By Jennifer Bundy-Cobb
CEBS, VP/Sr. Employee Benefits Advisor
The Wilson Agency, A UBA Partner Firm
In the March issue of Benefits Selling, I read “Wellness programs save big on health costs.” This article discussed a study published by the Journal of Occupational and Environmental Medicine. The study suggested if seven of the most common risk factors were reduced, medical expenses would decrease anywhere from 18-28 percent depending on the age of the person, and thus provide a savings to an employer’s health plan. This is information we have been hearing for many years and, while determining the ROI of a wellness program is near impossible especially in the short-term, it is the same information we and thousands of employers have used in an attempt to control costs.
The problem is most wellness programs target behavior change, most of which are realized in the long run. For example, if I encourage people to quit smoking, that’s a good thing and the hope is it will have a positive effect on my health care costs. However, the more expensive health care implications of smoking typically don’t show up until people reach their sixties. This may be well after my group of 40-something smokers stop working for me, and thus will never impact my health care costs – a lot of work with little to no return.
The truth is there are other influences on health care spending that don’t have much to do with healthy behavior, including:
- Design of benefits
- Work environment
- Practice patterns of providers
- Employees’ orientation toward care-seeking
Don’t get me wrong, we like wellness programs and I’m all for choosing and promoting a healthy lifestyle. There are a lot of positive aspects to wellness programs, not the least of which is team building and motivation, which serve to improve the work environment. However, if you’re looking for ROI, it’s a lot like trying to find a light switch in a dark room: There’s a lot of trial and error and it can take a long time to find that switch, if you ever can.
Over the past year our firm has been working with a group of people that is approaching benefits in an entirely different way, one that will change this game forever. By using Big Data, in a system called Data Smart, we have been able to uncover some very unlikely strategies that employers can use to save money on their benefit plans in the short-term. Some of these strategies can be applied across all employers (take the smoking example above), but its true value lies in the unique data on each individual group. It takes the Medical Home advantages to a whole new level by integrating service providers and regression analysis to provide significant intelligence about the potential risk and what can be done about it.
Even without these advanced analytics, be sure you’re getting the best out of your plan by working with your advisor about your plan design, educating your staff about how and when to use their benefits and building a positive work environment.