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EMPLOYEE RELATIONS: Start now to cut healthcare costs

An ounce of prevention can save money

By Richard D. Galbreath

The ever-increasing cost of health insurance is one of the biggest concerns of companies of all sizes today. Many organizations, out of necessity, are shifting more of the cost to their employees in the form of higher deductibles, copays, coinsurance, premiums and other changes. This accelerating trend is driving both healthy and unhealthy employees off company-sponsored health insurance – sometimes to the rolls of the uninsured.

Angst over the impact of medical malpractice suits, the price tag of new technologies and rising charges for pharmaceuticals is rife today. Unfortunately, much of the concern about these concerns is misplaced. We are treating symptoms of other diseases, not the main causes of this one.

While we have been pointing fingers at one villain after another since the 1970s, the cost of healthcare has been steadily increasing. Arguments over who is to blame have not brought about a workable answer. Additionally, I’ve seen a steady procession of healthcare system “savers.” All have subsequently failed to stem the tide of higher costs.

We know the most fundamental and potentially changeable cause of the increase in healthcare cost, yet there is very little effective action being taken today to address this cause. Our employees continue to overeat, under-exercise and make other less-than-optimal lifestyle choices which have a direct impact on your healthcare plan claims experience.

A study sponsored by the Center for Disease Control shows that obesity-related illnesses cost America as much as the cost of treating smoking-related diseases. This study found that the cost of healthcare for obese people is 37 percent more than for individuals of normal weight. The study calculated that obesity adds an extra $732 per capita each year to healthcare costs in America. Physicians assert that obesity is one of the primary causes of America’s rising healthcare costs.

While companies can’t force employees to take better care of themselves, we must take action. As America continues to age, costs will exceed many companies’ and individuals’ ability to pay. Impacting how each employee thinks and, more importantly, acts about his or her personal wellness is the only chance we have to improve the situation.

For years, American business has taken a hands-off approach to the physical condition of their workforce. We are paying for our employees’ lifestyle choices. However, we aren’t treating it like other business expenses.

While the cost of a first class wellness program, for example, is a small fraction of what can be saved as a result of it, when it comes time to implement one, we don’t. We are pressed every day with existing costs. How can we be expected to add more?

This reasoning, while understandable, is like saving money by not putting oil in your motor because gas costs so much. The breakdown is inevitable. We MUST act now and do something different. We cannot wait for someone else. Taking personal action to do what we can is our only real option.

This path is, of course, not simple. There are dozens of laws that must be competently dealt with, even for the champion of individual freedom and privacy. Focus on what we can do, not what we cannot do.

What To Do

Implement incentives to reward

healthy life style choices

In most workplaces today, the employee who smokes three packs of cigarettes a day, eats potato chips by the carload and gets his only exercise walking to and from the refrigerator pays the same amount for health insurance as the person who exercises three times a week, doesn’t smoke and eats a well balanced diet. If seeking private insurance, the person with unhealthy lifestyle choices would pay significantly more than his healthy counterpart. In employee groups, all pay the same.

Genetics, misfortune and many other factors outside of a person’s control contribute to poor health. While we should not punish those who are unhealthy, we should actively incentivize employees to do those things that have been shown to promote better health and lower healthcare costs.

Many states, including Illinois, allow employees to provide preferred rates to those who exhibit healthier behaviors. While these incentives are less generous than I would like, they are available and should be considered by plans of all sizes.

Get actively involved in wellness

Locate a personal trainer, a nutritionist and healthcare professionals who care about physical fitness and ask them to help you develop a program to increase your employees’ understanding of the value of good lifestyle choices.

Lunch and learn sessions are a good way to start. Have the personal trainer set up workout regimens in which those that volunteer may participate. Have your local healthcare provider do health risk assessments and take baseline medical data on those who volunteer to participate. You nutritionist could provide healthy eating talks and support to those who want to change their lifestyle. Make sure that you set up coaching and regular follow-up sessions to get people off to the right start.

Todd Lowder, owner of Fitness Quest, a Bloomington-based personal and corporate wellness consulting firm, says that “fit employees provide the muscle needed to differentiate your company from all the rest.” He believes “happier and healthier employees cost you less and improve customer service. Programs don’t have to be fancy or expensive – they just must focus on truly supporting people as they make better choices. Once we get people started; they rarely go back to their old ways.”

Get your health Insurance agent involved

Craig Hanson, vice president of Benefit Planning Associates, is actively promoting wellness programs with his clients. “As one of the largest Blue Cross/Blue Shield, Health Alliance, OSF insurance writers in downstate Illinois, we know that we needed to get out ahead of our competition to add more value for our customers,” says Hansen. “Working with others, we developed programs that will help our clients get what they need – relief from unrelenting health care increases and healthier employees. Our clients truly care about their employees and many are interested in trying new things to bring about the changes needed. We decided that this was a unique way that we could really help our clients and we are fully engaged in the process. We consider ourselves a trusted advisor and friend to our clients, and wellness offers them a meaningful way to help control their medical costs.”

One thing that all employers need to remember: wellness is much cheaper than healthcare. If we want more of the first and the ability to maintain the latter, we must do something different.

Richard D. Galbreath

is the founder and president of Performance Growth Partners Inc., a full service organizational development firm. Contact him via e-mail at rick@performtogrow.com

What To Do

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