BenefitsEmployee Engagement

Benefits Package: A Healthy Return

Doing well by doing wellness.
By Allan Dougall
Healthcare costs are growing at an ever-increasing rate—with per employee costs up 62 percent in the last seven years. These increases can have a significant impact on the bottom line for both insurers and self-insured companies.
Some plan administrators are content to debate the cause of these increases, and point to unnecessary tests, new technologies, malpractice costs, or provider profits. Others focus exclusively on ways to lower corporate costs—and how they can shift costs to employees or limit plan benefits.
Most organizations, however, look at this situation for what it is: a business challenge compelling companies to focus their attention on areas where they can affect results. One area that has led to a significant impact is what some call “the marketing of wellness.”
With data-driven analysis, direct marketing techniques, and one-to-one communications, organizations have found ways to motivate employees to make decisions that lead to healthier lives and more cost-effective care. In some cases, companies have realized a $2 to $3 dollar return for every dollar invested—while employees reap the benefits of fitness, nutrition, preventive care, and treatment for chronic illnesses.
One Employee at a Time
Annual healthcare costs have risen to more than $9,800 per employee, but that is only one aspect of the equation. Everyone involved is also concerned with better health outcomes.
Households can make hundreds of decisions each year related to healthcare. Whether these decisions result in action (a trip to the emergency room) or inaction (skipping a follow-up appointment)—each and every decision affects both cost and wellness.
Multiply hundreds of decisions by thousands of employees, and it’s quick to see why plan administrators have difficulty effecting change. First, communicating all of these best practices is expensive. More importantly, when employees are deluged by manuals, pamphlets, and flyers—these essential tips will simply go unread.
That’s why many benefits administrators are looking to incorporate direct marketing techniques into their annual plans. This notion of delivering “the right message to the right person at the right time” has become more than a slogan—it has become a proven, efficient, and effective way to deal with an escalating business challenge. Three factors make these efforts unique:

  • Data. Every employee population is unique, and factors such as age, work environments, geography, family income, and current health status could affect what strategies are appropriate for your organization. Basing decisions on data—and not intuition—has a dramatic impact on ROI.
  • Targeting. Within each employee pool, different actions will be appropriate for each individual. Mass communications are costly and easy to ignore; however, the ability to segment employees based on healthcare needs and opportunities can help ensure that these individuals—and only these individuals—will receive a particular communication.
  • Relevance. Communications that speak to people on a one-to-one basis, in thoughtful, honest, compelling ways, can make all the difference. The right words and the right images can work together to engage employees and help them focus on taking steps that may result in better outcomes.

The Importance of Focus
At a time when a company’s healthcare benefits package can impact hiring, retention, worker productivity, and costs, organizations need to understand which expenses are avoidable so they can design and offer programs that deliver the most value.
The needs of each company are unique, and opportunities could vary greatly based on the size, location, and demographics of your workforce, as well as the specific benefits that make up your plan. Leaders in this practice, however, have already identified the low-hanging fruit—common instances where modest changes in employee behavior can have a significant impact on cost and wellness.
Some of these involve changes in how and where services are purchased. In these instances, the level of healthcare treatment remains the same, except these services are now delivered at a lower cost. For example:

  • Mail order prescriptions. Prescription drug spending accelerated in 2009 to $249.9 billion, increasing 5.3 percent, driven by faster growth in both prices and utilization. While decisions about which medications are appropriate are discussions best reserved for patients and their physicians, how employees purchase their prescription drugs can have a dramatic impact on costs. Today, for example, treatment of chronic conditions accounts for nearly 75 percent of all healthcare spending. Employees with such conditions can often purchase medications in bulk, in some cases ordering a 90-day supply via online or mail-order channels for less than the one-month supply typically purchased at a local pharmacy. In addition to a lower total cost, the employee can benefit from convenience, at-home delivery, lower co-pays and, in many cases, better adherence to prescribed therapies.
  • Avoiding the ER. Each year, more than 100 million visits are made to emergency rooms around the country, with an average cost of $1,000 per visit. Studies show that getting treated in an emergency room can be three to four times more expensive than a trip to the doctor’s office, and nearly half of all ER visits could be avoided. Many of the top reasons for emergency room visits—including sprains, superficial injuries, and upper respiratory infections—can be diagnosed and treated more quickly and cost-effectively through a primary care physician (PCP). Plus, with more than 8,700 urgent care centers around the country, even employees who do not have a primary care physician still have access to doctors and nurses who specialize in treating minor injuries. In other instances, insurers and self-insured employers can reduce overall plan expenses by encouraging employees to seek out additional healthcare. In much the same way that regular oil changes help prevent costly engine failures, simple steps now can mitigate significant healthcare concerns down the road. For example:
  • Preventive screening. Obviously, screening for every possible illness is not always beneficial, especially when only a very small fraction of the population would have become ill in the absence of preventive measures. However, understanding your employees and their healthcare needs can help identify which preventive screenings make the most sense for your group. Colonoscopy screenings for men and vaccinations for toddlers are generally seen as sound, cost-effective steps for most populations, whereas screenings for high cholesterol and other forms of cancer, for example, may yield better value when the group involved is at a higher risk for coronary heart disease or cancer. Overall, when you add in preventive health services such as tobacco cessation screenings and alcohol abuse screenings, the potential savings total nearly $4 billion annually.
  • Adherence to treatments. Certain chronic health conditions are treatable—if the employee adheres to the treatment and medications prescribed by a physician. A 2011 study of 135,000 patients with congestive heart failure, diabetes, hypertension, or dyslipidemia, for example, concluded that patients who take medications as directed by their doctors saved as much as $7,800 per patient annually while leading healthier, more active lives. Yet as many as 50 percent of patients are not adhering to their long-term treatment regimen, leading to an estimated $100 billion each year in excess hospitalizations, often because they don’t understand its importance, have concerns about side effects, or simply forget.

Direct Marketing Results
In an era when the rising cost of healthcare is front-page news, employees are sensitive to any action that could be interpreted as “cost-saving measures” or “cutbacks.” Fact is, both insurers and companies who underwrite the cost of employee health benefits themselves have many avenues to cut costs.
What’s interesting about the scenarios noted above is that they all represent instances where changing employee behavior actually benefits the employee. Greater convenience, lower co-pays, more responsive treatment, and healthier lives represent compelling outcomes.
When you see the concept of selling wellness for what it really is—the combination of data-driven targeting and consumer-oriented benefits—it’s not surprising to learn that so many companies are looking to incorporate direct marketing techniques into their overall plan administration.
In recent years, several well-known companies have made the case that selling wellness is more than an idea or concept. It’s a proven, effective, and efficient way to lower costs and improve wellness. Some best practices:

  • Replace ER use with visits to PCPs or walk-in clinics. One organization uncovered that some members frequently used hospital emergency rooms as their primary source of medical care. Working with the plan administrator, the team applied direct marketing modeling techniques and created a targeted enrollment mailing to the most relevant segment. Location intelligence tools helped create mail pieces that listed the three participating primary care physicians closest to each member’s home. Depending on family makeup, some mailings also included the three closest participating pediatricians and OB/GYN practices. The result: PCP visits increased 41 percent.
  • Increase mail order fulfillment for maintenance medications. Several companies have realized significant savings by motivating employees to procure their meds through more cost-efficient means. Targeting the right audience is again important, as is the way in which you speak to employees. No one wants to feel that they are under a mandate, and effective direct marketing skills can help deliver the message that in-home delivery is a high-value choice. By following such a path, CIGNA realized a 5 percent savings per year.
  • Drive PCP adoption for preventive screenings. With preventive screenings, organizations need to understand the costs and benefits as they relate to both the company and the individual employee—and identify opportunities where communications can be delivered to those who are most likely to benefit from preventive screenings. While employers will never want to intrude on an employee’s right to privacy, healthcare marketers can work directly with plan administers to deliver data-driven content that employees appreciate. One Fortune 500 firm promoted preventive screenings specifically to those employees who had missed a screening within the past 12 months, convincing 30 percent of the target to act. Meanwhile, a recent trial in Europe showed that a one-time colonoscopy screening resulted in a net savings of $165 to $850 per person screened.
  • Increase adherence to treatments related to chronic illness. Given the broad-reaching benefits of treatment adherence, some organizations take great measures to help drive adherence to chronic-care treatments and medications. In one instance, a firm designed a disease management program that encouraged participants to take an active role in their own health by setting goals, taking advantage of tools, and tracking results over time—yielding an 8 percent reduction in prescription drop-off rates. In another instance, an organization designed and executed a tiered, segmented, multi-channel marketing program to change behaviors, which is expected to yield a lifetime per-patient cost reduction of approximately 60 percent.

The Path to Success
Like direct marketing, the concept of selling wellness is both art and science. Organizations cannot ignore the potential to save money and deliver better health outcomes for their employees; however, firms need to be careful how they go about executing such a program. Without the right skills and capabilities, one could easily overspend, mis-communicate, or under-deliver. When designing a program or selecting a vendor, consider these factors:

  • Expertise in both direct marketing and healthcare. Healthcare and health insurance are two complex, highly regulated industries. Working with organizations that have proven track records in this field can help you hit the ground running. Likewise, being able to apply strong, strategic creative for compelling communications is essential to anyone looking to positively affect behavior change.
  • Expertise in data analysis and using data to maximize relevance. The fundamental principle of direct marketing is to use communications designed around the unique needs, wants, and context of each individual. Your direct marketing team should rely on advanced data quality and analysis tools, including location intelligence, demographic segmentation, behavior-based segmentation, and predictive analytics to elicit these insights that allow such highly targeted communications.
  • Ability to design communications that consider the specific barriers to change. Motivating individuals to modify behaviors requires more than promoting benefits. Marketing organizations need to demonstrate an ability to discern all of the reasons why consumers are unlikely to change their ways and develop tactics to address these concerns. When possible, work with individuals who understand not only how, where, when, and how often to reach out to plan members, but also the technical aspects of marketing, such as the role of print and online channels, variable print and personalization, and member-friendly language.
  • Experience in healthcare and data privacy considerations. Given the role of data-mining and one-to-one communications, anyone tasked with selling wellness must be able to design workflows and processes that protect employee privacy concerns—both real and perceived. Smart benefits managers will find ways to leverage the employee/plan administrator relationship to build the necessary trust and overcome any fears that someone outside of the process is looking in on their healthcare decisions.
  • Ability to measure and track ROI. The direct marketing mindset is one of testing, measurement, and enhancement. Can you send fewer communications and get the same result? How can you boost response through a multi-channel effort? Which message is most effective? Look for not only for the desire to test—but also the mechanism to measure response and deliver continuous improvement over time.

Start Now
The pursuit of both lower costs and improved employee health outcomes are not disparate objectives—they are simply the two must-have goals that should serve as the cornerstone for any employee healthcare initiative. It is a challenge, but it is not unlike other business challenges for companies to identify low-hanging fruit and focus efforts on areas where they can make an impact.
Fortunately, when it comes to selling wellness, a host of opportunities exist—areas in which companies can work with employees to eliminate avoidable costs and take actions that will provide for greater satisfaction, stronger work environments, and highly productive lives. The business case for such wellness initiatives is also straightforward—organizations can often realize a return on investment of 200 percent or more within six to 12 months. That’s a healthy return.
Allan Dougall is a healthcare customer communications management expert with Pitney Bowes Inc.

Tags: Benefits, Engaged Workforce, HRO Today Global

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