You don’t have to be a company executive to know that healthcare costs represent a significant portion a company’s spending. A 2015 Kaiser Family Foundation study found the average premium for single coverage was $6,251 per year, and on average employers paid 83% of the premium.
Yet premiums are just one reason health care costs are squeezing employers. Productivity losses related to personal and family health problems cost U.S. employers $1,685 per employee per year, or $225.8 billion annually.
With health care costs affecting both the top line and the bottom line, companies are thinking differently and looking for cost-effective ways to reduce absenteeism and increase productivity. For most, that means offering some sort of wellness program to help employees improve their health and wellness so they can be more productive. Today, more than 80 percent of employers with 50 or more employees offer wellness programs, and more than two-thirds offer financial incentives to employees who get health screenings, or take lifestyle or disease management steps to maintain and improve their health. The logic seems flawless: If workers enroll in a wellness program, they’ll become healthier and thus perform more effectively on the job.
There’s just one problem. A mere 31% of employers say they have demonstrated cost effectiveness using rigorous evaluation methods according to a 2014 study from The Economist Intelligence Unit and Humana. Yet employers keep offering such programs, seemingly trapped in a maze of uncontrollable healthcare costs, reduced productivity, and ineffective solutions.
So what can you learn from the mistakes other employers make with their wellness programs? As you shop for a wellness program—or evaluate the one you already offer—consider these six mistakes most employers make:
Many employers choose wellness programs that impose goals on employees rather than empowering them to set their own goals. Every employee is unique, yet most wellness programs present cookie-cutter program goals that may be out of reach, unwelcome, or immaterial for some segment of the employee population. By contrast, effective wellness programs actually ask employees what they want to accomplish. They encourage employees to set their own goals and design their own health and wellness pathway, which may include education, prevention, healthy living, and fitness and exercise.
Too often employers offer goal-based incentive programs without guidance. People usually know what that they need to do to achieve better health, whether it’s losing weight, getting more active, or reducing stress. What’s missing is the how. Yet, most wellness programs offer little guidance on how to reach personal health goals. While the ultimate incentive is better health, employees need motivation coupled with positive reinforcement along the way. Unfortunately, many wellness programs don’t provide health coaching and only offer incentives for reaching program-imposed goals. By contrast, effective wellness programs offer incentives for both activity and achievement, rewarding progress toward goals that employees set and own.
Employers make the mistake of selecting wellness programs that rely on their employees’ self-reporting rather than verifiable actions. In order to truly support employees in achieving their goals, companies can’t simply rely on self-reported data, which can give an inaccurate picture of employee activity. Most wellness programs only credit employees for signing up for a gym membership or a 5K run, rather than verifying and rewarding their workouts and the steps they are taking toward better health. By contrast, effective wellness programs rely on data that is 100-percent verifiable and automatically updated, leaving nothing to chance.
Wellness programs commonly overlook the influence of family.The health behaviors of family members can either perpetuate bad habits and shortcuts or encourage good intentions, as Gallup’s Consumption Habits Survey and NIH research has shown. Yet, many wellness programs do not incorporate families and thereby neglect a crucial determinant of success for many employees.
Not all employers have figured out that they should expect reporting from their wellness program on how it’s working, not just how it’s being used. Many wellness programs have failed to demonstrate that they do in fact work. Few report what metrics they are targeting and what success factors they are measuring that clearly indicate a benefit to the employer and the employee. Even fewer have conducted multi-year studies to show how they impact health and healthcare costs. By contrast, effective wellness programs both promise and prove that they get results.
Most employers don’t benchmark themselves in order to create a strategy based on company priorities. Most companies go straight to the perceived solution—an off-the-shelf wellness program—without knowing where their employees stand in terms of health and wellness and what areas they need to prioritize in order to achieve strategic goals. By failing to benchmark their employees and determining which needles they’re trying to move, they miss out on the opportunity to craft a program designed for their unique situation and culture. And how can companies gauge success once a wellness program has been implemented if they don’t know where they have started?
Americans today spend most of their waking hours in the workplace, leaving little time outside of the workplace to pursue wellness without infringing on other needs and interests. Smarter employers encourage employees to nurture their health and wellbeing around the clock, rather than in isolation outside the office. These employers recognize that more and more employees are bringing health into the workplace through mobile health apps and wellness devices, and they make it easy to connect that technology with their wellness programs. What does good look like? It’s where employers choose wellness programs that let employees create their own goals—and then verify that those goals are being met. And, very importantly, employers choose wellness programs that don’t stop at gym discounts but actually reward workouts over time. Smart employers choose wellness programs that support employees’ goals by giving them easily accessible tools and incentives that fit their lifestyles. These employers have learned to look for wellness partners that are able to engage and include family members.
Strong employers select wellness programs that can truly deliver evidence-based proof and even multi-year data, such as the results reported in a three-year Humana study. This research found a clear and positive correlation between employee engagement in the HumanaVitality program and lower health claims and fewer unscheduled absences.
When it comes to wellness vendors, there are many look-alikes out there, and there are also examples of trusted vendors that are helping companies avoid the pitfalls described above. Look for programs that provide evidence-based measurements of impact and use wellness insights, like the importance of family or verifiable data.
As you evaluate wellness programs, remember this: Well-designed programs can deliver measurable results in terms of increased engagement and reduced healthcare trend, and they can offer the data to support their claims. Ask tough questions, insist upon proof, read the research and— most of all—avoid the mistakes that most companies make. The health of your employees and your business is at stake.
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