Homer Alaska - Business

Story last updated at 8:02 PM on Wednesday, February 10, 2010

Wellness programs boost bottom lines

Payoffs include creating more productive workforce, reducing increase in medical costs

By Tim Bradner

Health care reform in Congress may be a dead duck, depending on who's talking, but we don't need a politician to lower our own health care costs.

Added bonus: We'll live longer, too.

Here are some things to start with:

Get off the couch. Pitch the chips. Turn off the idiot box.

Living right, watching the food intake and exercising even moderately is a proven recipe for improving health and lowering doctors' bills, your doctor will tell you.

Insurance companies know this, too, and they're moving it to the bottom line, where it will help our wallets.

Health insurers like Premera/Blue Cross are now in the forefront in pushing "wellness" programs for their customers because it has been shown to lower costs, says Jeff Davis, president of Premera Alaska.

Premera is offering discounts on health insurance premiums to get employers to sign their employees up on wellness programs, Davis said.

The discount can work out to a 5 percent reduction in the premium, but the real payoff is a more productive workforce and a dampening of the rise in medical costs, which is the main driver in health insurance premiums.

Premera has worked for some time with its larger insured groups and firms that are self-insured. The company even has a subsidiary, Vivacity, that works with larger employers on employee wellness.

But Premera is now offering the wellness programs, and the possibility of discounts on premiums, for small companies that employ two to 199 people, Davis said.

Small groups and individuals make up about a third of Premera's Alaska health insurance business.

Davis said it's common sense to eat right, exercise a bit and ditch bad habits like smoking to live better and longer, but solid research now backs up the connection between health care spending and personal choices.

"It's been shown that 25 percent to 50 percent of all health care spending is a result of lifestyle choices people make, and 75 percent of all health care spending results from chronic diseases, like diabetes and heart disease, which are heavily influenced by choices people make, primarily smoking, poor diet and lack of exercise," Davis said.

The workplace is a key place to get people engaged in wellness because delivering information to people where they work is effective because people socialize and it's easier to build support networks.

Employers are usually supportive because they have a stake in healthier employees, with less absenteeism, increased productivity and lower health costs.

Davis said Premera has had basic wellness initiatives under way for some time with a "know your numbers" campaign, which encourages people to visit their physicians and get to know basic measurements of health like blood pressure and cholesterol.

Premera began promoting organized wellness programs more aggressively about four years ago, and has since included small employer groups as well as medium-sized and larger employers.

Premera's plan, even for small employers, involves workers and spouses taking annual health risk appraisals that are Web-based and confidential.

"This is like a compass that shows where we are on this journey through life, and where we can be if we keep doing what we're doing," Davis said.

Coaching is available through Web-based tools, too, and in many cases Premera can provide an on-site visit to do basic checks like blood pressure and cholesterol screening.

Eric Earling, Premera Alaska's public affairs manager, said the screenings are important.

"An individual finding out for the first time that they have high blood sugar or high blood pressure can make significant changes with major health benefits that result," he said.

Davis said about 44 percent of employees covered in its Alaska small group plans are now enrolled in wellness programs and the number is increasing, particularly after Premera started offering discounts. The goal is to get more than 50 percent of employees in the programs because studies have shown that at that level health care costs begin to decline in ways that can be measured.

One other thing Premera is doing is automatically including preventative measures in the policy coverage, so that annual physicals and lab work are covered, including colon cancer screenings.

Alyeska Pipeline Service Co. is one Premera large-group customer that has become a real believer in company-sponsored wellness initiatives, says Tom Brady, who manages Alyeska's wellness programs.

"We were seeing huge increases in health costs until we got active in this. Premera helped us bring a focus to it," Brady said.

The programs have slowed Alyeska's rise in health costs. Still, its hard to really know what decrease is against the normal inflation of health costs.

"We have seen reductions in utilization (fewer visits to doctors) and it would be logical that less utilization would indicate declining costs." Brady said. "At the bottom line, it is hard to sort it out, but the benefits are clearly there. There are studies that show 3 to 1, to 4 to 1 in benefits, meaning for every dollar spent in prevention there is a $3 to $4 decrease in health care spending."

Alyeska has had its own basic wellness programs under way for years but Premera came in with an additional program to help Alyeska's employees manage specific conditions, like diabetes. Among other things it involves periodic "coaching" calls from nurses or other professionals to offer advice and encouragement.

"If people really get busy, they can see results in a year. People have told us they have seen huge reductions in cholesterol and even weight," Brady said.

For those without health issues, the goal is to keep them that way and it sometimes takes offering a reward. Alyeska offers a generous one: a two-month waiver on the employee share of health insurance costs.

Brady said that boosts the first-year participation, when employees are first offered the program, to about 80 percent, and while this appears to drop in following years, it's hard to really know because the only evidence the company has is when employees ask for help or take an action that indicates their participation.

After the first year, a lot of people may be simply practicing wellness on their own, Brady said, once having learned about it, and see no need to inform the company.

There are other incentives. Alyeska has access to an on-site gym for its employees but the facility isn't available to dependents, so the company subsidizes health club membership fees for the family, Brady said.

Participation in other programs, like Weight Watchers and smoking cessation, also are subsidized, sometimes heavily.

Overall, it's the mutual support among employees in the program that produces results, Brady said. Weight-loss competitions and other kinds of contests, usually with prizes, builds morale and makes it fun, he said.

Crowley Maritime Corp., a marine services operator in Alaska, also has made a strong corporate commitment to wellness, particularly since many of Crowley's older employees have been with the company for a long time, some for 30 and 40 years.

The accumulated experience of these employees is a valuable asset to the company, which makes their well-being important to the corporate bottom line, according to Susan Rodgers, Crowley's vice president for corporate services.

Crowley works with United Healthcare to provide the kinds of health screening and other services similar to those Premera provides to its customers.

"The health screenings are a way for our employees to receive a convenient assessment of their basic health and it gives us basic direction for shaping programs to help them," Zorianda Jirau, Crowley's manager for international human resources, said in a company publication.

Like many corporate programs, Crowley's focuses on physical fitness, weight and nutrition. And like Alyeska, the company offers incentives like subsidized health club memberships, participation in Weight Watchers and other programs.

Tim Bradner is a reporter for the Alaska Journal of Commerce.