Workplace Health Programs and Cost Containment

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As health care costs continue to rise – and employers and consumers search for high quality, low cost care – workplace health centers and wellness programs are gaining attention. Proponents argue that because of the time individuals spend at work and the growing emphasis on preventative measures to improve health, workplace clinics and wellness programs may offer an effective solution to some current health care challenges. Health reform legislation currently under consideration by Congress has included language regarding workplace wellness programs. The House bill, H.R. 3962, would create a grant program for employers to strengthen the wellness programs they offer to employees. A provision in the Senate Leadership Bill, H.R.3590, would allow employers to give their employees larger rewards than permitted under current law for meeting their health goals in wellness programs.

Workplace Clinics 

In an attempt to control costs, some employers have created onsite workplace health clinics that offer primary care services to employees at their job location. These clinics offer employees access to a primary care physician, nurse practitioner, or physician assistant for routine medical needs. Often, these clinics have lab and x-ray capabilities, which eliminates travel to receive the services.  Many clinics also contract with specialists and hospitals to improve the overall coordination of care.  

Although the recession slowed many businesses’ plans to establish clinics in 2008 and 2009, firms are showing renewed interest in clinics as a way to realize potential cost-savings.¹ The pharmacy chain Walgreens currently runs 366 on-site clinics for employers under its subsidiary Take Care Health Systems. CVS Caremark Corp. also manages large employers’ workplace clinics.² In other cases firms have established their own subsidiaries just to manage workplace health for their employees.

For example, Quad/Graphics created QuadMed to operate their onsite workplace clinic and wellness programs.³ QuadMed has shown both a reduction in health care costs as well as improvements in employee health. While the company does spend more money than the average employer for primary care services, they make up those costs in reduced emergency department visits and hospitalizations.⁴  

In another example, Pitney Bowes has reported that for every $1 spent on clinics, it not only saved $1 in health care costs, but an additional $1 in increased worker productivity. By not having to leave the worksite to obtain care, clinics help reduce absenteeism and help retain valued employees.⁵ Other studies have shown that people with access to workplace clinics or pharmacies have almost 10 percent higher medication adherence rates compared to those without similar access.⁶ Medication adherence is particularly important in maintaining the health and reducing health care costs for individuals with multiple chronic conditions.

At the same time, workplace clinics have come under scrutiny from those concerned about protecting employees’ medical privacy. Some employees fear that their medical history will be reported back to their employer. To address this concern, QuadMed, clearly states that patients’ medical information will not be shared with the company’s human resources department.⁷ As worksite clinics increase in popularity, workers' medical privacy will continue to be an important issue.

In order to better understand the role of workplace health clinics in the delivery of care, HCFO recently funded Ha Tu from the Center for Studying Health System Change to examine the effectiveness of these clinics in controlling rising health care costs. Tu will look at the structure and organization of these clinics, the return on investment to employers, and the degree to which these clinics are affecting access, quality, and coordination of care. More information on this study can be found at www.hcfo.org/grants/large-employers-use-workplace-health-clinics.

Workplace Wellness Programs

Employers also offer wellness programs that focus on a specific goal such a smoking cessation, diabetes management, or weight control. Recent studies have shown that workplace programs that encourage employees to exercise have been shown to increase fitness levels, cut cholesterol levels, and even reduce job stress and improve performance.⁸ The design of wellness programs varies and may include educational material, incentives that reward participation in programs, or even incentives that reward results. Incentives can be in the form of cash rewards or reduced insurance premiums.

Workplace wellness programs have shown a return on investment anywhere from $3 to $15 per dollar invested, many times within 12 to 18 months of program implementation.⁹ For example, Quad/Graphics’s “Lean You” program, which promotes physical activity, weight loss, smoking cessation, diabetes management, and identification of health risks cost the firm $240,000, but saved an estimated $2 million through early detection of four employees’ cancers.¹⁰ An analysis of wellness programs has realized a 28 percent reduction in the use of sick leave and a 26 percent average reduction in health care costs.¹¹ The potential of such programs is further underscored by the fact that cardiovascular disease and stroke are the leading causes of death in the United States and heart disease costs the country $304.6 billion, with $24 billion associated with lost productivity and $98 billion due to mortality.¹² 

Despite these promising figures, wellness programs may be out of reach for some employers and may be viewed as unfairly targeting specific employees. They are often seen as simply too costly for many small businesses. In response to the economic downturn, some companies have eliminated their workplace programs altogether while others have chosen to keep their programs but reduce the financial incentives they provide to employees who participate.¹³ Another concern is that programs that provide lower premiums or other financial incentives to healthy employees essentially discriminate against those with health problems or risks. 

Health Risk Appraisals

Another tool used by employers to save money and cut their health care costs is the health risk appraisal (HRA). HRAs gather information about a person’s health status, their background and history, and their behaviors. Through HRAs, individuals self-identify personal behaviors and risk factors that can be addressed, often through workplace wellness programs. Implementation of HRAs varies across companies, with some offering incentives to complete HRAs while others mandate them for employees to be eligible for health insurance. HCFO funded Meredith Rosenthal, Ph.D., from the Harvard School of Public Health to examine the characteristics of individuals who participated in HRAs and whether this tool has the potential to influence employee’s behaviors. Rosenthal and colleagues found that HRAs offer employers a potentially more effective tool for managing health care costs than other strategies that rely on claims data to identify high-risk members.¹⁴ The researchers also found that completion of an HRA was not enough to increase enrollment in disease management or wellness programs, and more outreach is needed to help engage these employees and change behaviors. More information on this study can be found at www.hcfo.org/grants/uptake-and-impact-health-risk-appraisals.

