold through benefits brokers and products sold through property and casualty brokers. They don’t talk a lot, even when working under the same roof. This complicates the work of product design and marketing.

Another reason to say no to opportunity is the challenging learning curve that absence management brings. But look at how the TPAs handled that. Those that have expanded their service offerings beyond workers’ comp claims all appear to forge alliances with, or acquire, servicing partners already steeped in some aspect of absence management.

It may be too harsh to equate workers’ comp claims payers with the railroad industry, which 60 years ago asserted that it was in the railroad, not the transportation, business. Perhaps too harsh, but there may be a lesson in that story.

The decline of work injuries

Injuries requiring at least 31 days away from work

year 1993 2015 2022 (projected)
injuries 450,000 250,000 175,000
Total employment 110 million 133 million 148 million

 

 

Why Employers Must Help Stop Suicide

The American Association of Suicidology said it best when it created this logo for the association: “Suicide prevention is everyone’s business.” By everyone, the association includes employers and work organizations. Considering that the workplace is where the majority of working-age adults spend a significant portion of their day, and sometimes night, it only makes sense that employers and coworkers join the national fight against suicide.

Over the past 10 years, work organizations have begun to realize that they can help identify and treat working adults suffering from depression — a leading risk factor for suicide and also the leading cause of lost work productivity. Despite the knowledge that depression is highly correlated with suicide risk, workplaces have been slow to embrace their potentially critical role in preventing suicide through workplace-based programs. Many of the programs already being offered by employers address depression and can be easily and often freely expanded to also include elements of suicide prevention. The connection between depression and suicide is clear, and employers, large and small, have an important role to take in addressing the public health problem of suicide in our country.

Detecting and treating depression among employees is one way employers can play a significant role. In fact, many employers are already making inroads in minimizing the negative effects of depression and related mental health issues through employer-sponsored benefits such as employee assistance programs (EAPs), workplace wellness programs and occupational health services.

Some of the more commonly offered employer-sponsored interventions at the workplace to identify and respond to depression include workplace-based public awareness campaigns that involve posting suicide warning signs, referral resources and general anti-stigma messages, workplace-based depression screening, such as the program offered through Screening for Mental Health and other early interventions that can be cost-effectively offered through EAP counseling, wellness programs and related occupational health programs.

Improving the detection and treatment of depression and therefore preventing suicide will have a positive impact on the employee and, in the process, the business success of the company. By expanding existing workplace-based wellness programs that often focus heavily on identification and treatment of depression among employees, employers are able to increase the number of employees seeking and obtaining treatment — depression often has low rates of treatment because it is not accurately identified. In fact, prior research shows that, at any given time, depression affects between one-tenth and one-fifth of U.S. employees (Kessler et al., 2008). For employers, this means that for every 100 employees, depression costs employers about $62,000 annually. The majority of this cost does not come from treatment (treatment only accounts for about $9,000), but, rather, costs related to lost work time resulting from sick day absence, work disability (short term and long term disability days) and “presenteeism” (underperformance at the workplace because of illness). In addition, depression and suicide contribute to hidden costs to employers such as lowered morale, increased stress and lower employee engagement and loyalty. The effect of a suicide on coworkers can also be devastating.

In addition to treatment of depression, employers who work with their EAPs and other wellness programs to identify and respond to depression will improve other chronic health conditions. This is because employees who suffer from depression also suffer from an average of 5.1 other chronic health conditions that can complicate treatment and increase costs to the workplace. For example, some of the most serious comorbid conditions in terms of lost productivity with depression include anxiety (48% of employees with depression also have anxiety); chronic fatigue (46%), obesity (29%), chronic sleeping problems (26%) and chronic back and neck pain (32%). (The statistics are from data collected by Integrated Benefits Institute, a leading research organization in health and productivity. See www.ibiweb.org for more information.)

Research suggests that medication and psychotherapy are effective in 70% to 80% of depression cases (RAND, 2008). Employers can require their EAPs and other workplace wellness programs to screen all employees for depression using free and simple validated tools such as the 9-item Patient Health Questionnaire (PHQ-9), where the ninth question asks specifically about suicide risk. Employers can also provide comprehensive depression care management programs for employees screened or otherwise identified to have serious depressive symptoms or for those at increased risk, such as employees who recently went out of the workplace on short-term disability (Desiron, de Rijk, Van Hoof, & Donceel, 2011; Lerner, Rodday, Cohen, & Rogers, 2013; Lo Sasso, Rost, & Beck, 2006).

EAPs are one way through which workplaces have historically and effectively provided help to employees with depression and other mental health and personal problems. EAPs have been shown to be effective in reducing depressive symptoms among employees, including thoughts about suicide (University of Michigan Depression Center). EAPs can provide identification and screening services, such as on-site employee depression screening; however, EAP services go well beyond simple screening and identification. Depending on the services purchased by the employer, EAPs can provide comprehensive assessment, short-term counseling and referral and case management services for longer-term help in the community. Additionally, well-positioned EAPs, those with more on-site access and easy access to consultation with workplace managers and leaders, help to ensure that EAPs are even more effective at recognizing and responding quickly to employee problems such as suicide risk.

Additionally, strategically positioned programs can offer responses that are integrated and in line with the culture of the broader work organization to better serve employees while also supporting workplace productivity. Highly visible and management-supported EAPs can help to reduce stigma toward mental health problems, which in turn will encourage employees to seek help at an earlier stage of their problems and be more responsive to early intervention.

It is important that all employees in the workplace take suicide risk seriously. They should be trained to identify depression and suicide risk among coworkers, not be afraid to ask questions about the well-being of coworkers and refer them to EAPs or other resources when needed. Some examples of companies working to train employees (a designated employee, group of employees or all employees) and raise awareness of suicide and mental health in general are: Chesapeake Energy, DuPont and Johnson & Johnson (see Partnership for Workplace Mental Health for these and other examples).

EAPs can work with employers to develop appropriate training material to help reduce the stigma of mental health problems, not limited to just depression and suicide, so that everyone is able to play a role in contributing to the well-being of the workplace. Just as employees understand and can identify physical safety risks such as falling hazards and safe lifting practices, employees should also understand what to look for when employees may be at risk for a mental health problem.

Even employers who are not able to provide comprehensive services such as EAPs and workplace wellness programs can take small steps that can have a huge impact on saving lives.

One simple first step employers can take to increase awareness of depression and suicide at the workplace is to promote the phone number for the National Suicide Prevention Lifeline (1-800-273-8255) at different locations throughout the workplace where employees will readily see signs, posters and online messages. The Lifeline is a free hotline that can be utilized by anyone who might want to talk with a professional about mental health issues and well-being. Promoting the Lifeline is free to the employer and can be a good way to demonstrate the employer’s interest in the mental wellness of employees. Utilizing free hotline services such as Lifeline is especially important for employees who don’t have access to EAP or other workplace wellness programs.

Overall, we know that workplaces that offer more control to their employees with regard to working conditions that can lower workplace stress, do better with regard to workplace productivity and depression. Therefore, it is critical that employers step up the plate and review and revise workplace policies and programs that are designed to support employees who may be suffering from depression and therefore have increased risk for suicide. By expanding existing programs to include assessment and treatment for depression, employers are working to improve productivity while also preventing suicide at the same time. It is a win-win for employers, employees and society as a whole.

This article was written by Dr. Jacobson Frey; Kimberly Jinnett, PhD; and Jungyai Ko, MSSA.