As a long-term goal, having your general health plan, employee assistance program (EAP) and wellness program communicating regularly with one another about employees’ treatments is the single best way to reduce redundant or contradictory treatments, eliminate unnecessary claims and improve the quality of the plans for which you pay.

Let’s look at the relationship between your wellness program and your employee assistance program to illustrate the importance of attacking healthcare costs cross a wide front.

You can start a wellness program with a health risk (assessment|appraisal} and then, if appropriate, roll out a smoking cessation program or a weight loss program.

But ultimately you want to make certain that your wellness provider works and your employee assistance program provider.

Here’s why –  It’s very common for an staff member to contact the EAP because the individuals feels depressed about his or her weight. What you want is for the EAP vendor to treat the employee’s depression and behavioral issues, plus you want the EAP to refer the staff member to the wellness program to deal with the root cause of the problem – obesity.

The same thing accompanies the relationship your wellness program and your workers’ comp vendor, STD and LTD vendors, rehab people , and/or illness managers. You want all them talking to – and sharing data with – each other. When they’re not, it’s costing you money.

In general, the companys who achieve the greatest cost savings through their wellness programs are the ones who overlap wellness with behavioral and occupational health issues.

Common thread –  the way you prepare – and control – your budget for a wellness program is critical to its success.

1. Top-down budget

Depending on the size of your organization and wellness program, you could have full budget responsibility or may need to work with a C-level who’s budgeting specialistise.

Regardless of the arrangement, you’re likely to face one of two distinct challenges –  a top-down budget or a zero-based budget.

A top-down budget is when you’re given a finite dollar amount and told to run the wellness program within the limit. When that’s the case, here are three critical questions to ask –

• Does this limit include money set aside for employee incentives and future initiatives?

• Should we keep long-tenured programs that keep going up in price, and

• Does Benefits/HR have to deliver all education about the program, or is there extra funding to hire staff?

2.  Zero-based budgeting

In zero-based funding, you submit to  upper management an itemized list of the programs/features you want and the cost of each. Best practices –

• Rank programs by priority (health-risk assessments should be at or near the top)

• Indicate which expenses are fixed and which are variable, and

• List ways to incorporate existing resources (like an employee assistance program program) for a better return on investment.

3. Estimating ROI

On average, wellness programs usually take at least 18 months to break even. After three years, you should see savings.

When not, it’s time to take a fresh look at the program design.

In order to be effective, the program must meet participants’ individual medical and psychological needs, not to mention your own organization’s need to control long-term health costs.

How wide-reaching should the program be? After all, it doesn’t make sense to pay for services your workers don’t want or can’t use.

Mary Beth Chalk of Resources for Living suggests that obesity programs may be broken down into four tiers of worker need, from which your organization’s return on investment (ROI) can also be measured.

Tier 1 –  Education

Tier I staff members struggle with weight control problems but don’t need a health coach.  Instead, they could benefit from a self-directed program that provides weight-management related materials online, targeted mailing, and/or access to nurse call line.

How to measure ROI –  utilization. Do staff members click on the Web site? Do they return to the site regularly? Do people  use the nurse line? Your program vendor ought to provide you detailed use stats.

Tier 2 –  Clinical supervision

If the worker has been diagnosed as obese – a BMI  score over 30 is obese, over 35 is clinically obese – he or she would do better working with a health coach in a clinically supervised program.

Three keys to getting maximum results –

1. Periodically have participants rate their relationship with their health coaches. Not everyone clicks, so a change might  be in order.

2. Coordinate your disease management care with your staff member assistance program (EAP)services. Reason –  Inability to control weight is often closely tied with mental health issues – and one can adversely affect the other. the more closely your employee assistance program and obesity program managers work together, the higher the chance for success.

3. Beware of the fade-out effect. A lot of staff members in weight-loss programs get off to a excellent begin and then fall back into old habits. People  should re-commit to the program after three sessions, four months and nine months.

To measure ROI, look at utlization, goal achievement and decreased presenteeism. of course, presenteeism is notoriously challenging to measure with reliable dollar figures. So how can you overcome that problem?

• Begin with employees’ salaries. Let’s suppose one participant earns $40,000 per year.

