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Wednesday, April 16, 2014
How Do Wellness Programs Pay Off?
I run a small business (30 employees) and am looking for ways to reduce the amount of claims paid by our insurance. I`ve read that changes in costs follow changes in risks.
What does this actually mean and how might that affect my bottom line? What are the next steps I should take to reduce my costs for a business as small as mine?
The concept of "changes in costs follow changes in risks" refers to the reduction in health care costs when health risks are lowered. Stated in a different way, one way to reduce the amount of claims paid by your insurance is to improve the health of your employees so that they incur less health care expense. For example, lowering cardiovascular risk by encouraging an employee to engage in regular physical activity and by improving their daily nutrition intake will result in improved cardiovascular health and lower related costs for health issues such as hypertension (high blood pressure), diabetes, and other health problems. Providing ways for your employees to improve their health should result in lower health care costs for them now and in the future. Research has indicated that keeping people healthy will maintain lower health care costs. Also, moving people from a higher health risk level to a lower one, by encouraging them to engage in healthy living habits, will reduce potential future health care expenses.
If you are interested in learning more about how to start this type of effort for your company, you might initiate conversation with your insurance carrier or third party administrator to learn about any related programs that they have available. You may be interested in learning more about this area by accessing the University of Michigan Health Management Research Center at http://www.hmrc.umich.edu/. The "Publications & Research" section might be most helpful in the beginning. Other sites to investigate include the Wellness Councils of America website, http://www.welcoa.org/. Clicking on the "Well Workplace" link at the bottom of the page will provide you with more information to read. The section titled "Seven Benchmarks of Success" would be good for you to read first.
Once you have learned more about this area and determined that you are interested in becoming actively engaged in this process for your company, you might be interested in speaking with a variety of consultants who could provide assistance. These consultants might include: your insurance carrier (if they provide such services), your local Healthy Business Counsel or Health Action Counsel (if you live in the state of Ohio, or a vendor providing such services (University of Michigan Health Management Research Center, WellCorp, and others). Finally, you might also investigate whether or not there are any other businesses in your geographic vicinity that are focusing on improving employee health and ask them about the process that they have implemented.
Examining the type of insurance plans that you offer is another route to follow since you are interested in reducing paid health care claims. A variety of innovative programs have been implemented at other companies that may help yours. Some companies are providing more preventive health care coverage as a way to support their employees’ health. Others are providing incentives in the form of reductions in health insurance premiums for those that engage in certain healthy habits. Finally, some are experimenting with Consumer-Directed Healthcare Plans(CDHPs) to control healthcare expenses. CDHPs include a health savings account and a high deductible health plan for covered individuals and are a newer insurance option. Your insurance carrier or third party administrator can provide more details on this type of plan.
Elizabeth R Click, ND, RN, CWP
Assistant Professor of Nursing and Medical Director
Frances Payne Bolton School of Nursing
Case Western Reserve University