Handout that accompanied my 2014 Trustmark Producer Conference keynote address.

1. How
Wellness
Can
Transform
Your
Benefits
Solutions
By Carol Harnett
Many Americans believe they are against health care reform and the Affordable Care
Act (ACA). Yet, researchers and comedians such as Jimmy Kimmel alike demonstrated
that when you break the ACA down into its component parts, people universally like the
tenets behind the law. As Kimmel quipped, it’s the opposite experience of what happens
when you find out what’s inside a Chicken McNugget – you actually like the ingredients.
For many in the health and insurance-related industries, health care reform is less about
being against the elimination of pre-existing condition provisions and more about the
impact the ACA is having on their jobs. Some industry organizations speculate that the
number of insurance brokers could slip dramatically in as little as five years.
However, as with everything in life, opportunity exists inside every challenge. And health
care reform is fraught with potential for new consulting opportunities and businesses.
One of the most-cited ACA cost-containment provisions in the group insurance space is
in the area of wellness. Using the fact that the United States could decrease at least 75
percent of its health care costs if the American lifestyle embraced at least 10,000 steps
a day and fewer trips to fast food restaurants for each resident, employers have carte
blanche to financially reward employees who meet certain health standards, or shift
more costs to employees who don’t change their ways. That’s where one of the major
consulting opportunities lies.
But, there is a “however” that I must insert here. Currently, employer-based wellness
initiatives are facing a conundrum.
On one side of the equation, we believe that if all Americans were normal-weighted,
tobacco-free, daily exercisers, regular fruit- and vegetable-eaters and minimal
consumers of alcoholic beverages, health care costs in the United States would ring in
lower than they do today.
Juxtaposed against this projection, is the fact that only 3 percent of Americans – 1
percent of men and 2 percent of women – are able to execute all of the abovedescribed behaviors on a regular basis. And this happens despite our best efforts to
“nudge” people toward better behaviors.

2. This is where consultants and brokers come in. People in these roles can help
employers vet out the best way to approach wellness in the workplace.
I maintain a prejudice that brokers who never consulted in this area before have an
advantage. They can enter the field, take an objective look at what’s transpired to date
and render an opinion from there. Without an emotional tie to the topic, objectivity can
become a selling point.
So, where do you begin?
First, help employers do no harm.
According to the Tufts-New England Medical Center's comparative effectiveness
database, less than 20 percent of prevention strategies produce cost savings and
10 percent do harm. Employers need to make certain they do not promote initiatives
that may cause their employees or retirees adverse effects that are worse than not
having a test or not knowing they have a condition. Two of the best current examples
are the promotion of mammograms and PSA testing, especially outside of the
recognized guidelines. Brokers can help employers sift through these programs.
Carol A. Harnett
http://about.me/carolharnett
2

3. Help employers find the programs that produce cost savings.
If you are new to consulting on workplace wellness programs, you need to appreciate
that there is a new mantra in town: Wellness doesn’t save employers money.
A growing number of long-time employee benefits, economics and wellness leaders are
touting this line loudly and are publicly questioning the money employers spend on
wellness programs. These people include brand-name speakers such as Tom Emerick
(retired global leader of benefits design for Walmart) and Al Lewis (president of the
Disease Management Purchasing Consortium). Together, they recently wrote a book
called, Cracking Health Costs, which is causing enormous debate in some circles – so
much so that long-time industry expert Ron Goetzel felt compelled to present a webinar
entitled, Wellness Critics Attack! Understanding What is Fact and Fiction.
As referenced previously, however, approximately 20 percent of wellness and
prevention strategies and treatments produce cost savings (so, programs exist that
save money), while 70 percent are considered “cost-effective.”
Carol A. Harnett
http://about.me/carolharnett
3

4. So, what does cost-effective mean?
According to Milton Weinstein of the Harvard School of Public Health: “The World
Health Organization has a rule of thumb: Three times per-person income per qualityadjusted life year gained is a cost-effective intervention. In [the United States], perperson income is about $40,000, so an intervention that costs less than $120,000 per
quality-adjusted life year would be considered cost-effective according to the WHO
rule. David Cutler, the Harvard economist, has suggested $100,000 as a reasonable
value.”
Brokers can incorporate the concept of cost-effectiveness to help employers make
decisions about how to promote wellness and prevention in the workplace.
Carol A. Harnett
http://about.me/carolharnett
4

5. Make certain that wellness initiatives link with other programs that help
employees address life issues.
A lot of the time invested in wellness program development has focused on behavior
change without much consideration given to the barriers that get in the way of people
developing new habits. While employees understand they are overweight, out of shape
or have elevated HbA1c levels, they often can’t problem solve how to address these
issues and take care of the elderly parents, or manage financial problems, or deal with
personal relationship troubles.
The Eliza Corporation in partnership with the Altarum Institute studied and tested the
concept of life obstacles such as caregiving, financial stress and relationship problems
and how they interfere with health. These life events combined with behaviors that
make them worse (sleep issues, feeling sad or down and/or substance use) and factors
that make them easier to cope with (social support, spirituality and exercise) can make
employees more or less vulnerable to how they perceive their health and use the health
care system.
The best wellness programs offer employees and their dependents the option to talk
with live counselors (often called health coaches or nurse coaches) who can assist
Carol A. Harnett
http://about.me/carolharnett
5