• Ask employees to self-report how energetic and productive they feel on the job, on a percentage scale. Then have supervisors estimate the employee’s productivity and split the difference. for this example, let’s assume it averaged to 50 percent.

• Collect scores again six months and one year into the program and then multiply the difference by salary. the result is your estimated productivity ROI.

In the example above, when the worker earning $40,000 improves from 50 percent to 75 percent after one year, the productivity related ROI is $10,000.  

Tier 3 –  Medical management

At this level, the obese staff member needs a higher level of care than a health coach can offer. the staff member has chronic health conditions related to obesity – such as diabetes, high blood pressure, and/or sleep apnea – and needs a doctor case manager. In particular, the staff member needs to set up regular visits with the doctor and create a treatment plan.

To measure ROI, start with the lower-tier criteria, then track quarterly and year differences in FMLA or compensated absences, and prescription drug costs. Then compare it to the per-participant cost of the obesity program.

Tier 4 –  Morbid obesity

At this level, the worker has been diagnosed as morbidly obese – Body Mass Index (BMI) over 40 – and is considered a potential candidate for gastric bypass surgery.

ROI is measured through ongoing health claims in addition to the previous criteria.

In Washington, lobbyists have spearheaded a push for Congress, the DOL and IRS to crack down on “punitive” wellness programs.

Especially, the groups seek to limit programs in which employees’ share of their health costs are directly tied to their willingness to participate in a wellness program.

HIPAA’s non-discrimination rules prohibit companys from creating negative financial incentives for employees with health risks.

For  instance, you can’t raise someone’s premium share because he or she smokes. What you can do is offer a discount if someone completes a tobacco use cessation program.

Reason –  the law does allow for financial incentives to staff members who willingly participate in wellness programs.

The watchdog groups seek greater regulation to make sure incentives and discounts are used only as rewards for healthful behavior, not as a thinly veiled form of discrimination against high-risk employees.

That’s a enormous increase from four years ago, when just 28 percent of smaller employers offered such programs.

There’s more to come, too. Fifteen% of respondents that didn’t currently have a disease management component to their health plan hope to add one by 2011.

The highest-demand disease management programs are for diabetes, asthma and heart illness.

Source –  Small Employer Benefits Survey, PDR Consulting Group, 9/1/2008.

In order to be effective, the program must meet participants’ individual medical and psychological needs, not to mention your own organization’s need to control long-term health costs.

How wide-reaching should the program be? After all, it doesn’t make sense to pay for services your employees don’t want or can’t use.

Mary Beth Chalk of Resources for Living suggests that obesity programs may be broken down into four tiers of worker need, from which your organization’s return on investment (ROI) can also be measured.

Tier 1 –  Education

Tier I workers struggle with weight management problems but don’t need a health coach.  Instead, they could benefit from a self-directed program that provides weight-management related materials online, targeted mailing, and/or access to nurse call line.

How to measure ROI –  utilization. Do workers click on the Web site? Do they return to the site regularly? Do individuals  use the nurse line? Your program provider should provide you detailed use stats.

Tier 2 –  Clinical supervision

When the employee has been diagnosed as obese – a BMI  score over 30 is obese, over 35 is clinically obese – he or she would do better working with a health coach in a clinically supervised program.

Three keys to getting maximum results –

1. Periodically have participants rate their relationship with their health coaches. Not everyone clicks, so a change may  be in order.

2. Coordinate your disease management care with your worker assistance program (EAP)services. Reason –  Inability to control weight is often closely tied with mental health issues – and one can negatively affect the other.

The more closely your EAP and obesity program managers work together, the higher the chance for success.

3. Beware of the fade-out effect. A lot of employees in weight-loss programs get off to a great start and then fall back into old habits. Individuals  should re-commit to the program after three sessions, four months and nine months.

To measure ROI, look at utlization, goal achievement and reduced presenteeism. of course, presenteeism is notoriously difficult to measure with reliable dollar figures. So how can you overcome that problem?

• Begin with employees’ salaries. Let’s suppose one participant earns $40,000 per year.

• Ask workers to self-report how energetic and productive they feel on the job, on a percentage scale. Then have supervisors estimate the employee’s productivity and split the difference. for this example, let’s assume it averaged to 50%.

• Collect scores again six months and one year into the program and then multiply the difference by salary. the result is your estimated productivity ROI.

