The organizations with the most cost-efficient health plans are the ones that streamline the services employees receive for both their physical and mental health.

As a long-term goal, having your general health plan, staff member assistance program (EAP) and health promotion program communicating regularly with one another about employees’ treatments is the single best way to reduce redundant or contradictory treatments, eliminate unnecessary claims and improve the quality of the plans for which you pay.

Let’s look at the relationship between your health promotion program and your EAP to illustrate the importance of attacking health care costs cross a wide front.

You can begin a health promotion program with a health risk (assessment|appraisal} and then, when appropriate, roll out a smoking cessation program or a weight loss program.

But ultimately you want to make sure that your wellness provider works in conjunction with your EAP provider.

Here is why –  It’s very common for an staff member to contact the EAP because the individuals feels depressed about his or her weight. What you want is for the EAP vendor to treat the employee’s depression and behavioral issues, plus you want the EAP to refer the staff member to the health promotion program to deal with the root cause of the problem – obesity.

The same thing escorts the relationship your health promotion program and your workers’ comp vendor, STD and LTD vendors, rehab people , and/or illness managers. You want all them talking to – and sharing data with – each other. If they’re not, it’s costing you money.

In general, the companys who achieve the greatest cost savings through their health promotion programs are the ones who overlap wellness with behavioral and occupational health issues.

Trying to do more with less money? Here are three proven ways to align the dollars and cents of a health promotion program in your budget.

Common thread –  the way you prepare – and control – your budget for a health promotion program is vital to its success.

1. Top-down health promotion budget

Depending on the size of your organization and health promotion program, you could have full budget responsibility or may need to work with a C-level who’s budgeting expertise.

Regardless of the arrangement, you’re likely to face one of two distinct challenges –  a top-down budget or a zero-based budget.

A top-down budget is when you’re given a finite dollar amount and told to run the health promotion program within the limit. When that’s the case, here are three critical questions to ask –

• Does this limit include money set aside for staff member incentives and future initiatives?

• Should we keep long-tenured programs that keep going up in price, and

• Does Benefits/HR have to deliver all education about the program, or is there additional funding to hire staff?

2.  Zero-based health promotion budgeting

In zero-based funding, you submit to  executive management an itemized list of the programs/features you want and the cost of each. Best practices –

• Rank programs by priority (health-risk assessments should be at or near the top)

• Indicate which expenses are fixed and which are variable, and

• List ways to incorporate existing resources (like an employee assistance program (EAP) program) for a better return on investment.

3. Estimating health promotion ROI

On average, health promotion programs generally take at least 18 months to break even. After three years, you should see savings.

If not, it’s time to take a fresh look at the program design.

Given the immense growth of health promotion programs over the last two years, it was inevitable resistance would creep up among watchdog groups.

In Washington, lobbyists have spearheaded a push for Congress, the DOL and IRS to crack down on “punitive” health promotion programs.

Specifically, the groups seek to limit programs in which employees’ share of their health care costs are directly tied to their willingness to participate in a health promotion program.

HIPAA’s non-discrimination rules prohibit businesss from creating negative financial incentives for employees with health risks.

For  instance, you can’t raise someone’s premium share because he or she smokes. What you can do is offer a discount when someone completes a tobacco use cessation program.

Reason –  the law does allow for financial incentives to staff members who willingly participate in health promotion programs.

The watchdog groups seek greater regulation to be certain incentives and discounts are used only as rewards for healthful behavior, not as a thinly veiled form of discrimination against high-risk employees.

A recent survey finds nearly 42 percent of employers with 200 or fewer staff members have some sort of disease management (DM) program.

That’s a huge increase from four years ago, when just 28 percent of smaller employers offered such programs.

There’s more to come, too. Fifteen% of respondents that didn’t currently have a disease management component to their medical plan hope to add one by 2011.

The highest-demand disease management (DM) programs are for diabetes, asthma and heart disease.

Source –  Small Employer Benefits Survey, PDR Consulting Group, 9/1/2008.

Thinking about an obesity-related disease management program for your organization? Here’s what you need to know.

In order to be effective, the program must meet participants’ individual medical and psychological needs, not to mention your own organization’s need to control long-term health care costs.