6. people in dealing with their life obstacles or live transfer employees to resources that
may help them (at minimum, transfer them to an employer’s employee assistance
program).
Help employers understand the value of investment of wellness programs by
including measures that are broader than health care spending.
Emerick and Lewis are not lone voices in the area of questioning the return on
investment of these initiatives, but there is another way to consider wellness efforts.
Dee Edington, one of the original, modern-day wellness researchers revised his
viewpoint on the impact of wellness in the workplace about seven years ago. Unlike
Emerick and Lewis, however, Edington believes wellness initiatives still possess value –
but we need to measure their impact differently.
"Wellness puts all its money on behavior change," Edington shares. "And employers
place all their attention on the workforce instead of the workplace – even though
recidivism is so high."
Edington thinks wellness programs can't save enough in health care costs to make a
difference – "maybe $200 to $300 [per employee each year], at best" – but he believes
a wellness initiative can create shareholder value.
How? By increasing job satisfaction, happiness factors and creating a great place to
work. By association, according to Edington, wellness programs raise employee loyalty,
decrease turnover and increase creativity and productivity. And that's good for the
business' bottom line.
Edington and others – including Bob Merberg from Paychex – are proposing that,
instead of linking wellness programs to changes in health care costs, employers should
follow metrics such as increased employee motivation, engagement, retention,
attendance and productivity instead.
What underlies this new perspective is a shift in focus to the value of investment – not
the return on investment – of wellness programs.
But how can brokers and other help employers turn what feels like rhetoric into practical
tactics and an overall strategy?
Let’s start with a basic overview of what we mean when we reference prevention and
wellness programs.
Prevention breaks down into two major buckets: primary and secondary prevention.
In primary prevention, your focus is to encourage employees to maintain as many
healthy behaviors as possible – before they have a medical episode or acquire a clinical
diagnosis. The message to these employees is simple: “Keep up the good work.”
Carol A. Harnett
http://about.me/carolharnett
6

7. In secondary prevention, you are trying to get employees who may have newly
diagnosed medical conditions such as hypertension or diabetes, or have recently
experienced a medical event such as a heart attack (myocardial infarction), to consider
changing their behaviors. And the behaviors you want them to embrace are activities
like eating well, exercising regularly, eliminating their use of tobacco products and/or
moderating how many alcoholic beverages they drink on both a daily and weekly basis.
This is no small feat. The message here is more complicated and somewhat emotional:
“If you want to live to enjoy retirement, you need to make some changes.”
Now, one of the biggest areas where employers make mistakes when it comes to
prevention, health and wellness programs is confusing surveillance and population
health measurement programs with wellness activities.
Surveillance programs include measurement activities such as completing health risk
assessments (HRAs) or participating in biometric screening (blood tests that measure
items such as glucose or cholesterol levels) and preventive physical exams.
In contrast, wellness initiatives can run the gamut from traditional smoking cessation,
exercise and weight loss programs to customized approaches that can include walking
meetings, vending machines that feature fresh produce and healthy snacks and home
delivery of healthy meals to employees and their families.
Essentially, surveillance programs give employers a baseline measurement of their
employees’ current health statuses and either have no impact on health care costs, or,
by some estimates, have the potential to increase costs through false positive results,
which lead to additional medical testing.
Wellness programs are largely found to have little to no financial return on investment
when it comes to health care costs on an aggregate basis, although as previously
referenced, they have the potential to positively impact employee productivity and
morale.
So, how can you help employers who already invested in wellness programs with the
hope to either save health care dollars or maintain health care costs?
All is not lost. As my friend and mentor, Harvard Medical School’s Ron Kessler, always
counsels, ROI is extraordinarily local. But it can be achievable in small dollar amounts
and can also add to the value on investment.
Here’s how you begin.
Start any wellness initiative with a focus on acute prevention.
Profit centers can be found around acute prevention; in other words, an intervention,
which produces an almost-immediate savings.
Carol A. Harnett
http://about.me/carolharnett
7

