Healthcare Accountability: The Good, The Bad and The Ugly

In one of my past articles, I showed why we need to make employees more accountable for their health costs — now the third largest expense in business. The theory behind it is very simple: If 86 percent of all full-time employees in the U.S. have chronic health conditions, that raises their employer’s health costs. And those employers have the right to ask their workers to try to get healthier, or else pay more.

As with any business strategy, of course, a wellness strategy also carries with it a range of plusses and minuses. The good far outweighs the bad, as you’ll see, but it’s best to be prepared for what may happen.

My company Orriant has run accountability-wellness programs for employers all over the country, with participants in every state in the union. But I want to focus here on the experience of our very first client.

Ken Garff Automotive Group, which has dealerships nationwide but operates primarily in the intermountain area, had suffered for years from ever-increasing healthcare costs among its roughly 800 employees. So, the company, with the help of their benefits advisor Diversified Insurance Group, designed an accountability-based wellness program and hired Orriant to launch it. They ask employees to either participate in activities that would increase overall health and wellness, or else pay a larger contribution to their monthly health care premium.

The program follows all five requirements of the federal Health Insurance Portability and Accountability Act (HIPAA) Wellness Guidelines regarding the ways that employers can incentivize employees willing to work to improve their health:

1. The reward offered cannot exceed 20 percent of the total premium (30 percent in 2014).
2. The program must promote health or prevent disease.
3. Companies must offer the program to employees at least once per year.
4. The reward must be available to all similarly situated individuals.
5. Companies must disclose the option of a reasonable alternative health standard for employees.

What does a “reasonable alternative health standard” mean? According to the U.S. Department of Labor, this means that the wellness program must provide reasonable alternative standards to those for whom it is unreasonably difficult or medically inadvisable to attempt to satisfy the general health standard because of their medical condition. In other words, you cannot ask a severe asthmatic or a disabled person to go to the gym to lose weight — which is only fair.

Ken Garff offered a reduced health premium contribution of $45 per month to any employee willing to participate in their wellness program, and the majority of the employees joined. The participants were first given an on-site health assessment — managed by Orriant, of course, because the Americans with Disabilities Act limits an employer’s ability to collect employee health information.

Those who met the health standards for body composition (BMI/body fat percentage), blood pressure, cholesterol, glucose and tobacco use (none) were henceforth only required to participate in quarterly health workshops or seminars conducted at the dealerships. But those who didn’t meet the company health standard were assigned their own personal Orriant health coach who worked with them to improve their exercise and eating habits and other health-related lifestyles. They were then required to track their progress, connect with their coach regularly, meet their goals and demonstrate that they were at least reasonably trying to get healthier — or they would lose their reduced premium for the rest of the plan year.

So what were the results — good, bad, and ugly?

The Good

1. Ken Garff’s average claim per adult between 2004, the year prior to the launch of the program, and 2010, five years into the program, experienced a declining trend of 8 percent— this during a period health spending per person in the US shot up more than 30 percent!
2. When Ken Garff started the program, only 11 percent of employees were free of chronic health risks. By 2011, the number of healthy employees increased to more than 30 percent of the workforce.
3. Among program participants who did have health problems, we witnessed an average improvement per year of 27 percent in employee glucose levels, 20 percent in blood pressure, 7 percent in body fat percentages, 26 percent in total cholesterol levels, and 13 percent in triglyceride levels.
4. Ken Garff saw an incredible 92 percent satisfaction rate among employees in the program, proving once again that most employees are grateful to feel better and actually be healthier.
5. The wellness program cost the company nothing since the increased premium contributions of employees who didn’t participate more than subsidized its cost — meaning a double bonus for the company’s bottom line. It reduced health costs, and did so cost free.

The Bad

Every company that has implemented this accountability-based wellness program has witnessed a healthier workforce during every year of the program. But as is often true in medicine, getting well doesn’t always happen without some pain.

There will always be a small percentage of employees, for example, who resent being asked to change their personal health habits or else pay more for their health insurance. Some people believe health insurance is a right, and it’s just tough if their smoking or other unhealthy habits costs the plan money. Almost ninety percent of the staggering $2.6 trillion that we spend on health care every year goes to treat entirely preventable conditions, but some people just don’t see the connection to their own lives.

As one CEO told me recently, “When we first implemented this program, I had employees come into my office and say, ”What right do you have to ask me to change the way I live my life?“

The CEO’s response was, ”As long as I am paying for most of your health insurance, I believe I have that right. But you are entirely welcome to go out and buy your own insurance.”

The Ugly

The only thing ugly in all this is the alternative of doing nothing while the financial health of our companies continues to be undermined by the declining health of our employees.

We’re in a real crisis here, people. And we better start acting like it if we want our companies, our employees, and our nation to be able to compete on a healthy footing in today’s global economy.

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