How wide-reaching should the program be? After all, it doesn’t make sense to pay for services your staff members don’t want or can’t use.

Mary Beth Chalk of Resources for Living suggests that obesity programs can be broken down into four tiers of staff member need, from which your organization’s return on investment (ROI) can also be measured.

Tier 1 –  Education

Tier I employees struggle with weight control problems but don’t need a health Coach.  Instead, they might benefit from a self-directed program that provides weight-management related materials online, targeted mailing, and/or access to nurse call line.

How to measure ROI –  utilization. Do staff members click on the Web site? Do they return to the site regularly? Do individuals  use the nurse line? Your program vendor ought to provide you detailed use stats.

Tier 2 –  Clinical supervision

If the staff member has been diagnosed as obese – a Body Mass Index (BMI)  score over 30 is obese, over 35 is clinically obese – he or she would do better working with a health coach in a clinically supervised program.

Three keys to getting maximum results –

1. Periodically have participants rate their relationship with their health Coaches. Not everybody clicks, so a change may  be in order.

2. Coordinate your disease management care with your staff member assistance program (EAP)services. Reason –  Inability to control weight is often closely tied with mental health issues – and one can negatively affect the other.

The more closely your employee assistance program and obesity program managers work together, the higher the chance for success.

3. Beware of the fade-out effect. A lot of employees in weight-loss programs get off to a excellent start and then fall back into old habits. Individuals  should re-commit to the program after three sessions, four months and nine months.

To measure ROI, look at utlization, goal achievement and reduced presenteeism. of course, presenteeism is notoriously difficult to measure with reliable dollar figures. So how can you overcome that problem?

• Begin with employees’ salaries. Let’s suppose one participant earns $40,000 per year.

• Ask employees to self-report how energetic and productive they feel on the job, on a percentage scale. Then have supervisors estimate the employee’s productivity and split the difference. for this example, let’s assume it averaged to 50%.

• Collect scores again six months and one year into the program and then multiply the difference by salary. the result is your estimated productivity ROI.

In the example above, when the worker earning $40,000 improves from 50 percent to 75 percent after one year, the productivity related ROI is $10,000.  

Tier 3 –  Medical management

At this level, the obese staff member needs a higher level of care than a health coach can offer. the staff member has chronic medical conditions related to obesity – like diabetes, high blood pressure, and/or sleep apnea – and needs a physician case manager.

Namely, the staff member needs to set up regular visits with the physician and create a treatment plan.

To measure ROI, begin with the lower-tier criteria, then track quarterly and year differences in FMLA or compensated absences, and prescription drug costs. Then compare it to the per-participant cost of the obesity program.

Tier 4 –  Morbid obesity

At this level, the employee has been diagnosed as morbidly obese – BMI over 40 – and is considered a potential candidate for gastric bypass surgery.

ROI is measured through ongoing health claims as well as the previous criteria.

Develop a culture of wellness within your organization

Develop Exemplary Management Support

In the most successful Health Promotion Programs, senior managers lead their organizations by example.  And they work to ensure that the management structure not only allows, but actively encourages their workers to participate.

Organize a Health Promotion Advisory Team

Health Promotion committees serve as the eyes, ears, arms and legs of the program, representing coworkers ideas and concerns, and assisting reshape the organizational culture toward health.

Conduct an Assessment of Financial and Human Assets and Liabilities

Successful Health Promotion Programs are built upon a foundation of information, including claims review, demographic analysis of the workforce, management and worker surveys, health risk data, history of organizational wellness, and health benefit plan design.

Create Clearly Reported Vision, Mission and Outcomes

Establish a clear vision of program direction, expectations and measures to answer the questions, “Where are we going and how’ll we know when we get there?”

Create a Comprehensive and Strategic Health Promotion Program

A multi-component plan ought to consist of strategically developed and implemented awareness, lifestyle change, and supportive environment programs, in addition to policies and activities that target appropriate health risk behaviors and needs of the employees.

Identify an Incentive and Reward Strategy

Incentives show the organizational commitment to the program and motivate individuals to participate. Incentives vary commonly from program to program, but can include such things as time off, reduction in medical insurance premiums or co-pays, cash incentives, discounts to gyms, free pedometers, etc.