8. If the employer’s workforce turns over every three years, you can't focus on chronic
prevention initiatives that may reduce risk 20 years from now. Employers need to focus
on the time window of effectiveness. Acute prevention yields the best ROI when it's
focused on challenges like seasonal allergy management, and accident and injury
prevention. In fact, there's a connection between seasonal allergies and the rate of
accidents.
Accidents go up during the allergy season. Employees may take a sedating over-thecounter medication like Benadryl, which can be the equivalent of drinking three alcoholic
beverages. Making certain that workers use non-sedating medications is a direct
method to cut down on the accident rate.
Brokers can help employers influence their employees' accident and injury rate -- both
on and off the worksite -- by making certain the pharmacy-benefit formulary is
comprised of non-sedating allergy medications.
Pay attention to accidents and injuries.
One place where everything comes together – acute prevention, chronic-condition
management, safety and legal costs – are accidents and injuries.
About one in five accidents is caused by a chronic condition. For example,
musculoskeletal conditions can lead to falls, and untreated ADHD can lead to four times
as many car accidents.
Employers should consider investing in treatment for certain types of conditions that are
particular to a large number of their employees and can result in increased risk for
accidents and injuries. Using an experimental prevention study design, employers can
follow whether treatment brings down the injury and accident rate almost immediately.
This type of approach is much more likely to yield a positive ROI than trying to help
employees lose weight.
Look for wellness and prevention initiatives that keep employees out of the
emergency room, out of the hospital and/or get employees out of the hospital as
soon as it is safe to do so.
If an employer needs to maintain or reduce health care spending, start your analysis
with the employees’ use of hospitals. The long-time mantra in addressing health care
costs is to keep employees out of emergency rooms, avoid unnecessary hospital
admissions and, if an employee or their dependent is admitted, get them out of the
hospital as quickly as possible. The third item is as much a safety issue as it is a cost
concern. At any given time, about one in 20 patients has a hospital-acquired
infection -- and this results in about 100,000 deaths every year.
Carol A. Harnett
http://about.me/carolharnett
8

9. Use publicly-available data to make annual decisions about targeted health and
wellness programs.
Flu-shot programs are often brought up as a sure-fire way to achieve a ROI.
There is good data available about flu shots. You can make a clean decision about
whether an employer should offer a worksite-based program and pretty quickly
determine whether the initiative had an impact afterward by following the accident and
sickness rates during the flu season.
The challenge with flu-shot initiatives is you have to make an educated guess –using
information from the CDC and others – about whether it will be a bad flu season. If
there's a high flu rate, the employer will easily make back the costs. But, if it's not a bad
flu season, the program won't pay for itself that year.
You should also help employers factor in how easily their staff is replaced and the
impact increased worker absence has on the business. In the high-tech industry, it
makes sense to have an annual flu-shot program. But it may or may not show an ROI in
companies that rely heavily on hourly workers.
And don't forget about employees’ stress levels, mental health and happiness.
No area has captured more attention in the employee health and wellness space than
employee happiness. However, given the economic status of the United States for the
last five years, little has been accomplished in this area.
For several years prior to the economic downturn, I was involved in research that
demonstrated that employees who worked for companies that landed on lists such as
Fortune’s Best Companies to Work For were at work more often. And preliminary
research indicated they spent less money on health care despite their health status. For
the actuaries with whom I worked – and researchers like Edington – understanding
employees’ happiness and life satisfaction levels has become the holy grail to
appreciating what may address health care spending and increase employee
attendance, customer service and productivity.
While much is made about what large employers, such as Google, Inc., SAS and
Wegmans Food Market, Inc. do to ensure happy employees, small- and medium-sized
companies are also demonstrating effective interventions that may be called wellness
interventions of the future. The following examples are taken from the Great Place to
Work’s Best Small and Medium Workplaces List.
•
•
INTUITIVE Research and Technology Corporation: Managers are held
accountable when their direct reports don’t take enough time off.
Badger Mining Corporation: With hunting season a near-sacred affair in
Wisconsin, employees who come to work on opening day are paid double-time,
showing that the company understands the sacrifice.
Carol A. Harnett
http://about.me/carolharnett
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10. •
•
•
Walker & Dunlop: Provides employees with 48 hours of PTO per year to
volunteer.
McMurry: Grants unlimited PTO for bereavement.
EILEEN FISHER: Each employee is given $2,000 to support their personal
growth through self-selected education and wellness programs.
What is important to keep in mind with each of these approaches is that many are
customized to the employer’s unique population and environment.
Small steps may lead to big rewards.
B.J. Fogg (a part-time Stanford University professor and social scientist who focuses on
the overlap between persuasion and computers and mobile phones to foster behavior
change), is currently doing work on something he calls, “3 tiny habits.” Fogg’s approach
combines triggers with small steps – or habits – that may lead to larger behavior
changes.
If sustainable behavior change is an employer’s goal, the use of small steps and tiny
habits may become the ultimate way to achieve success. It may also help employers
realize a wellness strategy that embraces the value of investment.
Carol Harnett is a widely respected consultant, speaker, writer and trendspotter in
the fields of employee benefits, health and productivity management, health and
performance innovation, and value-based health. Follow her on Twitter via
@carolharnett and on her radio show, CoHealth Checkup.
Resources:
(1)
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CoHealth Checkup radio broadcast archive:
http://www.blogtalkradio.com/cohealth-checkup
Human Resource Executive Employee Benefits Column:
http://www.hreonline.com/HRE/browse/Benefits%20Column.jhtml
B.J. Fogg’s 3 Tiny Habits: http://tinyhabits.com
Great Place to Work Best Small and Medium Workplaces:
http://www.greatplacetowork.com/best-companies/best-small-a-mediumworkplaces
Fortune’s Best Companies to Work For:
http://money.cnn.com/magazines/fortune/best-companies/2013/list/
Tuft’s – New England Medical Center’s Comparative Effectiveness Registry:
https://research.tufts-nemc.org/cear4/
The Employee Wellness Network Blog by Bob Merberg:
http://employeewellnessnetwork.com
Carol A. Harnett
http://about.me/carolharnett
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