Regardless of where you stand on the topic of presidential candidates; how you may feel about the Patient Protection and Affordable Care Act (PPACA) – otherwise known as ‘Obamacare’ – the undeniable reality is that things are changing. In fact, things could change a lot.
Our current administration has determined that the number of uninsured Americans is a significant variable in the battle against rising health care costs. In order to curb the numbers of uninsured people, the states are tasked with creating Health Exchanges (HE).
Although these changes feel like a different health care ‘system’, the providers are familiar insurance carriers we have seen in the old system. The federal government is helping with funding needed to create these exchanges and the online tools required to house the HE program.
But beyond that, the way things are going to play out is up for debate. Officials in Washington D.C. recently voted – and unanimously approved – closure of the private insurance marketplace for both individuals and small businesses. These individuals and small businesses would be required to purchase insurance through the DC Health Exchange as of 2014. This ruling would also affect neighboring states, such as Maryland and Virginia.
Here in Colorado, the HE will be a government run entity expected to be in place no later than January 1, 2014. Individuals, families and businesses with fewer than 100 employees can buy insurance through the state based exchanges. The Affordable Care Act hopes to lower health care costs for Colorado families and small businesses, potentially reducing the cost of family health insurance premiums by $1,510 – $2,160.
If you were to look into coverage under the HE, you would be able to compare policies from all the major insurance carriers you are familiar with today. Anthem, United Health One, Aetna, Kaiser Permanente, PacifiCare, Assurant Health, Rocky Mountain Health Plans, BlueCross BlueShield, Cigna, and Humana are presently among the providers serving the Colorado population under the HE program.
So even though the face of health care isn’t changing in ways we might think of a government run health care system, big changes are on the horizon. Health care costs are continuing to rise. Businesses are faced with offloading more of that increased cost onto the employee, and insurance providers are raising rates through premium ‘incentives’ and price trends, which are steady at around 7 – 7.5% per year for the last few years.
Some businesses are even considering getting out of the insurance benefits all together. The bottom line for both business and the individual consumer is that the trends are unsustainable. We will quickly reach a point where providing health benefits to employees as a large or small business will kill the company, and likewise, the amount of take-home pay for the average middle-class employee will become insufficient to cover the cost of premiums in lieu of all the other living expenses. If predictions hold, a family of four will spend around $64,000 annually on health care in the next seven to nine years.
We cannot look to the health care system as we know it to fix these trends in rising health care costs. From a business perspective alone, the health care industry is labeled as a ‘High Growth Industry’ by the US Department of Labor. It is a system built on ‘sick care’ and in the long run, these costs will bury American business and the American employee.
“No company will be successful in the global marketplace without healthy and productive people. If we don’t do it, someone else in the world will and our competitive advantage and our way of life will be lost.”
- Dr. Dee Edington
Employers are taking different approaches to managing escalating health care costs:
- Switch providers
- Eliminate benefits
- Formally limit employee benefits
- Shift costs of benefits to employees
- Create incentives to voluntarily limit employee health spending through HSA’s, etc
- Become part of a purchasing coalition
- Provide disease management services
- Expand benefit coverage to include preventive services
- Establish a comprehensive wellness program
“Switching providers is like reorganizing the deck chairs on the Titanic”
– Dr. David Hunnicut, president of WELCOA
Corporate Wellness programs are sustainable and effective in combating the costs of unhealthy employee populations.
Chronic disease is the most costly and the most preventable health care expense. What we know to be true in all cases is that an increase in the number of health risks directly translates to higher medical care expenses. We also know that a well-designed worksite wellness program typically pays for itself in the savings generated in reduced chronic ‘sick care’, and often generates a surplus beyond the cost of a wellness program.
Additionally, the primary difference between ‘sick-care’ and wellness behavior change is the simple fact that we are addressing the root of the problem instead of making the symptoms of the disease more comfortable to live with.
Let’s look at a simple example of how it might work:
The Health Enhancement Research Organization (HERO) did a study showing the difference in projected medical expenses for individuals classified as “high-risk” compared to those classified as “low-risk” as they relate to specific chronic diseases.
If we look at the high-risk population alone, we can calculate a return on investment (ROI) by identifying the prevalence at baseline and either target (forecasting) or measure change as part of program implementation. The sample below is from a large employee population where prevalence denotes the number of employees diagnosed with the specific chronic condition. ‘# Change’ is the number of those employees who went from a high-risk classification to low-risk. We restate the risk difference calculated in Figure 1, followed by the savings as a simple multiple of the risk difference.
So you have to be asking, “What qualifies as a comprehensive wellness program?”
This is where the soup gets a little murky. Comprehensive wellness programs defined in theory are:
“…those that provide ongoing, integrated programs of health promotion and disease management that integrates specific components into a coherent, ongoing program, which is consistent with corporate objectives and includes program evaluation of clinical and/or cost outcomes.” – Kenneth R. Pelletier, PhD, MD
WELCOA’s Seven Benchmarks of a comprehensive wellness program offer more clarity as we develop any new or renewing wellness plan. These seven benchmarks are by far the absolute must-haves for any wellness program targeting health outcomes.
- Capture Senior Level Support
- Create Cohesive Teams
- Collect Data
- Craft an Operating Plan
- Choose Appropriate Interventions
- Create Supportive Environments
- Carefully Evaluate Outcomes
Our experience at FitNut concurs with the WELCOA formula. The absence of any one of these benchmarks can derail even the best wellness program design. Wellness programs are the best solution to combat our health care crisis, but it takes genuine effort, planning, and design. You cannot expect to throw the food pyramid and a couple of fitness classes at your employees and expect change. A comprehensive program addresses worksite culture, leadership, dedicated vision, and measurability. We cannot expect to continue doing things the same and expect different results. The medical industry is not going to save the American business industry.
Change is coming. Get in front of the movement or you might just get run over.
The FitNuts are in the field RIGHT NOW helping companies develop and increase participation in their corporate wellness programs.
Using a comprehensive planning formula, we make sure that your employees have effective options for exercise, eating and mindset! If you would like to find out more, check out our FREE 2 Hour Corporate Wellness Evaluation offer!