Doing it right

How can employers encourage true behaviour change in employees?

While virtue may be its own reward, it may not be enough to motivate employees to be active, quit smoking or lose weight. Study after study has proven that exercise and eating right are key factors in reducing stress and avoiding disease, but what can employers do to encourage employees to do the right thing?

Researchers have spent a lot of time attempting to determine which tool—a carrot or a stick—is most effective for changing behaviour. It’s actually both. A strategic combination of plan design changes to encourage employee responsibility (the stick) and new programs or philosophies to encourage better health choices (the carrot) can produce results.

First off, as an employer, you need to determine what you want your employees to do. Use less-expensive drugs? Use fewer drugs? Take fewer sick days? Be more engaged in their work? Stay longer in your employment? Few programs can do it all, so it’s important to identify goals for your benefits program, craft an appropriate strategy and select the metrics to measure success.

The “right thing” is different for each workplace and for each employee within that workplace. A strategic approach will allow your program to target your employees’ issues, maximizing your return on investment (ROI), potentially reducing benefits costs and increasing employee engagement. A review of your plan’s experience and design will highlight opportunities for changes in behaviour.

A formal health risk assessment (HRA) collects key health indicators for participating employees. Additionally, predictive claims modelling can help determine the health challenges that your employee population faces based on the claims paid under your benefits plan. Looking at the results of these tools in combination will give you the best overall picture of organizational health and support you in setting a strategic approach to change employee behaviour.

Targeted Education
Once you’ve identified the goals of your benefits program, you need to educate employees. Communication of initiatives (e.g., a fitness challenge) is important to encourage employee participation, but communication of more complex changes (e.g., mandatory generic drug substitution) requires employee understanding. Employees who understand that the motivation for a change is to promote the long-term financial viability of the plan and ensure that protection will be there for the future will be more accepting of the change.

Many employers have access to wellness resources through their existing benefits plan. Employee assistance programs provide valuable support for employees with mental health issues. In addition, many providers include initiatives to quit smoking, as well as access to nutritionists and resources to reduce stress, in their basic programs. Review your existing programs in relation to your strategic goals to leverage what you can from them and highlight these programs in your communications.

Strategic Incentives
Would incentives encourage employees to do the right thing? A recent study by the Mayo Clinic found that people were more likely to lose weight when offered a cash incentive of $20 per month. On the flip side, participants who did not lose weight were charged a penalty of $20. Sixty-two percent of the participants in this study stuck with the program for a full year and lost an average of 9.1 pounds. By comparison, in the control group (without the financial incentive), only 26% of participants completed the year-long study, and the average weight lost was only 2.3 pounds. The 2010 Sanofi Canada Healthcare Survey found that 43% of employers were not using any incentives to encourage employees to participate in wellness activities.

The 2010 Mercer Policies and Practices Survey report indicated that just over half of the participating employers provide their employees with a healthcare spending account (HCSA). While it is not yet typical in the Canadian marketplace, an employer could provide an additional deposit into an employee’s HCSA in exchange for participating in wellness-related initiatives, such as an HRA. This could be a tax-effective method of incenting employees while maximizing a tool that is already in place.

A recent Sun Life Financial survey showed that generation Y employees would appreciate a subsidized fitness membership. Would this have the same effect as an actual reward? Recent changes in the tax legislation mean that gym memberships can be provided to employees tax-free under certain conditions, making this option even more attractive.

Promoting Accountability
According to the Mercer Plan Design Database, less than 36% of employers are providing 100% coverage for drugs. Many employers have started to institute cost management in their plans through deductibles, co-pays and drug formularies. These not only transfer the cost to employees but also provide an opportunity to reinforce the corporate strategy and educate employees. Historically, one roadblock to plan design innovation has been an inability to customize claims administration systems. But some insurers have recently taken dramatic steps to change employee behaviour and reduce costs. For example, a few insurers have mandated the use of generic drugs, changing previous policies that allowed cost of a brand name drug when a generic substitution exists if the doctor writes “no substitution” on the prescription.

In addition, one insurer has introduced health case management for plan members taking certain drugs. The health case management program includes monitoring the behaviour of the patient to ensure compliance with the treatment regimen. This should help reduce drug waste from people filling prescriptions but not taking the drugs properly or at all. Ideally, better compliance will improve health outcomes, making treatment more cost-effective and potentially avoiding disability claims.

Other innovations on the drug plan front include mandatory 90-day supplies for maintenance drugs and mail-order pharmacies or preferred provider pharmacy networks. When employees are made accountable, they have a vested interest in managing their own costs. Co-pays that incent employees to use less costly alternative drugs extend the appeal of these alternatives to employees who may not feel accountable to the drug plan but who appreciate the financial incentive of reduced out-of-pocket costs for participating.

Top-down Support
Employees need to know that senior management supports benefits program initiatives. It is difficult to break away and take a fitness class at lunch, for instance, if management is scheduling meetings during this time.

Further, leading by example is crucial. A walking challenge for all employees will be much better received if the company president is seen with a pedometer, taking the stairs. This top-down approach encourages employees to participate, drives a consistent message of health throughout an organization and encourages behaviour change.

The Right Metrics
It’s easy to see the cost benefit of replacing a more expensive drug with a less expensive drug, as the total drug spend under the benefits plan will decrease. The cost of avoidance, however, is less easily measured. The benefits of a wellness program that results in employees lowering their health risks without drugs are not quantified in dollars.

Your strategy should highlight some metrics that you expect to impact. The true savings of behaviour changes will probably never be measurable, as much of the value is in the improved quality of life. However, tangible metrics are meaningful to management and will encourage ongoing support for programs that don’t directly affect the corporate bottom line. Healthy behaviour can result in reduced absence, so you should capture the rate of absences in your employee population. Behaviour changes can reduce the drugs required for many conditions—such as high blood pressure, high cholesterol and diabetes—so you need to track your drug claims. The right benefits strategy and behaviour change incentive can help reduce staff turnover—another metric that can be measured. Metrics with a sound basis that go beyond anecdotes will ensure the ongoing support of senior leadership, which will further encourage employee behaviour changes. Making healthy choices is an ongoing challenge for everyone, but effective support from an employer can reinforce employees’ efforts. Ultimately, employees will be able to change their behaviour—for the better.

Lizann Reitmeier is a principal with Mercer’s health and benefits business in Toronto.

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