By : Douglas R. Stover and Jade Wood
"When it comes to company wellness programs, for too long the prevailing belief has been "If you build it, employees will come."This approach has led companies to spend $50 to $150 per employee per year on conventional programs that target physical health -- or an estimated $6 billion per year for the wellness industry overall -- according to studies by the RAND Corporation. However, Gallup has found that only 24% of employees at companies that offer a wellness program actually participate in it. What's more, only 12% of employees strongly agree that they have substantially higher overall well-being because of their employer.
Instead, a majority of employees believe their job is a detriment to their ability to achieve higher well-being. Given the great financial investment and concerted effort to take care of their employees, where are companies going wrong?
Through Gallup's research and experience, we've identified three key areas that either support or derail even the best of intentions:
How Your Company Defines Well-Being
When thinking about well-being, too many companies focus primarily on physical health and fail to address the whole person --which is why so many well-intentioned programs fall short. To have a positive impact on employees' well-being, companies must move beyond a sole emphasis on physical wellness to embrace all the elements that enable employees to live a thriving life.
Those elements encompass how people experience their lives and can be considered the currency of a life that matters. They're also the crucial elements that help determine whether you're getting the best out of your employees every day.
THE GALLUP-HEALTHWAYS WELL-BEING 5Gallup and Healthways have developed a comprehensive, definitive source of well-being measurement, the Gallup-Healthways Well-Being 5. This scientific survey instrument and reporting experience measures, tracks, and reports on the well-being of individuals and organizations. The five essential elements of well-being are:
When you examine your company's current investment in wellness, does it focus on health and wellness alone, or does it encompass the other key elements that influence how your employees experience their lives? Developing thriving employees requires taking a whole-person approach. After all, employees bring every aspect of themselves to work each day.
Expanding your well-being approach to encompass all five well-being elements will pay dividends by helping your company improve the bottom line and outperform competitors. Gallup's analysis shows that adults who are thriving in all five elements report 41% fewer unhealthy days, are 65% less likely to be involved in a workplace accident, and are 81% less likely to look for a new employer, for example, than adults who are thriving in just Physical well-being alone.
How Your Company Culture Supports Well-Being
Employees' perception of organizational support -- the extent to which they believe their company values their contribution and cares about their well-being -- has a significant influence on their likelihood to participate in a well-being program. What shapes your employees' current perception of well-being? And what are the potential barriers that prevent them from participating in a well-being program?
Your company can offer a stress management course, but if employees can't participate because of structural or cultural barriers, it's not going to go very far toward helping them reduce their stress. Well-being must be built into the fabric of the organization so employees don't have to sacrifice performance or take personal risks to improve theirs.
Businesses that take a holistic view of well-being recognize that their organizational identity -- why they exist, how they are known in the market and how they live and work -- influences an employee's ability to achieve higher well-being.
A comprehensive approach requires:
Creating a culture of well-being also requires companies to modify their structure and policies to facilitate well-being. One hospital listened to why its staff were not participating in its myriad on-site well-being initiatives and opened an on-site childcare facility in response. This move met the needs of its employees, enhanced their well-being and engagement, and improved employee engagement and morale.
The Role Your Managers Play in Supporting Well-Being
Managers play a key role in improving employee well-being by modeling how they improve their own well-being -- and by helping employees to improve their well-being too. Gallup has found that direct reports of supervisors with thriving well-being are 15% more likely to be thriving six months later. At your company, do your managers carve out time to take vacation, go to the gym or attend their children's school events? If managers don't do these sorts of things, employees will feel they can't either.
At Gallup, we know one of the most important decisions companies make when engaging employees is simply who they name manager, and this is true for encouraging well-being as well. Managers account for at least 70% of variance in employee engagement scores across business units, and engaged employees are 28% more likely to participate in a wellness program offered by their company than are average employees. Engaged employees also are seven to nine times more comfortable talking about their well-being with their supervisor, and those conversations are crucial in motivating and mentoring employees.
Our experience shows that managers play a key role in promoting well-being by:
Stover, Douglas, and Jade Wood. "Most Company Wellness Programs Are a Bust."Business Journal. Gallup. Web. 24 Feb. 2015. <http://www.gallup.com/businessjournal/181481/company-wellness-programs-bust.aspx>.
