The insurance industry and the federal government appear to be at war. They aren’t. Sure, there are times when a Congressman or the President may by vilifying my industry or some CEO is denigrating an entire political party, but these are just words and much of it is for show. As Sam Donaldson once remarked, “This is Washington. Only the amateurs get mad.” The government needs the insurers. And we all need the government.
The government / insurance industry partnership manifests itself in a number of ways. Today we are going to explore WELLNESS.
In my March 23, 2009 post, Protect Me From Myself, I discussed how my industry has been pushing Responsibility. If you would only take better care of yourself, quit smoking, and exercise more, your health care costs would decrease and your insurance might be more reasonable.
Allegedly, 75% of all claims are due to lifestyle. That’s our number and we are sticking to it.
The government has decided to test the theory. Employers are being encouraged to institute Outcome Based Wellness Programs. The employer hires an outside contractor to come in the factory or office, mostly factories, and meet with each employee. The goal of each interview:
Complete a comprehensive health care questionnaire
Record the employee’s height and weight
Take the employee’s blood pressure
Draw blood for comprehensive lab tests
Armed with this information, the wellness company can now coach the employee to quit smoking, lose weight, or better monitor his/her blood pressure. The employer is allowed to set goals for the employees and charge up to 20% more for the company’s health insurance for non-compliance.
One of these contractors, Bravo Wellness, has a helpful DVD that explains the concept. The featured employer set goals for his employees targeting:
Body Mass Index
He penalized the employees who either fell short or chose to not participate.
Programs like this require both the carrot and the stick. Employers are encouraged to incentivize (pay) their workforce to take the initial exam and screenings. People don’t rush to disclose their health information. One contractor told me that the going rate was $300. Armed with this info, the employer can institute programs to encourage better behavior.
According to the National Association of Health Underwriters Corporate Wellness Certification Program, the return on investment (ROI) on Wellness is projected as:
34% – Increased Presenteeism
25% – Reduced Medical Costs
36% – Reduced Absenteeism
5% – Reduced Disability and Workmen’s Comp claims
Seventy percent of the projected return on investment of Wellness programs are from a reduction in absenteeism and an increase in presenteeism. In other words, fewer people will call off work and those who do show up will be more focused and productive if you have a Wellness program. The other thirty percent comes from reduced medical, disability, and Workmen’s Compensation costs.
Are there enough measurable gains to make this worthwhile for an employer or is this just a gimmick? The answer – it depends. A small employer, where the owners interact with the workforce on a daily basis, might find the intrusion into the employees’ personal lives uncomfortable and inappropriate. Large employers might have no difficulty imposing a company’s lifestyle values, such as no smoking or a 27 BMI, on their faceless workers.
And that brings us back to the government. We are getting mixed messages from this administration. As the federal government berates insurers for charging extra for preexisting conditions, it also welcomes penalties for lifestyle conditions such as uncontrolled cholesterol. This may be the test run for future government run health care programs. Will the federal health plans charge these people extra? Will the feds equate a 22 BMI with a good driving discount? Will Uncle Sam be monitoring your weight?
There’s a plate of Christmas cookies on the table. Did you ask your boss or the government if two would be OK?