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Innovation April 21, 2016
Does “corporate wellness” seem like an oxymoron sometimes? “Corporate” makes one think of people in suits going to meetings, downing coffee and grabbing lunch on the go, while “wellness” makes one think of meditating, yoga, and salads.
But the reason corporate wellness programs continue to grow in popularity throughout the business world is that they can lower employer health insurance costs, improve employee productivity (reduced sick days and the like), and generally have low upfront investment costs. For all these reasons, corporate wellness programs are growing in popularity and also tend to have a high ROI.
The catch? To get that high ROI, you have to get people to enroll in and stick with the corporate wellness program, or else your investment is wasted. And technology is one way to help make a wellness program stick.
On January 1, 2015, the Employer Shared Responsibility provisions under the Affordable Care Act went into effect. The provisions required applicable large employers, or ALEs, to offer “minimum essential coverage” to full-time employees and their dependents or pay a fine, which is called an employer shared responsibility payment.
While some employers are trying to skirt this law by reducing the number of full-time employees and increasing their workforce with more part-time employees, many ALEs have been compliant. This is because the consensus on the role of health and wellness programs in the workplace is changing. Study after study shows a clear correlation between employee productivity and employee health and wellness – and CEOs are finally starting to take notice.
For employers who do offer health benefits, it just makes sense to keep employees healthy to cut down on healthcare costs. For one, it’s certainly not cheap to go to the hospital these days. According to a 2015 report by International Business Times, hospitals have been increasing their prices up to 10 times more than what they charge as Medicaid rates for common medical procedures.
In addition to rising hospital rates, annual premiums for employer-sponsored health insurance have also gone up. According to the Kaiser Family Foundation, in 2015, the average annual premium for employer-sponsored health insurance rose 4% over the 2014 average premium. During the same period, workers’ wages increased 1.9% and inflation declined by 0.2%. All these percentages add up to increased health costs for employers.
Enter corporate wellness programs. The goal is to drive down healthcare costs by keeping employees healthy. It’s certainly not a new concept. However, as the healthcare industry focuses on reducing costs while improving health outcomes (two of the main goals of the ACA), people are paying more attention to the numbers. And the numbers say that prevention is a lot cheaper than reacting to and treating illness.
Dr. Ron Goetzel, an expert in health and productivity management, was quoted in an article about corporate wellness for the Harvard Business Review as saying, “Companies are a microcosm of society and an important and unleveraged setting for health improvement and risk reduction.”
In other words, because it touches every socio-economic layer of society, corporate America is in a unique position to take up this standard of healthcare for prevention and wellness, not just treating sickness.
Inc. Magazine recently listed corporate wellness as 1 of 8 best industries for starting a business in 2016. Specifically, corporate wellness programs are forecasted to skyrocket between now and 2020. One of the things driving this growth is businesses looking to lower their healthcare costs.
One of the reasons Inc. gives for the popularity of corporate wellness programs is the high ROI. The article claims that investment in disease management programs (a subset of corporate wellness programs) can deliver an estimated ROI as high as $3.80 in savings. (That number comes from a study from RAND Corporation. However, the study also points out that other components of corporate wellness programs can yield a much lower ROI, averaging out to about $1.50 overall. ROI numbers vary widely, depending on the source.)
Corporate wellness offers other benefits. Fortune published a great piece on the hallmarks of great corporate wellness programs, touting beneficial health outcomes like smoking cessation, weight loss and obesity prevention, diabetes prevention and management, blood pressure management, cholesterol management, and stress management. These health benefits translate to business outcomes like lower absenteeism, higher job satisfaction and work productivity, higher employee retention, and lower healthcare costs.
A study by the ASPE reports that “60 percent of employers offering a wellness program stated that their programs reduced healthcare costs”. Around 80 percent “reported that they decreased absenteeism and increased productivity.”
So to recap:
It doesn’t take a mathematician to see that the corporate wellness industry is poised to boom. That means more options for employers who want to explore this option for their own employees.
Attitudes towards health and wellness overall (not just corporate health and wellness) are changing, shifting from treatment to prevention. And smartphone and tablet technology is playing a role in that shift of consumer mindset. In 2014, Nielsen reported that almost one-third of U.S. smartphone owners, which is about 46 million unique people, used apps from the fitness and health category in January 2014. Health apps are making huge impacts on our lives. As they become more and more popular, the amount of health data being collected continues to grow.
People are interested in taking control of their health and fitness. What they’re not interested in is a corporate wellness program that feels like their employer is just trying to shame them into losing weight and becoming healthier to save the company’s bottom line.
The ASPE study mentioned earlier cites that only 46 percent of employees in organizations with a wellness program undergo clinical screenings and/or complete a Health Risk Assessment (HRA). Even fewer participate in interventions (ranging from 7 to 21 percent). Some for the reasons for not participating in company wellness programs, according to the study, were a lack of:
The problem with many wellness programs is that it’s not built into the company culture; it’s more of an afterthought. It’s like the pile of coupons you get in your goody bag at an event – you’ve got to dig through all of the crap and fine print to find any value (and really, are there ever any good deals in there?). Your corporate wellness program should not feel like a salesly participation coupon in a goody bag.
Many successful corporate wellness programs are taking a page from the UX designers’ handbook to ensure that the programs they are building are easy to use and fit as seamlessly as possible into people’s lives. People use health and wellness apps, because they engage them in the right way and are easy to use.
User engagement is the fuel that makes consumer technology catch on and grow. If you think about the wellness program you are building as a non-transactional consumer platform, Sarah Tavel’s hierarchy of engagement can be a very effective model to use. The hierarchy has three levels:
The hierarchy of engagement is a way to create a virtuous loop in which your product becomes self-perpetuating. In the world of corporate wellness, that means ensuring your program is used regularly and your employees are taking preventative measures to improve their health. And, they are doing it in a way that excites and encourages them – not in a way that they dread.
At level one, you should focus on growing users who complete a core action. For wellness programs, that core action would likely be completing their screenings so that health education and assessments can begin, and employees can start taking a more active role in improving their health.
At level two, you need to figure out how to make your users stick around by using accruing benefits as an employee engages in the program – and mounting losses if they leave. A great example of this is the growth of Pinterest. Pinterest’s core action is “pinning”. The more you pin, the more links you feel you need to save. The more pins you accrue on your boards, the more reliant you become on the platform as a placeholder for your bookmarks, ideas, recipes, etc. It essentially becomes a seamless piece of your life.
This quote in the Harvard Business Review hits the nail on the head: “The organizations with the greatest success are managing to shift people’s relationship with health from one where health is something thought about and ‘practiced’ annually at the doctor’s office, to one where health is practiced daily through small lifestyle habits.”
While there are many pitfalls to corporate wellness programs, there are many rewards when they are implemented properly, including healthier, happier employees; cost savings in reduced absenteeism; and lower employee healthcare costs.
In part 2 of this article, we’ll get into specific strategies, technology, and tactics you can use to create a corporate wellness program that sticks instead of stinks.
Contact us to talk about how we can help.