"A Massachusetts man lost his job at a Scotts Miracle-Gro lawn and garden center in 2006 when a routine drug test came back positive. The finding: nicotine. Company leaders were cracking down on smoking and otherunhealthy behaviors they saw as bad for the bottom line.That same program saved another Scotts employee’s life. In this case, the worker—following the advice of a company-paid health coach—had some medical tests done and discovered that he was likely just days away from a massive heart attack. Two stents inserted into his coronary arteries saved him from a life-threatening blockage.
These are just two examples of how U.S. employers are dangling “carrots” and swinging “sticks” to prod workers to change their behavior and better their health. Companies have long had an interest in keeping workers healthy, productive, and satisfied while cutting health-care and insurance costs. Increasingly, though, they are using incentives—and disincentives—to rein in these costs’ runaway growth.
So far, tobacco use and obesity are getting the most attention. To prompt workers to stop smoking and lose weight, employers are, among other things:
According to a 2008 national survey by Harris Interactive, 91 percent of employers “believed they could reduce their health care costs by influencing employees to adopt healthier lifestyles,” wrote two Harvard School of Public Health (HSPH) experts in the July 10, 2008 issue of the New England Journal of Medicine. Michelle Mello, a professor of law and public health in the Department of Health Policy and Management, and colleague Meredith B. Rosenthal, an HSPH associate professor of health economics and health policy, spelled out the legal parameters of employer-sponsored wellness programs as they stand today.
According to surveys cited by Mello and Rosenthal, 19 percent of employers with 500 or more employees offered wellness programs as of 2006. Almost 40 percent said they planned to offer monetary rewards for healthy behaviors within two years.
By the rulesEmployee wellness programs have been around for decades. But one likely impetus for these programs to offer a new round of health incentives was the issuing, in December of 2006, of final rules on group health plans under the Health Insurance Portability and Accountability Act (HIPAA). These rules reduced the uncertainty about what was legally permissible, which was probably holding some insurers back from moving in this direction, Mello says.
Among other things, HIPAA limits the value of incentives that group health plans can offer to less than 20 percent of the total cost of health insurance (meaning premiums paid by both employer and employee). This rule allows for up to $2,420 for a family insurance policy costing $12,100 a year. HIPAA rules also distinguish between incentives based on participation in a program and incentives based on achieving certain health standards, such as quitting smoking or attaining a healthier weight as reflected by the body mass index (BMI).*
There are caveats, however. “If the reward is tied to achieving a health standard but there’s no alternative standard available to people who can’t reasonably be expected to meet that standard, it would violate HIPAA,” Mello notes.
Assume, then, by way of example, that “Company X” requires its employees to be nonsmokers and have a BMI under 30. The company’s rationale, backed by the medical literature, would be that (a) people who smoke are more likely to develop heart disease, lung cancer, and other costly and debilitating diseases and (b) those with a higher BMI are likely to develop these as well as other problems, such as diabetes, all of which could erode their productivity and ratchet up their and the company’s health care costs. HIPAA might allow the incentive to help slightly obese workers reach a BMI under 30; however, the law would also require that morbidly obese workers receive the same incentive to meet a less drastic and more realistic target BMI.
All of this is perfectly legal, as long as group health plans abide by HIPAA and insurers and employers abide by the Americans with Disabilities Act, plus other applicable federal and state laws. “It’s rare for courts to find that obesity constitutes a disability under the Americans with Disabilities Act,” Mello says. “Courts have also consistently found that nicotine or tobacco use does not constitute a ‘disability.’” She and Rosenthal point out, however, some courts have ruled “morbid obesity” to be an “impairment” if it can be linked to a “physiological cause.”
Still other federal laws governing health incentive plans include civil rights laws, pay and age discrimination laws, the Employee Retirement Income Security Act (ERISA), and the tax code. State laws may also limit a company’s ability to impose health standards. Several states have statutes that explicitly disallow hiring or firing workers based on their tobacco use.
Step one: health screeningTo screen employees for unhealthy behaviors, many wellness programs use a health risk appraisal as a first step. “Health risk appraisals tend to be broad instruments that collect information about clinical conditions, health-related behaviors, and medical history,” says HSPH’s Rosenthal. “Most include questions related to tobacco and alcohol use, even to things like seat-belt use. Some are more tailored than others.”
Such tools also reflect medical standards for health indicators such as blood pressure and cholesterol, established by clinical experts based on evidence from patient studies. Disease-specific organizations, such as the American Heart Association (AHA) and American Diabetes Association (ADA), post benchmarks on their Web sites.
