New Tactics, Tools Help Wellness Programs Lift Their Game

Employers consistently cite employee health management as one of their top long-term strategies for slowing medical cost growth — and with the excise tax on high-cost plans looming in 2018, they are more committed to health management than ever. While health management (aka, “wellness”) programs are not new, the past few years have seen rapid evolution in the services offered to employees and their families, and in the strategies used to engage them in caring for their health.

Existing programs have been energized by new insights into the power of social networks to motivate and to change behavior, coupled with game-play strategies using mobile apps and devices that make monitoring health status and participating in programs easy, convenient and even fun. Even more important, employers have recognized that health management programs have the best chance of succeeding in a culture of health that permeates all aspects of work life.

Virtually all large employers provide one or more health management programs. While employers commonly provide at least some services through their health plans, the use of specialty vendors has been growing rapidly (39% of employers contracted with one or more specialty vendors in 2013, up from 30% in 2012). The fastest-growing programs in recent years have been health assessments (offered by 78% of employers) and lifestyle management programs (offered by 66%).

Apart from these more formal program offerings, employers are providing a range of wellness activities to engage employees and help create a culture of health at the worksite. These include group challenges, where work units or locations compete in weight loss, physical activity or other health-related contests (45% of employers); personal challenges (33%); onsite exercise or yoga classes (39%); onsite weight loss programs (40%); and peer-to-peer support opportunities (21%). Employers are also working to reach employees “where they live” by making it easier to track activities and progress toward reaching a goal or to interact with peers via web-based habits are affected by an individual’s home life as well. Employers now often allow and encourage family members to partake in the health management programs. About two-thirds of employers (65%) make spouses eligible for key elements of the health management program. Engaging every member on the health plan maximizes the potential ROI for a health management program.

Employers’ growing commitment to health management is seen in their rapid adoption of reward strategies designed to build employee participation. More than half of the employers with these or other health management programs now offer employees a financial incentive to participate (52%), and a fifth (20%) offer incentives for achieving, maintaining, or showing progress toward specific health status targets. Employers are far more likely to offer financial rewards than financial penalties (45% compared to 15%). However, some choose to provide nonfinancial rewards, such as recognition, chances in a lottery, or token gifts, and a handful make charitable contributions on behalf of employees who participate or achieve program goals.

Are these efforts paying off?  Measuring the return on investment in health management is notoriously challenging for many reasons — not the least because the program can result in improvements in different areas: lower medical costs, improved productivity, and better attraction and retention. Metrics for assessing the total value of investment, or VOI, are being introduced. Meanwhile, we can look at ROI studies that are generally limited to a health care cost trend analysis or a comparison of health care cost for participants versus nonparticipants over time.

About a fifth of all large employers (and about half of those with 20,000 or more employees) have measured ROI, and of those, about three-quarters say that health management has had a positive impact on trend. If those employers that don’t attempt to formally measure results are experiencing similar levels of success, it seems safe to say that employee health management programs have been one factor contributing to slowing health benefit cost growth over the past several years.

Beth Umland
by Beth Umland

Director of Research, Health, Mercer

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