In the example above, when the worker earning $40,000 improves from 50% to 75% after one year, the productivity related ROI is $10,000.  

Tier 3 –  Medical management

At this level, the obese worker needs a higher level of care than a health coach can offer. the worker has chronic health conditions related to obesity – such as diabetes, high blood pressure, and/or sleep apnea – and needs a physician case manager.

Particularly, the employee needs to set up regular visits with the doctor and develop a treatment plan.

To measure ROI, start with the lower-tier criteria, then track quarterly and year differences in FMLA or compensated absences, and prescription drug costs. Then compare it to the per-participant cost of the obesity program.

Tier 4 –  Morbid obesity

At this level, the employee has been diagnosed as morbidly obese – BMI over 40 – and is considered a potential candidate for gastric bypass surgery.

ROI is measured through ongoing health claims as well as the previous criteria.

Develop Exemplary Management Support

In the most successful Wellness Programs, senior managers lead their organizations by example. and they work to ensure that the management structure not only allows, but actively encourages their staff members to participate.

Organize a Wellness Advisory Team

Wellness committees serve as the eyes, ears, arms and legs of the program, representing coworkers ideas and concerns, and helping reshape the organizational culture toward health.

Conduct an Assessment of Financial and Human Assets and Liabilities

Successful Wellness Programs are built upon a foundation of information, including claims review, demographic analysis of the workforce, management and employee surveys, health risk data, history of organizational wellness, and health benefit plan design.

Create Obviously Stated Vision, Mission and Outcomes

Establish a clear vision of program direction, expectations and measures to answer the questions, “Where are we going and how will we know when we get there?”

Develop a Extensive and Strategic Wellness Program

A multi-component plan should consist of strategically created and implemented awareness, lifestyle change, and supportive environment programs, in addition to policies and activities that target appropriate health risk behaviors and needs of the employees.

Identify an Incentive and Reward Strategy

Incentives show the organizational commitment to the program and motivate person to participate. Incentives vary commonly from program to program, but can include such things as time off, reduction in health insurance premiums or co-pays, cash incentives, discounts to fitness clubs, free pedometers, etc.

Communicate to Employees

Your program ought to be simple and concise, use an identifiable brand, and rely on a selection of media to communicate with workers and managers.

Evaluate Outcomes

Evaluate program participation, satisfaction levels and behavioral change. You may want to track the number of workers’ compensation claims, productivity, turnover morale and absenteeism.

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Wellness Program – Management Support.

Create Exemplary Management Support

Goal –  A Wellness Program established into the organization’s culture.

Focus –  Create support and excitement for the program from all levels of the corporation –   upper-level management, mid-level management, and grass-roots employees.

Obtaining  upper-level management’s buy-in is essential to launching an effective program. the employees must understand that management is supportive of the wellness program.

Actions –

Develop an Upper-Level Management Executive Team to determine high-level decisions – positions that must be included are the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Communications Officer, and other appropriate division-level managers and program professionals, as necessary.

The Upper-Level Management Executive Team will –

• Communicate to all levels of management about the program and drive the integration of the Wellness Program as a part of the corporation culture.

• Ensure that organizational resources are available for program planning and implementation.

• Make sure to encourage staff members to participate and to assist in “recruiting” other staff members, get the momentum going, and keep it growing.

• Share success stories within the corporation, and continue to raise the perceived value of participation.

Organize a Wellness Advisory Team

Goal –  Create a working committee that consists of staff members and essential functional parts of the organization.

Focus –  to assist in reshaping the organizational culture to support employee-wellness activities by serving as heralds and supporters for the program.

Wellness Advisory Committees serve as an essential part of the infrastructure of your Wellness Program. the team members are the eyes, ears, arms, and legs of the program.

They represent their peers by sharing ideas and concerns about the wellness program.

Actions –

The Wellness Advisory Committee will –

• Be sure to work with  executive management and the Wellness Program coordinator in the design, implementation, and evaluation of the program.

• Develop methods to enhance the acceptance and success of the activities of your Wellness Program by encouraging staff member ownership of the program.

• Hold periodic meetings to keep the committee informed of upcoming plans and events and to provide feedback to the program coordinator about their thoughts, ideas, and suggestions, and those of their coworkers.