Communicate to Employees

Your program must be simple and concise, use an identifiable brand, and rely on a variety of media to communicate with employees and managers.

Evaluate Outcomes

Evaluate program participation, satisfaction levels and behavioral change. You could want to track the number of workers’ compensation claims, productivity, turnover morale and absenteeism.

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Health Promotion Program – Management Support.

Develop Exemplary Management Support

Goal –  A Health Promotion Program established into the organization’s culture.

Focus –  Create support and excitement for the program from all levels of the corporation –   executive management, mid-level management, and grass-roots staff members.

Obtaining  executive management’s buy-in is essential to launching an effective program. the employees must understand that management is supportive of the health promotion program.

Actions –

Create an Upper Management Executive Team to determine high-level decisions – positions that must be included are the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Communications Officer, and other appropriate division-level managers and program experts, as necessary.

The Upper-Level Management Executive Team will –

• Communicate to all levels of management about the program and drive the integration of the Health Promotion Program as a part of the corporation culture.

• Ensure that organizational resources are available for program planning and implementation.

• Be sure to encourage employees to participate and to assist in “recruiting” other employees, get the momentum going, and keep it growing.

• Share success stories within the company, and continue to increase the perceived value of participation.

Organize a Health Promotion Advisory Team

Goal –  Create a working committee that consists of workers and essential functional parts of the organization.

Focus –  to assist in reshaping the organizational culture to support employee-wellness activities by serving as heralds and supporters for the program.

Health Promotion Advisory Committees serve as an essential part of the infrastructure of your Health Promotion Program. the team members are the eyes, ears, arms, and legs of the program.

They represent their colleagues by sharing ideas and concerns about the health promotion program.

Actions –

The Health Promotion Advisory Committee will –

• Be certain to work with  upper management and the Health Promotion Program coordinator in the design, implementation, and analysis of the program.

• Create methods to enhance the acceptance and success of the activities of your Health Promotion Program by encouraging worker ownership of the program.

• Hold periodic meetings to keep the committee informed of upcoming plans and events and to provide feedback to the program coordinator about their thoughts, ideas, and suggestions, and those of their peers.

• Recommend policy and environmental changes that are aimed at improving the health and safety of employees.

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Health Promotion Program – Vision and Mission.

Goal –  Create a baseline of information and identify human and organizational needs.

Focus –  Review a variety of information to better understand past and current conditions regarding health-care utilization, organizational culture, demographic overview, and health-promotion initiatives.

Data collection plays an important role in planning, monitoring, and assessing  a health promotion program. It’ll also set the baseline for continued and future evaluations of program efficiency, effectiveness, and feasibility.

Actions –

• Claims review (health care, pharmaceutical) –

• What have been the 10 most expensive major illness categories in each of the past five years? What are the number of claims and dollars paid for each?

• What have been the 10 most expensive therapeutic classes of drugs in each of the past five years? What are the number of claims and dollars paid for each?

• What have been the 10 most frequently prescribed and filled therapeutic classes of drugs in each of the past five years? What are the number of claims and dollars paid for each?

• Demographic analysis of employee population (may include dependents) –

• List your number of workers, by gender, for each of the past five years and the percentages of males and females by age groups.

• Think about any other factors that might have affected the health of your workers and their use of the health-care system.

This may include mergers, acquisitions, workplace trauma, staff member strikes, layoffs, early retirement offers, etc.

Management survey –

• Conduct surveys of mid-level management to understand their concerns and measure their level of interest and buy-in.

• Employee-interest survey –  Gather information to find out what the staff members want and to measure the level of participation, satisfaction, and “success” of any previous activities.

Risk data (health-risk assessments) –

• Is there any data from health-risk appraisals over the past five years?

Participation in similar activities –

• List and describe all health promotion programs that have been implemented over the past five years, including participation rates.

Design of the health plan, and anticipated changes –

• Have there been any meaningful changes in the health plan’s design in each of the past five years, like a change from an Health Maintenance Organization to a PPO, increased co-payments or deductibles, or increased staff member contributions?

