For about 20 years, Diversified Insurance Services Inc. chairman and chief executive officer James McCormack thought about offering wellness program services to his company's clients.
However, market conditions did not demonstrate a need for such a program.
That is changing. In recent years, Milwaukee-area businesses have seen employee health care costs rise by 20 percent or even more. Health insurance costs for businesses in the Milwaukee area are higher than those faced by businesses in most other large cities in the United States.
Those high health care costs are diminishing the bottom line for area businesses, which are now passing more of those costs on to their employees.
Diversified, a Waukesha-based insurance brokerage, is hearing from an increasing number of its clients that are open-minded about creative solutions to the problem of soaring health care costs, McCormack said.
"We found more and more people were not just shopping for the best deal," he said. "They are also looking for solutions to slow down the rise of health insurance costs. I think it takes a crisis (to create a demand for wellness services), which is what we are in."
So, Diversified recently unveiled a wellness program for its clients. McCormack believes his firm is the only insurance brokerage in the state that is now offering such services to its clients.
The company recently hired Gerald Theis to serve as director of corporate wellness, a newly created position. Theis is a licensed psychotherapist and wellness coach. For the last two years, he worked as an independent benefits consultant. For the seven years prior to that, he was the vice president of the behavioral health delivery system and the employee assistance program for Covenant Healthcare.
Theis has designed the Healthy Life$tyles Wellness Program, which he will implement for Diversified's clients.
For the clients who choose to participate in Healthy Life$tyles, Diversified will do a health risk assessment of each of the company's employees. The assessment will measure the height, weight, blood pressure, cholesterol, body mass and glucose level of each employee. The employees also will fill out a health risk appraisal questionnaire.
A comprehensive report about the overall status of the employees' health will be given to the employer. No information will be provided on individual employees.
Diversified also will use its claims analysis system to determine the illness patterns and health care utilization patterns of its clients' employees. That information, combined with information from the health assessments of the employees and the questionnaire employees will fill out on their family health history and lifestyles, will be used to determine which areas to emphasize with the client's wellness program.
The programs will be tailored to the different needs of each company. Some companies may have a large number of employees with smoking-related health problems or others with obesity-related health problems. The wellness program will target the trouble areas for each company's employees. Companies with older employees may be interested in different aspects of the program than companies with younger employees, McCormack said.
Diversified will provide wellness education programs for the employees on topics such as weight management, smoking cessation and nutrition. The program also will include a Web-based interactive wellness resource for employees and their family members to obtain the latest health and wellness information and interactive assessments of their own health.
The Healthy Life$tyles program also will make recommendations to employers about how to encourage their employees to exercise more. For example, some employers could offer longer lunch breaks to employees who take a walk during the break, Theis said. Also, employers could offer incentives to employees who meet a weight reduction goal determined by a nutritionist and the employee. However, the incentives must be worthwhile, such as cash or movie passes, Theis said.
"Human behavior is hard to change," he said. "They should get a reward, not just a certificate and a round of applause at the lunch table."
Diversified wellness coaches will also be available for face-to-face and on-line consultations with employees. The coaches will provide an intervention for employees with significant health concerns, but only if the employee consents to receiving an intervention. If the employee's health appears at risk, they will talk to the employee about it or, with the employee's permission, will notify his or her doctor.
Diversified has asked some of its long-time clients about the program and has received a positive response, McCormack and Theis said.
"The clients to whom we have presented Healthy Life$tyles to have been impressed with the comprehensiveness of its offering," Theis said. "When employers and employees are currently paying around $12,000 a year for family health coverage, they see the value of spending a very small fraction of that to help them change behavior to lead healthy and more productive lives at work and home."
"We think this has to be an accepted way of doing business," McCormack said.
Diversified is convinced the wellness program will make the employees of their clients healthier and will therefore reduce their utilization of health care services and reduce health care costs for their employees.
According to a report by the American Journal of Health Promotion, businesses without a wellness program have about $2,389 in average medical claims per person annually. Businesses with a wellness program have about $1,642 in average medical claims per person, or about $747 less than companies without a wellness program.
One Diversified client said their firm would save $15,000 a year by implementing the wellness program, McCormack said.
In addition to the return on investment, a wellness program makes a company a more attractive place for employees to work, McCormack said.
"We believe there is a return on investment (for the business), I don't think there's any question," he said. "But it's also an employee benefit."
Also, healthier employees are more productive on the job, McCormack said.
The wellness program will give businesses the tools necessary to address a coming paradigm shift in how health care is consumed, McCormack said. The rising costs are causing health care delivery to evolve from a reactive system, that primarily diagnoses and treats illnesses, into a system that encourages people to better manage their own health to reduce health care system utilization and therefore to also reduce the cost of health insurance.
"We need to make (employees) realize they're part of the solution," McCormack said. "Claims are the problem. If there are no claims, there is no health care cost."
September 3, 2004, Small Business Times, Milwaukee, WI