• Recommend policy and environmental changes that are aimed at improving the health and safety of staff members.

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Wellness Program – Vision and Mission.

Goal –  Create a baseline of information and identify human and organizational needs.

Focus –  Review a selection of information to better understand past and current conditions regarding health-care utilization, organizational culture, demographic overview, and health-promotion initiatives.

Data collection plays an important role in planning, monitoring, and evaluating  a wellness program. It’ll also set the baseline for continued and future evaluations of program efficiency, effectiveness, and feasibility.

Actions –

• Claims review (health care, pharmaceutical) –

• What have been the 10 most costly major illness categories in each of the past five years? What are the number of claims and dollars compensated for each?

• What have been the 10 most expensive therapeutic classes of drugs in each of the past five years? What are the number of claims and dollars paid for each?

• What have been the 10 most frequently prescribed and filled therapeutic courses of drugs in each of the past five years? What are the number of claims and dollars compensated for each?

• Demographic analysis of worker population (may include dependents) –

• List your number of staff members, by gender, for each of the past five years and the percentages of males and females by age groups.

• Think about any other factors that might have affected the health of your employees and their use of the health-care system.

This may include mergers, acquisitions, workplace trauma, employee strikes, layoffs, early retirement offers, etc.

Management survey –

• Conduct surveys of mid-level management to understand their concerns and measure their level of interest and buy-in.

• Employee-interest survey –  Gather information to find out what the staff members want and to measure the level of participation, satisfaction, and “success” of any previous activities.

Risk data (health-risk assessments) –

• is there any data from health-risk appraisals over the past five years?

Participation in similar activities –

• List and describe all wellness programs that have been implemented over the past five years, including participation rates.

Design of the health plan, and anticipated changes –

• Have there been any significant changes in the health plan’s design in each of the past five years, such as a change from an health maintenance organization to a PPO, increased co-payments or deductibles, or increased staff member contributions?

Create Clearly Announced Vision, Mission and Outcomes

Goal –  Establish a clear vision of program direction, expectations, and measures.

Focus –  Setting a vision, mission, goals and goals to keep your Wellness Program focused toward its desired outcomes. It will answer the questions, “Where are we going?” and “How’ll we know when we get there?”

Actions –

• Identify two to five obviously stated objectives. Be sure that your program is capable of having an impact in the area desired, and make sure that you are capable of measuring that impact.

Example Goal –  Staff Members having access to healthier food options

• Establish two to five measurable goals that in particular state what your program is going to accomplish, by when, how, and how it will be measured.

Example Objective –  Modify all vending machines to include 50 percent healthy food choices.

• Identify a few activities that will help you reachyour objective. Activities are very specific.

Example Activity –  Make sure to work with vending machine owners to identify healthful food options and restock with 50% of items that are healthier food options.

• Identify who is going to do what, by when, and what resources are needed.

Example Detail –  the Program coordinator will contact XXX Vending Corporation by September 30.

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Wellness Program Incentives.

Create a Extensive and Strategic Wellness Program

Goal –  A extensive Wellness Program plan.

Focus –  Development of a plan that consists of a selection of awareness, lifestyle change, and supportive environment program, policies, and activities that’ll target risk behaviors, needs, and interests of staff members.

Your Wellness Program should provide an integrated, strategic approach specific to the needs, goals, and culture of your organization, designed throughout an annual cycle.

It will be important to review and revise existing policies governing such areas as smoking, vending machines, and the staff cafeteria. Also, it’s useful to examine what corporate wellness or health-promotion activities are offered under your existing health-benefit plan.

Actions –

• Create activities based on your program goals and the specific needs of your workers. Focus on those topics that are of greatest interest to your workers and the greatest needs of your company, in that order. Avoid topics with narrow appeal.

• Keep it simple. Design the program so it’s easy for the participants to understand and track. Let workers focus their learning efforts on their own behavior, not on the rules and regulations of the program.

Also, simplify the program administration. Let people  record their own activities when possible; create a mixture of self-reported activities along with verified activities.

• Integrate a combination of activities to include awareness, educational, and behavior elements. Link the activities throughout the year to allow for desired behavior repetition.

• Pick activities that every employee can participate in.

