Volume 4, No. 2
April 2008


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Ann Arbor Area BUSINESS MONTHLY magazine brings the reader the latest business news and information important to the businesspeople in Washtenaw County. Each month articles cover real estate, legal, Internet, employee concerns and the climate of business in the greater Ann Arbor area. There is news about company employees and feature articles on local businesses. We cover business news from Ann Arbor, Chelsea, Dexter, Manchester, Milan, Saline, Whitmore Lake, and Ypsilanti.

Creating A Healthy,
Productive Workforce

Alex Harrison

Dee Edington, Director of U-M Health Management Center
Dee Edington, Director of U-M Health Management Center.

Sustainability" is a word laden with connotation these days. For some it means "shaking the hand that feeds you" by selecting a tomato from the local farmer's market, rather than from the big box retailer that sells computers only a few aisles down from the produce department. But for a growing number of businesses across the nation and within Michigan, sustainability means creating a healthy, productive workforce via a commitment to wellness in the workplace.

"We need to shift the conversation from focusing on the cost of health care, to a focus on the total value of health," asserted Dr. Dee Edington, at the 27th Annual Wellness in the Workplace Conference held March 12 in Ann Arbor.

Edington, who is the director of the University of Michigan Health Management Research Center, has dedicated himself to understanding the relationship between promoting health, wellness, and vitality within organizations, and how they impact health care cost containment, productivity and human resource development.

Edington has been researching within this field for too long to sugarcoat the facts: our country is unhealthy, and what's worse, most people view health in term of symptoms and disease rather than wellness and vitality. For too long insurance coverage has focused on treating disease rather than preventing it. To continue this trend has cultural ramifications, but as a long record of research indicates, it has a significant economic impact as well. "If it doesn't make economic sense in this country, it doesn't make sense. When we take health, prevention and wellness and make it an economic issue-measured and translated into dollars-then it will make sense," says Edington.

Speakers at this year's conference were considered "champion companies," who have invested in a creative combination of wellness programs and consumer-driven health plans, resulting in documented improvements in their bottom line and an overall healthier group of employees. "Health management is a core business strategy, similar to quality and safety, or preventive maintenance of equipment, and these costs represent long term investments in the future success of the organization," says Amy Schultz, Director of Prevention and Community Health for Foote Health System in Jackson, Michigan. Foote's It's Your Life Services, a line of health and productivity management programs, assists local employers in implementing and then measuring the success of employee health and wellness programs.

Like many similar programs across the country, It's Your Life works within a company's population in the earliest stages by benchmarking- through biometric screenings measuring employee's body mass index (BMI), blood pressure, fasting lipid profile, and health risk assessments. They then collaborate with the company to develop education, programming (such as individualized health coaching, Weight Watchers, and smoking cessation treatment), an integration of benefits, and a strong inter-referral system between employees and primary care physicians.

Health and productivity management companies also carefully evaluate the implementation of these initiatives in order to quantify success in terms of both health and productivity. At this year's conference, Schultz spoke specifically about the measured success over the last six years of the programs' implementation among Foote Health System's own employees, and says that these positive outcomes are the norm rather than the exception.

"Recent reviews of comprehensive worksite wellness programs showed reductions of around 30 percent in absenteeism, disability and workers compensation, and health care costs, and returns on investment up to $6 to $1 when considering the total health savings," says Schultz. "Research estimates that the savings from productivity gains represent many times over the savings due to health care costs alone."

Sense and Sustainability

"What we need is a total paradigm shift-from react and repair to predict and prevent." Bob Soroosh, Director of Benefits for Ann Arbor-based Affinia Group, Inc., has strong words when it comes to health care in America. Like many who spoke at the Wellness in the Workplace Conference this year the focus is shifting direction, from employees expecting their employers or insurance to pay for everything, to employees who acknowledge their own financial stake in choosing cost effective care. Given that America spends over $2.2 trillion dollars annually on health care, and that $3 of every $4 spent on health care in the US goes to treating people with chronic disease (according to 2006 CDC data), it seems evident that the most cost effective care for today's employees would be that of prevention and wellness.

Affinia Group, a leading manufacturer of automotive components, aimed for the paradigm shift Soroosh described through the establishment of a covenant between employees and the company beginning in 2003. The covenant established a goal to promote health and well-being while making smart use of health care dollars. By signing the covenant, employees agreed to participate fully in preventative screenings and recommended follow-up plans in exchange for a $1,000 reduction in their annual premiums. The company narrowed the health care options to a single consumer-driven health care plan including a high deductible and a Health Reimbursement Account (HRA), but offers no-cost generic prescriptions, a $200 credit to those participating in Weight Watchers, and free smoking cessation treatment.