For example, the AHA puts the high end of normal blood pressure at 120/80. ADA describes blood glucose levels of 70 to 130 mg/dl before meals as normal. Some doctors urge people to take action if their total cholesterol level is above 200, for example, or when their BMI reaches the overweight and obese range.
In August of 2008, the state of Alabama—which already charges tobacco users $25 per month in insurance premiums—announced that as of 2010 it would charge additional monthly premiums for employees who choose not to participate in the state’s wellness program. The state employs more than 37,500 people. (See “Alabama: Targeting Highest-Risk Workers, above”).
Alabama’s chief goal is to identify the people most at risk first, because their levels for BMI, cholesterol, and blood pressure are far above what is considered healthy. “We try to identify people who are at highest risk so they can get the care they need,” explains William Ashmore, chief executive officer of the State Employees Insurance Board (SEIB). Contrary to early news accounts, he says, SEIB is not imposing a “fat tax.” Employee representatives have endorsed the program, he says.
Ashmore says “high-risk” standards that trigger incentives are:
“Alabama is probably barking up the right tree,” says Rosenthal. “Some experts say setting very tight standards and encouraging people to get to them may be missing the point. Getting people below this very high level is much more important in terms of mortality and morbidity than getting people to look like [fitness experts] Jack LaLanne or Kathy Smith. Getting people from a seriously high risk situation to a somewhat less but still risky situation may be the most cost-effective approach.”
Total U.S. health care spending: $2.3 trillion
$7,600 per person (1)
Approaches very widelySome companies are using carrots only. IBM, for instance, offers cash payments for completing certain assessments. Says IBM Well-Being Director Joyce Young, MPH ’81, “We have programs aimed at every risk” (see “IBM: Carrots Only” above). The programs include some on-site fitness centers and, due to the widely dispersed work force, Internet-based assessments. IBM has spent $130 million on wellness since 2004. That figure includes more than 100,000 payouts last year.
A “Smoke-Free Rebate” that IBM offered for three years was recently discontinued, Young says, because the percentage of workers who smoked had plummeted to less than 10 percent. The company still offers a smoking cessation program through an interactive Web site and telephone counseling. IBM’s newest incentive, a “Children’s Health Rebate,” aims to tackle childhood obesity.
One company’s wellness efforts were featured in a cover story in Business Week in February 2007. Scotts Miracle-Gro, headquartered in Marysville, Ohio, built a $5 million “Wellness Center” in 2005 near its headquarters and maintains a medical clinic, a pharmacy, and a fitness center. (See “Scotts Miracle-Gro Gets Down to Details,” above) Scotts adopted a controversial tobacco-free policy in 2006. It no longer hires tobacco users in certain states. Meanwhile, its wellness program aims to encourage smokers to quit.
But trouble emerged when, in September of that year, a man named Scott Rodrigues, who had been working at Scotts on Cape Cod, Massachusetts, for about two weeks (of a 60-day probation), took a required drug test that turned up nicotine. Scotts, whose no-tobacco policy was slated to take effect the next month, let him go. Rodrigues sued. As Business Week noted, the outcome of the case—pending in federal court as of November 1—is difficult to predict because there is so little case law on this narrow topic.
Attorney Lewis Maltby, founder and president of the National Workrights Institute in Princeton, New Jersey, says employers should be cautious in implementing wellness programs that may infringe on privacy and personal interests. But he says he knows of no other cases like the one in Massachusetts. That includes Michigan, where Weyco Inc., now part of health-benefits manager Meritain Health, had not only a no-smoking policy that included mandatory tobacco testing of workers, but a no-smoking policy for spouses as well. No Michigan statute prohibits that kind of action, Maltby says.
Do incentives really work?According to several studies, the cost-effectiveness of health promotion programs varies widely. The Wellness Councils of America maintains that the “return on investment,” or ROI, of such programs is $3 or more for every $1 spent. However, little has been published so far on the ROI of incentives alone. Many experts agree that it takes two to three years for any cost benefit to show up. Even in the best-case scenarios, companies would likely see slower growth in health care costs rather than cost reductions.
“It is difficult to tease out which activity is responsible for what behavior,” explains HSPH alumna and IBM wellness program head Joyce Young. Any change in benefits prompts a cost change, and “You have to control all the changes to be able to see the effect of a health-improvement change,” she says. “It takes years before you see trends.”