Examples –

• Challenges –  Activities that focus on practicing a desired behavior and continue for 4-8 weeks and focus on specific topics (like exercise, nutrition, or stress management).

• Learning experiences (seminars, videos, classes) –  One-time activities that last for a relatively short time and focus on a specific topic; these can precede “challenge activities” to prepare participants for behavior change.

• Behavior changes (like smoking cessation) –  Interventions may or might not be offered at the workplace; person should be encouraged to make lifestyle changes that they wanted to make even without the incentive.

• Illness management (support and education groups for diabetes and hypertension) –  These may  be provided or supported by the company through disease-management vendors, or by community, health, or religious organizations.

• New skills (first aid, cardiopulmonary resuscitation) –  These might  be provided or supported by the company, or by community, health, or religious organizations.

• Screenings, wellness assessments, physical exams –  A wellness assessment provides the company with aggregate data that can be used in program planning and investigation; preventive screenings and physical exams can be encouraged by awarding credits to staff members.

• Program support (membership or leadership in wellness committee or challenge team) –  Reward those who work with you to help make your Wellness Program a success.

• Community events –  Reward participation in events like the Heart Walk or March of Dimes Walk; limit the number of these events that may be counted toward the annual total, and be selective about which events you allow to be counted.

Create an Incentive Strategy

Goal –  to motivate and reward employee participation and completion.

Focus –  Create a sense of interest in participation and completion of wellness activities.

Providing incentives and rewards will send an important message to the employees that the organization is committed to bettering their health and will share the rewards that these changes will bring. It also plays a meaningful role in exciting individuals to participate.

Actions –

• Identify through employees what incentives they value most.

• Identify what incentives the organization can provide.

• Integrate your incentives into your benefits strategy.

• Ensure that every participant who achieves a goal receives some recognition.

• Offer participation incentives.

• Avoid offering incentives for the “best” or the “most.”

• Prevent rewards for biometric changes.

• Use incentives to promote your Wellness Program, through logos and branding.

Examples –

Compensated time off, reduction in health insurance premiums or co-pays, cash incentives, discounts to gyms, free pedometers, etc.

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Wellness Program Communication.

Goal –  Increase awareness of and participation in the Wellness Program.

Focus –  Promote the Wellness Program to staff members to encourage participation in activities and benefits.

A well-designed communications strategy is paramount to successful program awareness and participation. Even a “world class” program design won’t succeed when nobody knows that it’s available or how to get involved.

Workers who don’t get involved in the program must be doing so because they choose not to participate, not because they didn’t know about how, when, or where to participate.

Actions –

• Conduct a Resources and Communications Audit to identify internal and external resources available to support your Wellness Program, as well as knowing how information will be disseminated.

• Keep the program simple and concise –  easy to read about, understand, and act upon.

• Build the brand; be certain it’s something that employees can identify with. Add the brand to T-shirts, water bottles, mouse pads, stress balls, etc.

Use a variety of media –

• Print –  flyers, fliers, posters, banners, paycheck inserts, newsletter articles, bulletin boards, literature racks, post cards.

• Electronic – Web, intranet, e-mail, closed-circuit TVs, sign lines, audiovideo productions.

• Staff meetings and organization events; word of mouth.

• Use existing channels of communication – what works best in your business – and be sure to know about all points of contact and systems of distribution.

Timing for communications –

• Prior to activity to develop awareness and to educate.

• During activity to stimulate participation.

• After an activity to report results.

• Between activities to maintain momentum and interest.

Consistency of communications –

• Use branding; maintain a consistent look, feel, and tone of messages.

• Maintain this consistency throughout the program.

Surveys and forms –

• Collect information.

• Disseminate information.

Chronic diseases, which rob person and families of their health and happiness, represent major costs to companys in the form of health-care and disability costs, lost productivity, and absenteeism.                  

Wellness Programs should address risky behaviors that can help your staff members eat healthier, increase their level of exercise, help reduce stress, lower blood pressure and cholesterol, and quit smoking. Wellness programs should focus on helping staff members achieve and maintain their optimal health status.

Comprehensive worksite-health programs focused on changing lifestyle behavior have been proven to yield a $3 to $6 return on investment for each dollar invested. It takes about three to five years after the initial program investment to realize these savings.