Develop Clearly Announced Vision, Mission and Outcomes

Goal –  Establish a clear vision of program direction, expectations, and measures.

Focus –  Establishing a vision, mission, objectives and objectives to keep your Health Promotion Program focused toward its desired outcomes. It’ll answer the questions, “Where are we going?” and “How will we know when we get there?”

Actions –

• Identify two to five obviously reported objectives. Be sure that your program is capable of having an impact in the area desired, and make sure that you are capable of measuring that impact.

Example Goal –  Staff Members having access to healthier food options

• Start two to five measurable objectives that specifically state what your program is going to accomplish, by when, how, and how it will be measured.

Example Objective –  Modify all vending machines to include 50 percent healthful food choices.

• Identify a few activities that will help you reachyour objective. Activities are very specific.

Example Activity –  Make sure to work with vending machine owners to identify healthy food options and restock with 50% of items that are healthier food options.

• Identify who is going to do what, by when, and what resources are needed.

Example Detail –  the Program coordinator will contact XXX Vending Business by September 30.

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Health Promotion Program Incentives.

Create a Comprehensive and Strategic Health Promotion Program

Goal –  A extensive Health Promotion Program plan.

Focus –  Development of a plan that consists of a variety of awareness, lifestyle change, and supportive environment program, policies, and activities that’ll target risk behaviors, needs, and interests of staff members.

Your Health Promotion Program should provide an integrated, strategic approach specific to the needs, goals, and culture of your organization, designed throughout an annual cycle.

It’ll be important to review and revise existing policies governing such areas as tobacco use, vending machines, and the staff cafeteria. Additionally, it’s useful to examine what company health promotion or health-promotion activities are offered under your existing health-benefit plan.

Actions –

• Create activities based on your program goals and the specific needs of your employees. Focus on those topics that are of greatest interest to your employees and the greatest needs of your business, in that order. Avoid topics with narrow appeal.

• Keep it simple. Design the program so it’s easy for the participants to understand and track. Let staff members focus their learning efforts on their own behavior, not on the rules and regulations of the program.

Additionally, simplify the program administration. Let individuals  record their own activities when possible; create a mixture of self-reported activities along with verified activities.

• Integrate a combination of activities to include awareness, educational, and behavior elements. Link the activities throughout the year to allow for desired behavior repetition.

• Select activities that every worker can participate in.

Examples –

• Challenges –  Activities that focus on practicing a desired behavior and continue for 4-8 weeks and focus on specific topics (like exercise, nutrition, or stress management).

• Learning experiences (seminars, videos, classes) –  One-time activities that last for a relatively short time and focus on a specific topic; these can precede “challenge activities” to prepare participants for behavior change.

• Behavior changes (like smoking cessation) –  Interventions may or may not be offered at the workplace; individuals ought to be encouraged to make lifestyle changes that they wanted to make even without the incentive.

• Illness management (support and education groups for diabetes and hypertension) –  These might  be provided or supported by the business through disease-management vendors, or by community, health, or religious organizations.

• New skills (first aid, cardiopulmonary resuscitation) –  These might  be provided or supported by the corporation, or by community, health, or religious organizations.

• Screenings, wellness assessments, physical exams –  A wellness assessment provides the corporation with aggregate data that may be used in program planning and evaluation; preventive screenings and physical exams may be encouraged by awarding credits to workers.

• Program support (membership or leadership in wellness committee or challenge team) –  Reward those who work with you to help make your Health Promotion Program a success.

• Community events –  Reward participation in events like the Heart Walk or March of Dimes Walk; limit the number of these events that could be counted toward the annual total, and be selective about which events you allow to be counted.

Develop an Incentive Strategy

Goal –  to motivate and reward employee participation and completion.

Focus –  Create a sense of interest in participation and completion of wellness activities.

Providing incentives and rewards will send an important message to the workers that the organization is committed to bettering their health and will share the rewards that these changes will bring. It also plays a significant role in motivating individuals to participate.

Actions –

• Identify through staff members what incentives they value most.

• Identify what incentives the organization can provide.

• Integrate your incentives into your benefits strategy.

• Ensure that every participant who achieves a goal receives some recognition.

• Offer participation incentives.

