Bosses assign a new task: Stay well
Mind telling your boss how much you weigh? How about explaining why you missed your last doctor’s appointment? Frustrated with years of skyrocketing health costs, a growing number of employers are relying on an innovative tactic to contain them: nagging -- and sometimes arm-twisting -- employees to get healthier.
The companies are asking employees to report such things as detailed eating habits, how much alcohol they drink and if they made their last checkup or filled their prescriptions on time. Some are hiring “health coaches” to design individual health programs for employees; the coaches then call or even stop by work as often as once a month to check up on their progress. Others have begun screening for diseases themselves, offering mammograms and cardiac stress tests at work.
Although employers have for years used limited health-management tactics, such as smoking-cessation programs and discounts at local gyms, benefits experts say these expanded health programs are now entering the mainstream.
So far, most of the programs, known as health and disease management plans, are voluntary. But a small number of companies are already jumping to what may be the next step -- penalizing employees who either don’t join the health-management plans or who do but fail to make enough health improvements. Others are pondering whether to ban holdout employees from the company’s health insurance plan altogether.
Better managing employees’ health “is an idea whose time has come,” says Peter Lee, president of the Pacific Business Group on Health, a nonprofit employer coalition representing 50 employers. “Employers are realizing they can’t just keep paying more and more for health care without getting at the root of the problem.”
To encourage participation, employers offer everything from free prescriptions to substantial discounts on annual health insurance premiums. This year, El Segundo-based Hughes Electronics is reducing employees’ health insurance premiums by $300 if they take a health-risk assessment exam and join a lifestyle management program if any health risks are identified. The city of Asheville, N.C., now pays for prescription drugs and other health costs for those with diabetes or heart disease, two of the most expensive chronic conditions, if they agree to monthly counseling sessions. In January, Marin General Hospital in California introduced employee insurance premiums of up to $1,200 a year, but is waiving them for anyone who enrolls in its extensive wellness program.
Some employees see the trend as intrusive and an invasion of their privacy. Benefits experts report significant numbers of employees are resisting the new programs, which are attracting as little as 10% of them at some firms (although participation at firms with incentives can be substantially higher). While some workers may be avoiding making lifestyle changes required by the programs, many worry that the information they provide could somehow be used against them in employment decisions.
“I think employees are rightly skeptical about their employer wanting to know all this information and are wondering just what they’ll do with it,” says Lewis Maltby, president of the National Workrights Institute, a workers’ rights advocacy group based in Princeton, N.J. “How far will this all go? Are they now going to tell us we can’t skydive? What about driving too fast?”
Some privacy experts say they fear employers could find ways to use the information punitively to control health-care costs, especially as workers become more accustomed to sharing such information. But most believe such abuses are unlikely.
A string of state and federal laws ban companies from using health information to make hiring, firing or promotion decisions. And many of these health-management programs are handled through companies’ insurers or outside disease management firms, so much of the data is kept off the work site.
It also remains unclear if and how companies can penalize employees over health issues. Laws such as the Americans With Disabilities Act forbid discrimination on the basis of disability in employment, which some courts have said includes obesity and other conditions.
For their part, employers insist health and disease management is a measure of last resort. Health insurance costs continue to rise rapidly, and employers say they have little choice but to reanalyze their health-care offerings. According to a recent survey by Towers Perrin, a human-resources consultant firm, health-care costs nationally are expected to rise another 12% next year, constituting a doubling in costs since 1999.
It’s also becoming clearer that the recent quick fix of simply passing insurance increases on to employees can’t go on forever. Many of the recent employee strikes around the country, like those at several California supermarket chains, have focused squarely on climbing health-care costs and how much employees should bear.
Moreover, by zeroing in on individual employees’ health, employers are at least trying to address one of the biggest hurdles in health care: what to do with the estimated 5% of people who rack up nearly half of all medical costs. By preventively going after these patients -- many of whom suffer from chronic diseases such as asthma, diabetes and heart disease -- companies are putting faith in the adage that an ounce of prevention is worth a pound of cure.
“Companies either have to find a way to reduce costs around employees with chronic conditions, or they’re going to have to start thinking about reducing benefits altogether,” says Linda Bergthold, senior consultant in the Los Angeles office of Watson Wyatt, a human resources firm that consults employers about benefit plans.
Alan Goepner, a 43-year-old yard worker with Cianbro Corp., a mid-size construction company based in Pittsfield, Maine, says he was wary of his company’s new health-management program when it started two years ago. In exchange for a 15% discount on their annual health insurance premiums, Cianbro employees must join a health and disease management program that includes smoking-cessation programs and health coaches who call and visit workers on job sites to check on their progress. (The company also requires all spouses and dependents over 18 to join the program; otherwise none of them get the discount.)
Now Goepner says he is thankful. He walks nearly every day and skips his twice-a-week visits to Burger King in favor of healthier meals such as pasta and vegetables. (One favorite recipe -- sent to all employees -- came inside a recent check.) Both Goepner and his wife have each lost nearly 40 pounds and his cholesterol and blood pressure levels have improved significantly. “I have to tell you, I didn’t realize how fat I was,” says Goepner. “I am almost at the same weight I was when I got out of high school.”
Not all employers are sold on the trend. Although common sense says that having healthier employees will lead to lower health-care costs, the area of disease management is so new that there is little data behind it. And many programs can be expensive, with some costing as much as $100 a month per employee.
Johnson & Johnson, a pioneer in the employee wellness field, has had a voluntary health-management program for several years and says there is no question that it works. The company estimates it is saving $8.5 million a year in lower health costs, lower rates of absenteeism and higher worker productivity.
The question now is whether making the programs mandatory can save even more money. Beginning in January, Cianbro says its employees will be barred from the company’s wellness programs if they don’t make enough effort or improvement. For those employees forced to leave the program, especially low-paid workers who could lose up to $1,500 a year, it could be a big income loss. As severe as that may sound, benefits experts say it’s a tactic that is bound to grow more common.
“If costs keep going up the way they are, I bet it’s two or three years before we see more employers penalizing those who don’t at least try and get healthier,” says Bergthold of Watson Wyatt.