Conclusion

As health care costs continue to rise and employers look for creative solutions to control costs, many see the variety of workplace wellness programs, worksite clinics, and HRAs as a valuable opportunity to control costs while increasing worker health and productivity. Current research has the potential to shed more light on this developing field of health care and its potential cost savings to both employers and employees. These programs and clinics hold the potential to help employers struggling with the burden of health care costs while simultaneously creating a healthier workforce.

For related HCFO-sponsored research, see the grants listed below or visit www.hcfo.org.

Title: Large Employers Use of Workplace Health Clinics
Grantee Institution: Center for Studying Health System Change
Principal Investigator: Ha Tu
Grant Period: December 1, 2009 – June 30, 2010

The researchers will explore the workplace health clinic model by examining the following research questions: (1) what are the key motivations and objectives, and major strategies and approaches being used; (2) how are workplace clinics structured and organized and how do they fit into the overall structure of an employer's health benefits; (3) to what degree do these clinics affect the delivery of care, access, quality and coordination; (4) what is the return on investment relative to short and long-term health care costs, as well as indirect costs of absenteeism and productivity; (5) are successful strategies replicable; and (6) are there employer characteristics that contribute to the effectiveness of workplace clinics? The objective of this project is to better understand the full spectrum of employer strategies concerning workplace clinics, the barriers faced by employers, and the impact of different strategies and models on cost containment and care delivery.

Title: Uptake and Impact of Health Risk Appraisals
Grantee Institution: Harvard School of Public Health
Principal Investigator: Meredith Rosenthal, Ph.D.
Grant Period: December 1, 2005 – May 31, 2007

What is the potential for Health Risk Appraisals (HRAs) to engage consumers in health improvement?  HRAs are structured surveys designed to identify a wide range of health risks, including genetic predispositions to disease, poor health habits (e.g. smoking, overweight) and lack of adherence to recommended care for a chronic condition. HRAs allow health plans and employers to engage consumers in health management before acute events occur. Using data from Cigna HealthCare, the researchers addressed the following specific aims: 1) examine the overall rates of HRA completion in a privately-insured population; 2) examine the impact of a consumer financial incentive on HRA completion; 3) examine the characteristics of consumers who opt to complete an HRA; and 4) look for early effects of HRAs on utilization and health behavior. The objective of the project was to help employers and health plans better tailor their outreach programs, evaluate whether to offer incentives, and better understand the impact HRAs will have on enrollee behavior.

1 Wojcik, J. “Interest in Workplace Clinics Cools as Recession Puts Cap on Spending.” Business Insurance, April 6, 2009. www.businessinsurance.com/article/20090405/ISSUE03/100027425
2 McQueen, M. “Workers Get Health Care at the Office.” Wall Street Journal, page D1, November 18, 2008. http://online.wsj.com/article/SB122696833222435529.html
3 McCarthy, D. “Case Study: QuadMed – Transforming Employer-Sponsored Health Care Through Workplace Primary Care and Wellness Programs.” Quality Matters, The Commonwealth Fund, September/October 2009. www.commonwealthfund.org/Content/Newsletters/Quality-Matters/2009/Septem...
4 Ibid.
5 McQueen, M. “Workers Get Health Care at the Office.” Wall Street Journal, page D1, November 18, 2008. http://online.wsj.com/article/SB122696833222435529.html
6 Sherman, B. et al. “Impact of Workplace Health Services on Adherence to Chronic Medications.” The American Journal of Managed Care, Vol. 15, No. 7, July 2009, e53-59.
7 McCarthy, D. “Case Study: QuadMed – Transforming Employer-Sponsored Health Care Through Workplace Primary Care and Wellness Programs.” Quality Matters, The Commonwealth Fund, September/October 2009. www.commonwealthfund.org/Content/Newsletters/Quality-Matters/2009/Septem...
8 Harding, A. “On-The-Job Exercise Good For Employee and Employer.” Reuters Health, October 28, 2009. www.reuters.com/article/healthNews/idUSTRE59R52K20091028
9 Carnthon, M. et al. “Worksite Wellness Programs for Cardiovascular Disease Prevention: A Policy Statement From the American Heart Association.” Circulation, Vol. 120, Issue 17, October 27, 2009, 1725-1741.  
10 McCarthy, D. “Case Study: QuadMed – Transforming Employer-Sponsored Health Care Through Workplace Primary Care and Wellness Programs.” Quality Matters, The Commonwealth Fund, September/October 2009. www.commonwealthfund.org/Content/Newsletters/Quality-Matters/2009/Septem...
11 Carnthon, M. et al. “Worksite Wellness Programs for Cardiovascular Disease Prevention: A Policy Statement From the American Heart Association.” Circulation, Vol. 120, Issue 17, October 27, 2009, 1725-1741.
12 Ibid.  
13 Petrecca, L. “Cost-Conscious Companies Re-Evaluate Wellness Programs.” USA Today, June 19, 2009. www.usatoday.com/money/workplace/2009-06-16-wellness-programs-companies_...
14 Huskamp, H. and M. Rosenthal. “Health Risk Appraisals: How Much Do They Influence Employees’ Health Behavior?” Health Affairs, Vol. 28, No. 5, September/October 2009, 1532-1540.