BENTON COUNTY Like so many other employers across the country, Benton County officials saw their health-care costs skyrocketing several years ago and knew something had to give.
At the end of 2005, their health-care plan was swimming in some $500,000 of red ink with no life preserver in sight.
“As a county, on our health plan, we were hemorrhaging money,” said Thomas Dunlap, administrator for the county’s benefits plan.
So on June 1, 2006, the county became one of the first employers in the nation to implement a wellness-based plan that rewards its employees with lower premiums if they meet specific targets in their personal health, with a focus on factors tied to weight loss and smoking cessation.
“If employers can focus on behavior and change behavior, they will save money in their plan,” said Dunlap. Although he went into the wellness effort with a degree of skepticism, he realized that the rising costs meant a change was necessary; the subsequent results have made him an ardent supporter of the concept.
AND HE’S NOT ALONE
Many employers across the country have long used incentives to try to improve employees’ health as a way to cuts costs for the employer and the employee. The Arkansas Department of Health, for instance, has a nationally recognized wellness program - the Arkansas Healthy Employee Lifestyle Program, known as AHELP.
But Benton County is among a growing number of employers using financial rewards or penalties to prod their workers toward better health and thereby lower health-care costs.
That’s a concept that lawmakers want to expand in the health-care legislation now in Congress. But it has raised questions about whether such programs are fair to employees with health problems and about whether it’s appropriate for the government to influence personal behavior.
Arkansas’ Democratic Sen. Blanche Lincoln said government can encourage employers and employees to think about how their health-care resources are being spent.
“If government can create that environment,” Lincoln said, “then I think it’s an appropriate place for government to be able to say to businesses and to employees you can improve your quality of life, you can lower the cost, you can create a greater competitive edge for your business and your industry, therefore hopefully keeping those good jobs in this country in a very productive way.”
The most basic wellness programs range from providing company health fairs to paying for gym memberships to offering stop-smoking classes. Other programs - such as the Arkansas Healthy Employee Lifestyle Program, which will expand Dec. 1 to all state employees - track health progress with voluntary selfreporting assessments.
Through the employee-lifestyle program, employees who choose to participate use a Web-based program to track their progress in areas such as healthy eating, physical activity and tobacco use. They earn points that can be redeemed for prizes, including three days of paid vacation time.
Other programs, like the one in Benton County, take the notion a step further by linking health-care premiums to wellness efforts that include monitoring employees’ health status.
In Benton County, employees who choose to participate are monitored in five areas: Blood pressure, blood sugar, cholesterol, nicotine and body mass index. Participants provide yearly blood samples, and data from the screenings are sent to an outside company that provides the results to each individual to ensure privacy.
Through the screening tools, Dunlap said, employees can lower their annual deductible from the starting point of $2,500 to as low as $500.
Benton County’s is an example of the programs the health-care legislation seeks to encourage and expand.
As the law now stands, employers and insurers can offer rewards or penalties - such as reduced premiums, co-payments or deductibles - valued at up to 20 percent of the cost of insurance coverage to workers who take part in wellness programs, which may require employees to meet certain health standards. Dunlap said Benton County is below that 20 percent threshold.
As part of the health-care overhaul, Congress is considering allowing employers to increase those discounts to 30 percent, and possibly as high as 50 percent under certain circumstances. The Senate Finance Committee, of which Lincoln is a member, approved such a provision as part of its health-care proposal.
ADVOCATES FOR HEALTH
It’s a simple premise: Rewarding employees who improve their health not only encourages people to become healthier, it also should lower health-care costs for them and their employers. That’s what Dunlap said has happened in Benton County.
And it would seem a natural way to address what numerous studies have shown - that many health problems and much of the nation’s health spending is because of obesity and smoking along with poor eating habits and not enough exercise.
“There is a benefit both to the company and also to everyone working in the company that everybody is as healthy as possible,” said Dr. Namvar Zohoori, a chronic-disease specialist with the state Health Department’s Center for Health Advancement.
The state’s program doesn’t go as far as Benton County did in linking health criteria to deductible rates. But in discussing the benefits of workplace wellness programs as a whole, Zohoori recited study after study showing that such efforts can reduce health-care costs, employee absenteeism and workers compensation claims while also increasing employee productivity.
The state Health Department offers businesses a guide for creating work-site wellness programs. The agency’s “Guide to Worksite Wellness” cites estimates of how much companies have saved for each dollar invested in such programs, from $2.05 at DuPont to $3.90 at General Mills to $6.15 at Coors.
In addition, Zohoori pointed to the example of the Central Arkansas Veterans Health System wellness program, which, he said, saved an estimated $817,000 - or $8 for each $1 invested - during its first year.
Those kinds of results show that such programs are “absolutely” effective, Zohoori said.