Ninety-three percent of U.S.  companies offer some type of health-promotion program for their workers, but is it the right type?

Main Types of Wellness Programs

Programs focusing on illness management. These programs monitor and treat specific diseases. Disease management follows the 80/20 rule –  80 percent of health-care costs are spent on 20 percent of workers.

Illness management is reported to have a $7 to $10 return on investment within a year. the 20 percent of employees requiring the greatest medical expenditures today are usually different 20 percent who will cause the greatest health expenses a year or two down the road.

Programs focusing on health enhancement and risk management. These programs focus on lifestyle behavior change, and offer a $3 to $6 return on investment within two to five years, as reported by a 2004 report issued by the National Business Group on Health.

It is important to note that a $3 to $6 return on an entire worker population produces a higher total savings than does illness management.

Good Data Drives Good Company Decisions

• Based on more than 120 scientific research studies, the National Company Group on Health reported that, within five years of program implementation, overall benefit-to-cost ratios (return on investment) of –

• $3.48 in lowered health-care costs per dollar invested.

• $5.82 in lower absenteeism per dollar invested.

• A 2003 investigation of one big USA  employer found that simply helping workers control their blood pressure alone can save $547 per individuals per year.

• Johnson and Johnson claims to have saved $38 million in health-care costs for its employees between 1995 and 1999 by promoting healthful lifestyles.

Medical expenses decreased $224 per staff member per year (averaged over four years), and this rate improved over time. the corporation found most benefits in the third and fourth years after program initiation.

• A 2004 University of Michigan study of 23,500 General Motors workers showed that nonexercising workers claimed at least $100 more per year in health-care costs than exercisers.

The study  also reported that obese, sedentary staff members who began exercising at least twice a week decreased their costs by an average of $500 a year.

• the Washoe County School District in Nevada estimated that, in a single year, it spent $300,000 on direct costs associated with obesity and $1 million for gastric-bypass surgeries. It instituted a weight-loss program that paid employees $10 per pound lost, up to 25 pounds.

Program participants missed three fewer workdays per year, producing a cost savings of $15.60 per program dollar spent.

Staff Time                  

Building a successful Wellness Program requires staff time as well as money. Some larger organizations may spend 20 hours per week for three to six months preparing all the steps prior to launching a Wellness Program.                  

Company Costs                  

Monetary costs can fluctuate widely, depending on whether the corporation pays all costs, the workers pay all costs, or the costs are shared.                  

A 1992 study indicated that 28 percent of corporations spent $5 or less per staff member, and 19 percent spent between $6-10 per staff member.                  

The Wellness Council of America estimates the cost per staff member to be between $100 and $150 per year for an effective wellness program that produces a return on investment of $300 to $450. A sample expenditure for various levels of programs include –                   

Program Type                  

A minimal (largely paper) program          $1 – $7         

A moderate program                   

A medium program with several activities       $16 – $35            

A fairly robust program             $36 – $75      

A very comprehensive, effective program       $76 – $112            

Another increase of 12-15% is expected in 2005. General Motors expects to spend $5.6 billion on health costs in 2005, or 40% more than it earned in profits in 2004.

• More research shows that poor diet andlack of exercise are major drivers of increases in healthcare costs for businesss. the number of obese adults has doubled since the 1970s.

• the rise in obesity has a significant impact on health-care costs. on average, 2002 health-care costs for an obese individuals were $1,244 higher than for a individuals with a healthful weight.

• Obesity is causing rapid increases in kind 2 diabetes and contributes directly to a 65% increase in diabetes treatment from 1987 to 2002. Nearly $1 of every $5 spent on health care in the U.S. is for a person with diabetes.

Treating staff member healthcare as an investment, rather than a cost, can yield long-term dividends

• at least 50% of your organization’s health-care costs are driven by the lifestyle related behaviors of your workers, like use of tobacco, poor diet, and lack of exercise.

• In the past 10 years, the annual return on investment for Wellness Programs has been as much as $6 saved for every $1 spent, doubling the return on investment of earlier programs.

• the average reduction in health-plan costs, sick time, disability costs, and workers’ compensation is more than 25% for well-designed Wellness Programs.

• Fit workers are more productive workers, with fewer sick days, fewer accidents, higher morale, and lower job turnover.