If you’re like most employers, you offer programs related to safety, absence and disability, benefits and wellness. But how can you unlock further value from these initiatives and bring them all together? The key is to focus on three themes: risk management of health programs, program integration and a compelling employee experience.
Think of employee health as a whitewater rafting trip. Employers need strategies not only to get upstream of the issues but also to deal with the ripples and rapids downstream.
While it’s easy to go with the flow and follow the current, there is great opportunity to help employees remain upstream.
1. Manage risks
Your HR staff may not think of dealing with employees as managing risk. At the same time, there are employees in your company dealing with risk who aren’t thinking about people. Drawing parallels between the two offers insights on how to elevate health with senior leaders, ensuring ongoing support and sustainability for your benefits plan.
A tangible way to do this is to identify manageable risks related to health programs. By quantifying the minimum costs that could be achieved and the maximum costs that could be incurred, you can establish the total manageable risk and quantify your risk exposure. As a result, you can determine the minimum you must pay and a maximum you could pay—everything in between is a variable cost you can influence, at least to some degree. Your chief financial officer and risk manager are interested in understanding manageable risk.
Consider other ways to translate what you do into the language of risk.
Risk exposure refers to the risks your organization faces every day, such as slips and falls, product safety and property losses. On the people side, there are risks associated with employee demographics and health.
Risk transfer is insuring or transferring the risk of large exposures. Insuring longterm disability is a good example.
Risk retention is determining whether to retain certain smaller claims based on expected frequency and dollar amounts. Self-insuring benefits such as short-term disability is one example. Indirect costs such as loss of engagement and productivity are always retained—there is no way to transfer them—so you will need to factor them into your total cost of risk.
Based on the above, you can discuss which health-related risks you should transfer, which you’ll retain and how you’ll manage the retained risks.
2. Integrate your benefits programs
At most companies, a workplace injury, a lengthy absence and a major health claim would likely fall into separate programs: safety, disability management and health benefits, respectively. With different managers, budgets, systems and points of access, many employers present these programs to their employees as separate streams, forcing the employee to figure out which stream he or she belongs in.
If the raft represents the employee’s health, the reality is, it can only be in one stream. Employers are starting to realize an integrated approach focused on the employee’s health needs will best support his or her health and productivity. Let’s follow the stream to see where opportunities to integrate programs exist.
Upstream—where people enjoy good health and productivity, with few absences and insurance claims—you can help those who are active and making healthy choices to keep making those choices. Social media gives employees opportunities to learn from and support one another. Healthy people tend to be more engaged at work, and highly engaged employees tend to be healthier. Consider what is driving or impeding employee engagement in your company.
Ripples in a stream mean there are rocks under the surface. When issues with an employee arise, they may initially appear innocuous: risk factors identified in a health risk assessment, drug costs creeping up or more unscheduled absences. Or a worker may exhibit presenteeism (at work but not fully productive).
Early identification allows for early intervention. However, data tend to be siloed, with separate reports from each provider for STD, LTD, the employee and family assistance program, benefits, workers’ compensation, safety programs and wellness programs. The opportunity is to combine the data and understand not just what happened but also what it means and what to do about it.
Do employees with high risks use more benefits? Does participation in wellness programs reduce health risks and costs? By asking these questions, one organization discovered employees with three or more risk factors incurred 28% higher benefits claim costs annually than those with just one risk factor. Further, risks associated with nutrition and weight caused most of the increased costs, encouraging the employer to focus more on these areas.
To help employees who have drifted into the rapids—those who’ve had a health scare, are incurring absences or need to access the benefits plan—there’s been a movement from disability case management to disability care management (i.e., services wrapping around the individual to provide care and addressing all medical and non-medical issues that may extend disability durations).
Case management starts with a claim and deals with absence and costs. Care management starts with a person and deals with presence and productivity. Until someone goes over the waterfall with a claim, there’s an opportunity to get him or her back upstream. After that, the focus should be on best practices in claims management and appropriate care management.
3. Create a compelling experience
Travelling downstream is easy, but how easy is it to fight the current? Let’s look at how creating an engaging employee experience—appealing to specific segments of the population, incenting behaviours and focusing on the environment—can make the effort upstream more attractive.
Focus on the employee – You’ve heard the adage To catch a fish, go where the fish are. Your employees and their families are fishing for health information, resources and programs. Consider creating an online wellness site where employees and their families can access all health resources from anywhere, at any time, all in one spot.
From the employee’s perspective, having someone act as a health guide can address medical and psychosocial issues, help with financial questions (What does my plan cover? What are other options?), help with navigating the health system (What is available publicly and privately? How quickly can I get this done?) and even enable coaching for both health risks and managing chronic conditions. We are already seeing a move in this direction with health navigation and health advocacy services, for example.
Also, have each of your vendors know what the others offer so they can help your employees navigate between programs. A meeting of all vendors to discuss roles and services available can help get everyone aligned.
Segment and target your workforce – Decisions drive behaviour, so getting upstream means understanding how people make decisions. Some do so based on data; others based on what is most convenient for them. The opportunity is not just to communicate in a way that resonates with people but also to position health programs to motivate desired employee behaviours.
If you can’t have a separate communication plan for each of the decision-making styles of your employees, at least understand which style is most prevalent and tailor your messages to fit.
Use incentives and penalties – Done well, incentives can help keep people on track. Many employers shy away from penalties, though, thinking employees will revolt. However, in a June 2014 Kaiser Health Tracking Poll, 37% of U.S. employees agreed they should pay more for their benefits if they decide not to participate in employer-sponsored health management programs, and 21% agreed they should pay more if they are unable to meet health goals.
With the right program design and communication, employers and employees can share accountability for health, productivity and health-related costs. Behavioural economics shows people hate losing more than they love winning, so plan design considerations (e.g., premium differentials to reward healthy behaviours or penalize unhealthy ones) may be worth exploring.
Staying upstream: 2015 and beyond
People are not good managers of their own risks. Those who smoke, drink too much, are inactive or are overweight are often aware of the risks they face. So if awareness isn’t enough, then what is? Consider focusing more on the environment.
One strategy to manage health risks is to remove the hazard, thereby ending the risk exposure. For example, instead of adding healthy items to your cafeteria and vending machines, just remove the unhealthy ones.
It used to be about making the healthy choice the easy choice; now it’s about making the less-healthy choice the harder choice. Rather than forcing people to supplement unhealthy food at work with healthy food from home, why not force them to supplement the healthy food at work instead? Sound too authoritarian? Many employers already have auto-enrollment with opt-out for a certain level of benefits or for retirement contributions. Why not make people have to opt out of healthy options?
To get ahead of benefits risks and costs, it’s important to view employee health as a single stream. Realign your programs to avoid the need to access different streams for different programs. Integrate your offerings to support all stages and aspects of employee health. Create compelling reasons for people to get upstream through incentives, segmentation, a great experience and a supportive environment.
Focusing on employee health supports business results and improves your company’s risk profile, potentially leading to lower insurance costs and better health and productivity in your workforce. It’s all connected: a focus on employee health is good for your people and your business.
Mike Kennedy is national leader, health strategies & solutions, with Aon Hewitt.
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