“Based on the studies that exist and the published literature, the evidence is very clear that there is savings in health costs,” he said.
Improving the health of state workers got a big boost from a previous governor - Mike Huckabee, who has used his celebrated weight loss during his gubernatorial tenure to advocate for wellness programs.
In May, he testified before a Republican conference committee about “the lifestyle changes that Americans need to make that can drive costs down, quality of life up and still give people the control of their own lives.”
Joining him on that panel was Steve Hurd, chief executive officer of the Safeway grocery store chain. Hurd, who has become a leading advocate for workplace wellness programs that offer financial rewards or penalties, later appeared on Huckabee’s weekly Fox News television show and has testified before a congressional committee on health-care issues.
In a June 12 column in the Wall Street Journal, Hurd explained that Safeway instituted a health-care plan in 2005 that covers 74 percent of its nonunion employees. Using the same federal provisions as Benton County, which allow financial rewards or penalties tied to health assessments, Hurd said there are “pronounced differences in premiums that reflect each covered member’s behaviors.”
“While comprehensive health-care reform needs to address a number of other key issues,” Hurd wrote, “we believe that personal responsibility and financial incentives are the path to a healthier America.”CRITICS OF PLAN
But it’s precisely the programs that link health criteria with financial rewards or penalties that raise concerns. Some critics worry that wellness programs are a way to shift costs to the less-healthy employees or to force them to find other insurance plans.
Patient-advocacy groups sent a letter to Congress in June saying that they would oppose efforts to increase employers’ premium discounts through wellness programs beyond the current 20 percent.
“We are very concerned that individuals not be penalized - either financially or by exclusion from coverage or services - if they are sick or if they presently engage in specific behaviors or have certain health conditions, such as smoking or obesity,” said the June 9 letter signed by more than three dozen groups, including the American Cancer Society, the American Heart Association and the American Diabetes Association.
Karen Pollitz, a research professor at Georgetown University Health Policy Institute, also raised the issue when she testified June 24 before the Senate Commerce, Science, and Transportation Committee, which was considering health-insurance transparency and accountability issues.
Pollitz pointed out the contradiction between prohibiting insurance companies from setting premium rates based on an individual’s health status but at the same time allowing premiums to vary based on health status “in the context of so-called wellness programs.”
“Because this program discourages some sicker employees from taking coverage,” she said, “it operates very similarly to other insurer practices of charging higher premiums to people with high blood pressure or high cholesterol in order to deter their enrollment. If discrimination like this is prohibited in one contextbut allowed in another, holding private health insurance to a nondiscrimination standard will be a challenge.”
On top of that come questions about whether it’s appropriate for the government to try influencing personal behavior. The track record has been mixed: While Prohibition failed to eliminate drinking, laws requiring use of seat belts and motorcycle helmets have saved lives.
Zohoori isn’t troubled by government encouraging these types of behavior modification programs. “In some ways, isn’t that the role of government - to try and promote the health and wellness of its population?”
The doctor compared encouraging wellness programs with implementing seat-belt laws. “It’s a personal choice,” he said, “but it’s also a public health issue.” NUMBERS TELL THE TALE
So the challenge becomes: How do companies create wellness programs that strike a balance between holding employees responsible for their health while also providing fair insurance coverage and protecting individual privacy and liberty?
A recent analysis in the journal Health Affairs looked at this question. It acknowledged the unique role of the workplace in providing health incentives because most Americans have employer-based insurance.
“Penalties should serve only as incentives to encourage changes in behavior, not as tools to drive atrisk employees out of their health insurance,” the report said, going on to offer criteria for ensuring that such programs are effective and fair to all employees.
Dunlap believes they’ve achieved that balance in Benton County.
About 500 of the county’s 600 employees are on the plan, he said. The county offers group exercise classes and anti-smoking classes. In addition, employees have organized events to help meet their health goals, such as regular weight-loss contests.
But for Dunlap, the proof is in the numbers:
In 2005, coverage for a family with three or more people cost $345 out of an employee’s paycheck. In 2009, it dropped to $290.
in 2005, the county provided $20,000 in life insurance for each employee. In 2009, the county used savings from health costs to increase that to $40,000 and add a long-term disability policy.
Since the plan was implemented in 2005, the copayment has stayed at $20.
“In five years, I’ve never had to go to the Quorum Court and ask for more money for the health plan,” Dunlap said. “In five years, I’ve never had to go to theemployees and ask for more money.”
In the first year, Dunlap acknowledged, there was some resistance to the new plan from employees, including himself. “It took me a little while to warm up to it.”
But as he explains the plan’s success with a series of charts and graphs tracking county health claims and prescription costs, it’s clear his tune has changed: “You won’t find a bigger champion for workplace wellness than Benton County, Arkansas.”
News, Pages 8 on 11/18/2009
Print Headline: Wellness-focus carrying some weight