Bob Stites, of Stites Financial in Ann Arbor, brokers insurance to many local businesses, and points to a surge in consumer-driven plans featuring Health Savings Accounts and Health Reimbursement Accounts as good tools for controlling costs and making good use of health care dollars. "Health care is one of the only industries where people receive a service not knowing the cost beforehand," says Stites. "If you go to a hospital to have a cat scan, whether it's done at Saline, Chelsea, or U of M Hospital, you'll have no idea what that procedure will cost-and that's a problem." He explains that consumer-driven models help people realize the actual cost of care, from diagnostics to treatment, and can influence them to make smarter choices, including proactive prevention of illness.

The numbers for employers who are choosing this strategy of shared responsibility are encouraging. At Affinia Group, employees classified as being in the "low health risk" group rose from 12 percent in 2003 to 27 percent by 2007. "This migration of people into the low risk group represents a major improvement in the health status of our people," says Soroosh. As reducing health risk also reduces health cost, there have also been significant financial benefits to the company's bottom line. "Just the money we've saved on our annual prescription drug spending more than twice pays for our entire employee health management program," he says. "Our annual rate of health care cost increases was unsustainable at 12 percent per year. That rate has been cut in half."

Big Challenges for Small Businesses

These improvements are encouraging for larger companies like Affinia, who has 1000 employees nationwide. But 75 percent of employees in the Washtenaw County area work for a business of twenty-five or fewer people, according to Bob Stites. "A small business's perspective on health care, as well as their budget, is going to be very different from that of a larger company."

This doesn't mean that small businesses aren't in need of a better plan. "We're just beginning to apply what we've learned to smaller companies," says Dee Edington. "The whole idea of creating a culture of health is one that must be presented in a way that will help the small business-after all, that's where the people are."

The challenge for small businesses is multi-dimensional. As Edington points out, most research on wellness and prevention programs has focused on large companies; they are easier populations in terms of data collection, and health management companies don't always have a solid economic reason to sell to small companies.

"Small businesses are almost like families in a way, and the cost of low productivity and high healthcare cost hurts everyone," says Edington. "Even if the employer shifts the cost to the employee, it still impacts the whole family." From his perspective, small businesses need to become aggressive in seeking out any possible avenues for progress. "It's time for the small business to start asking for some partners in this effort, to start leveraging their brokers to get some help in finding resources."

Blue Care Network of Michigan's Healthy Blue LivingSM wellness product continues to gain in popularity since its introduction in October 2006. "This product came out of discussions with small employer groups and the Detroit Regional Chamber of Commerce," explains Kevin Klobucar, Vice President and Regional Executive for BCN, who says that employers face a conundrum-how to provide insurance to their employees when premiums continue on the rise, on top of the already crippling Michigan economy. Klobucar explains that Healthy Blue Living, which rewards members for their participation in a wellness program-members receive lower co-payments and deductibles in exchange for completing a health risk assessment, filling out a Healthy Blue Living qualification form together with their physician, and adopting a healthy lifestyle-now has over 70,000 members statewide.

Beyond insurance plans themselves, even smaller companies can benefit from creating a culture of wellness. One such example is Adaptive Materials, Inc. of Ann Arbor. The fuel cell technology company, which employs approximately 45 employees, polled their workers and discovered that the majority of employees were interested in having an onsite fitness center. "They liked the idea of being able to come in either before work or after work as a cool-down from the workday," says Ginny Pescara, Human Resources Generalist at AMI. So when the company moved to its new location off of State Street, it added a fitness facility stocked features such as free weights, elliptical machines, treadmills, and exercise balls.

Moreover, the company went to strictly a high deductible plan in 2006 which includes a Health Savings Account that the company contributes into. The results have been positive, and renewal increases have remained low, due to what Pescara describes as "a healthy workforce with low utilization."

As AMI moves more toward manufacturing, the age and experience of employees is becoming more diverse, and Pescara notes that this is already contributing to more diverse healthcare needs. "Based on their most recent employee surveys, we found that the high deductible plan isn't a perfect fit for everyone, particularly families or folks who use the healthcare services more frequently," she says. So the company is now offering a PPO plan as another option. "We're also in the preliminary stages of forming a wellness committee," explains Pescara, with the goal of implementing more health promotion and education within the company through strategies like "lunch and learn" sessions and more comprehensive exercise programs.

Small businesses can also benefit from conducting health risk assessments. Often, there is a misconception that administering these tests is a costly endeavor. Edington raises the point that considering the thousands that employers spend annually on each employee, the cost is nominal. "What small businesses can do to make a huge impact, is to create a healthier environment in the workplace and then combine that with some health coaching to address the individuals," he says. Health plans like BCN's Healthy Blue LivingSM product requires each member to complete a health risk assessment and offers free onsite health coaching so that employees can meet improved health goals

The heart of the matter, however-as experts are clearly indicating-is a much needed shift from change in behavior to change in culture. Workplace wellness and consumer-driven insurance plans are only a small piece of the puzzle when it comes to solving America's health care crisis.