• Prevent offering incentives for the “best” or the “most.”

• Prevent rewards for biometric changes.

• Use incentives to promote your Health Promotion Program, through logos and branding.

Examples –

Compensated time off, reduction in medical insurance premiums or co-pays, cash incentives, discounts to health clubs, free pedometers, etc.

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Health Promotion Program Communication.

Goal –  Increase awareness of and participation in the Health Promotion Program.

Focus –  Promote the Health Promotion Program to workers to encourage participation in activities and benefits.

A well-designed communications strategy is paramount to successful program awareness and participation. Even a “world class” program design will not succeed when nobody knows that it is available or how to get involved.

Workers who don’t get involved in the program ought to be doing so because they select not to participate, not because they did not know about how, when, or where to participate.

Actions –

• Conduct a Resources and Communications Audit to identify internal and external resources available to support your Health Promotion Program, as well as knowing how information will be disseminated.

• Keep the program simple and concise –  easy to read about, understand, and act upon.

• Build the brand; be sure it’s something that employees can identify with. Add the brand to T-shirts, water bottles, mouse pads, stress balls, etc.

Use a variety of media –

• Print –  flyers, fliers, posters, banners, paycheck inserts, newsletter articles, bulletin boards, literature racks, post cards.

• Electronic – Web, intranet, e-mail, closed-circuit TVs, sign lines, audiovideo productions.

• Staff meetings and organization events; word of mouth.

• Use existing channels of communication – what works best in your company – and be certain to know about all points of contact and systems of distribution.

Timing for communications –

• Prior to activity to create awareness and to educate.

• During activity to stimulate participation.

• After an activity to report results.

• Between activities to maintain momentum and interest.

Consistency of communications –

• Use branding; maintain a consistent look, feel, and tone of messages.

• Maintain this consistency throughout the program.

Surveys and forms –

• Collect information.

• Disseminate information.

Studies show that untargeted health-promotion campaigns have little long-term impact.                  

Chronic illnesss, which rob individuals and families of their health and happiness, represent major costs to employers in the form of health-care and disability costs, lost productivity, and absenteeism.                  

Health Promotion Programs should address risky behaviors that can help your staff members eat healthier, increase their level of exercise, help reduce stress, lower blood pressure and cholesterol, and quit tobacco use. Health promotion programs should focus on assisting staff members achieve and maintain their optimal health status.

Extensive worksite-health programs focused on changing lifestyle behavior have been proven to yield a $3 to $6 return on investment for each dollar invested. It takes about three to five years after the initial program investment to realize these savings.

Ninety-three% of United States  companies offer some kind of health-promotion program for their workers, but is it the right type?

Main Kinds of Health Promotion Programs

Programs focusing on disease management. These programs monitor and treat specific diseases. Disease management follows the 80/20 rule –  80% of health-care costs are spent on 20% of employees.

Illness management is announced to have a $7 to $10 return on investment within a year. the 20 percent of employees requiring the greatest medical expenditures today are usually not the same 20 percent who’ll cause the greatest health care expenses a year or two down the road.

Programs focusing on health enhancement and risk management. These programs focus on lifestyle behavior change, and offer a $3 to $6 return on investment within two to five years, according to a 2004 report issued by the National Corporation Group on Health.

It is important to note that a $3 to $6 return on an entire worker population produces a higher sum savings than does disease management.

Good Data Drives Good Company Decisions

• Based on more than 120 scientific research studies, the National Company Group on Health stated that, within five years of program implementation, overall benefit-to-cost ratios (return on investment) of –

• $3.48 in decreased health-care costs per dollar invested.

• $5.82 in decrease absenteeism per dollar invested.

The Facts Speak for Themselves – Health Promotion Assists Reduce Costs

• A 2003 analysis of one big United States  company found that simply assisting staff members control their blood pressure alone can save $547 per individuals per year.

• Johnson and Johnson claims to have saved $38 million in health-care costs for its workers between 1995 and 1999 by promoting healthful lifestyles.

Health expenses lowered $224 per worker per year (averaged over four years), and this rate improved over time. the business found most benefits in the third and fourth years after program initiation.

