The cost of health care in the United States has been steadily rising year after year. Employers and employees are feeling the pain, and both are looking for opportunities to reduce their costs. More and more companies are incentivizing employees to make healthier choices, and workers are taking their employers up on those offers. From counting steps and tracking food intake, to having blood drawn for a variety of tests, employee health data is becoming a new tool in fighting the rising costs and in planning for the future. But how effective are these tactics? And if they work for some businesses, does that mean they’ll work for all?
According to a 2014 report from the Commonwealth Fund, private employer-based health insurance premiums for family coverage have increased 73 percent from the years 2003 to 2013. Single-coverage premiums increased during that timeframe as well, going up 60 percent. Deductibles have been climbing too, as much as doubling at both large and small companies.
Towers Watson, a global professional services company, shared details from their most recent Health Care Changes Ahead survey. Towers Watson found that employers are anticipating a 4 to 5 percent increase in health care costs in 2015. To address this, many employers are planning major changes to their health plans in the coming years. Changes to specialty pharmacy management, spousal and dependent subsidies, telemedicine options and caps on health care coverage are just a few of the tactics. But one route that nearly half of employers (48 percent) said they were considering was related to something that has seen a boom in growth: tying incentives to reaching specified health outcomes, including biometrics. And even more interesting, 76 percent of employers are considering the use of wearable technology and social media applications to encourage greater activity among their employees.
It’s no secret that overall advances in medical technology are improving humans’ lives. The World Bank estimates that the average life expectancy is up to 79 years and rising in the United States. In 1936, the average life expectancy was only 62.
However, other technological advancements, including processed foods and streaming television, have caused an increase in the intake of unhealthy foods and an increase in time spent in front of a screen as opposed to being physically active. Obesity rates in adults increased dramatically over the past 20 years. While there has been some leveling off of those increases, the rates are still historically — and dangerously — high.
Obesity is one of the major causes of a number of chronic conditions, which include diabetes and heart disease. According to Triple Solution for a Healthier America, these chronic conditions are causing health care costs to skyrocket. Heart disease and stroke cost approximately $432 billion annually, while diabetes costs approximately $174 billion annually.
These hefty price tags are forcing businesses to find ways to combat the trends. Many are doing it because they can’t afford not to.
According to Alliance Health, nearly 75 percent of employers who provide health benefits have implemented a workplace wellness program. These programs include services like body fat tests, personalized health coaching, smoking cessation courses, gym memberships and on-site clinics.
Worksite wellness programs can be traced back as far as the end of World War II. Business executives at the time saw value in being physically active, so a number of successful companies built in-office gyms. Some of these gyms were for top-level executives only, but as the years went by, these programs grew in popularity. Today, many employers need these programs to combat health care costs and stay competitive.
According to a study from the RAND Corporation, workplace wellness makes sense because it takes advantage of employers’ access to employees at an age when interventions can still change their long-term health trajectory. Most wellness programs include screening activities (which identify health risks) and interventions (which work to reduce risks and promote healthy lifestyle choices). Nearly three-fourths of employers RAND spoke to have a wellness program that combines these two approaches.
Some companies are stepping it up, literally. With the ever-changing mobile technology, wearable activity trackers — like the Fitbit, Jawbone Up and others — can now document a person’s steps, heart rate, blood pressure, sleep quality and more, and they are growing in popularity. In fact, Fitbit has reported that its sales to organizations for employee wellness is one of its fastest growing segments. According to an article in Fortune, more than 13 million wearable fitness tracking devices are expected to be implemented into workplace wellness programs over the next five years.
One large corporation that has implemented the FitBit into its wellness program is gas and oil giant BP. Employees at BP can participate in the BP Million Step Challenge, which entices employees to increase their steps in exchange for wellness points. The Fitbit and Million Step Challenge are just two components of the wide array of wellness-related services that BP offers to employees. BP’s hope is that all of these options create a healthier workforce that will decrease the costs of health care premiums and increase the productivity of their employees.
One of the biggest concerns about this movement toward wearable activity trackers — especially ones that are feeding information directly to an insurance provider — is data privacy. Insurance companies want the data in order to create a clearer picture of who they’re insuring. Companies want the data in order to spot trends in their workforce that could be changed or reversed. Managers and supervisors could want the data to find out how much sleep their employees are getting each night before coming into work.
For now, however, it seems as though individual data is not being shared. “There are folks who are concerned that their private information will be disclosed,” said Tom Ciccotti, senior vice president at CHC Wellness, a Chicago-based provider of health and wellness programs, in an interview with Chicago Health Online. “All of an individual’s information is completely private — employers and insurance companies will not see it.”
Many workplace wellness programs are targeted at employers whose employees spend most of their time in an office, but successful workplace wellness programs in retail settings are possible too. In a study from Healthways Center for Health Research, data showed that one retail organization’s employees achieved measurable improvements to their overall well-being scores, biometric measurements and workplace productivity. Total cholesterol for the employees dropped an average of 10.8 points, while on-the-job productivity improved by nearly 20 percent. Most retail organizations are reluctant to implement a wellness program, namely because of high turnover rates; leaders assume results will only happen in the long-term. However, this study documented these positive results after only six months.
While the retail organization from this study did see some success, other retail and customer service organizations can find it hard to implement these kinds of strategies. Abbe Goncharsky, vice president for human resources and associate counsel at Mister Car Wash, said the organization is looking into it and determining whether it’s a good fit.
“Helping employees to be happy and healthy is a key part of the HR team’s focus,” Goncharsky said. “The nature of our work means that our employees are frequently quite active while at work, but we’re not content to stop there. Further development and expansion of our wellness program is one of our key goals for 2015.”
Goncharsky said that while Mister Car Wash doesn’t currently have health-related incentives to encourage employees to meet specific health expectations, the organization is talking about it. “We have talked about such programs and have started to lay the foundation as the company continues to grow and develops a strong infrastructure to support our geographical expanse,” she said.
“We’re considering incentives as part of our long-term plan. Our concerns include the logistics of such a program, including the number of locations, the distance between them and the variations between number of employees at each store and in each city in which we operate.”
And the logistics could get complicated. Mister Car Wash has more than 5,000 employees located in 16 states with 152 car washes and 32 lube centers.
Because of the organization’s commitment to its employees, Mister Car Wash is looking into the challenge. “We look forward to providing our employees with an even better experience and benefits as we broaden the scope of wellness at Mister Car Wash,” Goncharsky said. “We want to expand our offerings to all employees, encouraging healthy nutrition, exercise and overall positive choices when it comes to their health.”
While more and more companies are having these same conversations or implementing programs for their employees, the research on their effectiveness is still mixed. In some studies, employees who participated in the programs did end up healthier, but the health care savings were insignificant. In other studies, employees had a hard time sticking with their healthier choices long-term. The credibility of the studies should also be examined: many of the positive studies are done by the organizations who sell wellness program services to employers. If you’re considering adding a wellness program within your organization, follow these tips from Inc.: assess your needs, design a program, get employee buy-in and evaluate. A wellness program won’t work for every organization, but it can for some.