Companies Find "Culture of Health" Pays Dividends

Bob Carey, Executive Director of the Employers Action Coalition on Healthcare, says that businesses can cut health care costs by rewarding workers who adopt healthy lifestyles:

State and federal policymakers searching for ways to control health care costs might take a closer look at the health management strategies used by a number of large employers.

Leading-edge companies are keeping their health insurance costs in check by using a multi-pronged approach that incents employees to take greater responsibility for their health, promotes early detection and prevention, rewards healthy lifestyles, and establishes a “culture of health” throughout the organization. Two supermarket chains – Hannaford Brothers and Safeway – offer examples of ways that employers are making a difference.

Safeway’s Healthy Measures program differentiates employees’ premiums based on tobacco usage, healthy weight, blood pressure, and cholesterol levels. Employees who choose to participate — the program is voluntary — are tested for these four measures and can receive premium discounts for each test they pass.

Passing all four tests reduces annual premiums by roughly $800 for individuals and $1,600 for families.

The company reports that its employees’ obesity and smoking rates are roughly 30% below the national average. And, the company’s health insurance costs have remained constant over the last four years. (Safeway's CEO offers more detail in this Wall Street Journal opinion piece.)

Hannaford Brothers, a Maine-based food retailer, uses a similar approach to improve employee health and control health care costs. Hannaford employees who complete a health risk appraisal and participate in health improvement programs can save $1,000 on their annual premiums. The company’s strategy also includes on-site health promotions, health care cost transparency, and provider tiering, among other initiatives.

The results: Hannaford reports that its health insurance costs declined 11% over a three-year period. For employees, the results have been just as impressive. In the first year of the program, 26% of Hannaford workers were at risk of high cholesterol. In year two, that number was cut in half. The percentage of employees who smoke was reduced from 20% in year one to 10% in year two.

These employers didn’t achieve these results overnight, and it takes more than a financial incentive or a single health promotion program to change behavior and engage employees. It requires a shift in how employers think about the health benefits provided to their employees, and a shift in the health behavior of employees, spouses and dependents.

Employers that have successfully implemented employee health management strategies are led by senior managers who are focused not just on the cost of health insurance, but more broadly on the health of their workforce. They build a healthy work environment; they engage their employees, providing education and access to health information throughout the year; and they provide their employees with decision support tools to help them navigate what can be a confusing and complicated health care system.

What is keeping more employers from adopting these types of health benefits?

The Employers Action Coalition on Healthcare (EACH) — a group of employers, providers and insurers that is working to reduce health care costs — aims to find out and help knock down the barriers to adoption.

Changing the way employers offer health benefits to their employees and engaging employees in their health isn’t a silver bullet. But it can be an important part of a broader effort to rein in health spending.

To that end, EACH is also working on ways to reduce unwarranted variation in care, simplify and standardize administrative processes, and advance the use of comparative effectiveness research to inform patients and promote effective and efficient care.

The state’s health reform law was built on the premise of “shared responsibility.” Controlling health care costs will require a similar approach.