• A 2004 University of Michigan study of 23,500 General Motors employees showed that nonexercising employees claimed at least $100 more per year in health-care costs than exercisers.

The research study  also reported that obese, sedentary staff members who began exercising at least twice a week reduced their costs by an typical of $500 a year.

• The Washoe County School District in Nevada estimated that, in a single year, it spent $300,000 on direct costs associated with obesity and $1 million for gastric-bypass surgeries. It instituted a weight-loss program that compensated employees $10 per pound lost, up to 25 pounds.

Program participants missed three fewer workdays per year, producing a cost savings of $15.60 per program dollar spent.

Staff Time                  

Building a successful Health Promotion Program requires staff time as well as money. Some bigger organizations may spend 20 hours per week for three to six months preparing all the steps prior to launching a Health Promotion Program.                  

Company Costs                  

Monetary costs can fluctuate commonly, depending on whether the company pays all costs, the staff members pay all costs, or the costs are shared.                  

A 1992 study indicated that 28% of companies spent $5 or less per employee, and 19% spent between $6-10 per employee.                  

The Health Promotion Council of America estimates the cost per staff member to be between $100 and $150 per year for an effective health promotion program that produces a return on investment of $300 to $450. A sample expenditure for various levels of programs include –                   

Program Type                  

A minimal (largely paper) program          $1 – $7         

A moderate program                   

A medium program with a few activities       $16 – $35            

A fairly extensive program             $36 – $75      

A very robust, effective program       $76 – $112            

• The news isn’t encouraging. According to Business Week, family health-care premiums increased 49 percent from 2000 to 2004.

Another increase of 12-15 percent is expected in 2005. General Motors expects to spend $5.6 billion on healthcare costs in 2005, or 40 percent more than it earned in profits in 2004.

• More and more research shows that poor diet andphysical inactivity are major drivers of increases in healthcare costs for companys. the number of obese adults has doubled since the 1970s.

• The rise in obesity has a meaningful impact on health-care costs. on average, 2002 health-care costs for an obese individuals were $1,244 higher than for a individuals with a healthy weight.

• Obesity is causing rapid increases in kind 2 diabetes and contributes directly to a 65 percent increase in diabetes treatment from 1987 to 2002. Almost $1 of every $5 spent on healthcare in the United States is for a person with diabetes.

Treating worker health care as an investment, rather than a cost, can yield long-term dividends

• At least 50 percent of your organization’s health-care costs are driven by the lifestyle related behaviors of your employees, like tobacco use, poor diet, and lack of exercise.

• In the past 10 years, the annual return on investment for Health Promotion Programs has been as much as $6 saved for every $1 spent, doubling the return on investment of earlier programs.

• The average reduction in health-plan costs, sick leave, disability costs, and workers’ compensation is more than 25% for well-designed Health Promotion Programs.

• Fit employees are more productive employees, with fewer sick days, fewer accidents, higher morale, and lower job turnover.

The concern for employee health promotion is an increasing trend for American company. Why? the link between employee health promotion and the bottom line is clear and consistent.

Employers who integrate wellness in their overall objectives find they experience lowered absences, better morale, lowered health risks, and lowered health-care costs.

The purpose of this guide to is to encourage and help you launch your own Health Promotion Program. When you already have a program, but are not receiving the results you expected, perhaps some of the ideas and best practices in this toolkit will help you and your employees reap the benefits of a healthier workforce.

At least 50 percent of health-care expenditures are lifestyle-related, and accordingly, potentially preventable. Yet despite the $5,000 an average business spends on health care per worker each year, most businesss are spending less than 5 percent of that on medical testings and prevention.

The most robust meta-evaluation of Health Promotion Program studies shows something very exciting! It shows that Health Promotion Programs are not only effective at assisting to reverse the rising spiral of health-care costs, but these programs are also becoming more effective. the typical cost-benefit ratio has increased from 1 – 3 for earlier programs to 1 – 6 today.

Simply put, the typical reduction in health-care costs, sick leave, disability costs, and workers’ compensation is more than 25 percent for well designed programs.

Employee health promotion provides a long-term approach for helping keep staff members well. the single most important thing you are able to do for your staff members is to start a Health Promotion Program now.