As for IBM’s physical activity program, Young and her collaborators at the University of Michigan Health Management Research Center have determined that it does deliver. From 2003 to 2005, participants—53.8 percent of eligible employees—saw their health care costs rise by $291 a year, compared to $360 for nonparticipants. At Scotts, spokesperson Keri Butler says 80 percent of employees take advantage of the company’s Wellness Center. The payoff? Costs are rising, but at a rate “lower than the national average,” she reports.
For her part, HSPH’s Rosenthal says she recently explored whether people who take health risk assessments actually do make behavioral changes to improve their health. “The results don’t suggest any dramatic effects,” she says. “It’s not clear whether assessment alone will be very effective.” On the other hand, there is reason to believe penalties will be. According to a body of research, Rosenthal says, “People are much more averse to losing something than they are excited about the possibility of a gain.”
Experts agree: More research is needed to learn just how effective workplace incentives and disincentives really are. When it comes to the daunting challenge of changing people’s health-related behavior, “carrots” and “sticks” may be the best tools available."
Citation : Hand, Larry. "Employer Health Incentives."News. Harvard School of Public Health, 1 Dec. 2009. Web. 16 Feb. 2015.
"Seventy one percent of consumers want their employer or health plan to offer a program or a set of guidelines that helps them manage their health, according to a recent Survey Sampling International poll of 562 consumers with company-sponsored health plans. The survey was commissioned by San Francisco-based HealthMine, which offers employers and health plans a white-label health improvement program for web and mobile devices.Another 75 percent of consumers want their health plan or employer to offer incentives to help them improve their health.
A smaller percentage, 66 percent of consumers, said that if their colleagues were in a healthy weight range, they should be rewarded with a discount on their health insurance. And 52 percent of consumers said that if their colleagues with chronic diseases adhere to their medication regimen, they should be rewarded for it.
HealthMine CEO Bryce Williams said the company commissioned the survey in light of the EEOC seeking fair rules and guidelines for voluntary employer wellness programs.
Just last week a report in The Hill quoted a senator as saying that the EEOC would be publishing new guidelines for employee wellness programs “very shortly”. One of the core debates about employer-sponsored wellness programs is what exactly constitutes a “voluntary” program.
“…Our survey indicates that consumers want employers to offer incentives and rewards to help them manage their health,” Williams said. “Our eight years of experience helping employers improve outcomes and lower costs using incentive-based personal clinical engagement reinforces this direction. We believe that the EEOC recommendations should enthusiastically support employers in meaningfully encouraging employees to improve their health.”"
Pai, Aditi. "Survey: 71 Percent of Consumers Want Employee Wellness Programs." MobiHealthNews. Chester Street Publishing, 2 Feb. 2015. Web. 16 Feb. 2015.
"I once called a sick crew member from Virgin Atlantic to see how she was doing, only to be told that she couldn’t hear who was on the phone as it was too noisy at Ascot! It wasn’t much of an excuse but more of a case of not covering her tracks!
Ever since we started Virgin, we’ve always worked hard to keep our staff happy and healthy. We believe that if you look after your staff first the rest will follow – a happy workforce is a healthier workforce. Within our Virgin Management headquarters, we run a range of initiatives to help our people stay healthy. Fresh fruit and salad is available free of charge. We have a flexible working policy, allowing staff to work from home or stagger their hours. Plus all employees can take part in the Virgin Pulse programme, which monitors their exercise levels and encourages them to get active.
Last year we introduced unlimited leave for Virgin Management and Virgin Unite; and while the announcement caused a quite a stir, we’ve already seen the benefits. By treating and trusting our staff like the smart and capable adults they are, they return the respect with outstanding productivity. We truly believe that if you take care of your employees, they will take care of your business.
These are just some of the initiatives we’ve implemented to help us achieve a healthy and motivated workforce. With these ideas in place, it’s rare we see staff members ‘pulling a sickie’ – instead they arrange their work schedule to help them best achieve a healthy work-life balance. "
Branson, Richard. "The Best Excuse I've Ever Heard for Calling in Sick." Virgin.com. Virgin, 2 Feb. 2015. Web. 3 Feb. 2015. <http://www.virgin.com/richard-branson/the-best-excuse-ive-ever-heard-for-calling-in-sick>.