The ultimate health care motivator: CA$H

Like many other Milwaukee-area companies, Helwig Carbon Products Inc. has seen the cost of its health insurance premiums increase 14 to 15 percent annually in recent years.
"We had a very generous health insurance program for our employees over the years," said Paul Casper, general manager for Helwig Carbon Products. "It was a family-run business, and they took care of their employees."
However, those generous health benefits, combined with a sluggish economy, were hurting the northwest Milwaukee manufacturing firm’s bottom line. In addition to asking employees to pay a greater share of their health insurance costs, Helwig executives decided that improving the health of their employees, and therefore reducing their utilization of the health care system, would help reduce health insurance claims.
Reduced claims ultimately would lead to lower health insurance costs, the executives thought.
The question was, how could Helwig motivate its employees to become healthier?
The company turned to one of the oldest motivators of all time. Cash.
The firm offered its employees a reimbursement of up to $250 per year to join a health club, receive acupuncture treatments, take part in a weight loss or a smoking cessation program or receive any other form of health care not covered by insurance.
However, the response from Helwig employees was tepid. Only about 10 percent of them took advantage of the reimbursement.
"It wasn’t as big as we would have liked," Casper said.
The firm has had more success in convincing its employees to participate in a health risk assessment program. Employees were paid $25 to participate in the program.
"You establish a baseline and measure your progress from there," Casper said.
Employees who stay on the program will have less money deducted for health care premiums from their paychecks. Single employees, for example, will pay about $20 less per month.
So far, about 75 to 80 percent of the company’s employees are participating in the health risk assessment wellness program.
To help employees improve their health, the company also made changes in its cafeteria to offer healthy food options, including a salad bar. About 15 percent of the employees participate in a lunchtime walking program. Eventually, the company plans to offer wellness classes for employees on things such as losing weight and smoking cessation.
In a typical health risk assessment program, employees get their cholesterol level, blood pressure, height and weight measured. They also fill out questionnaires about their lifestyles and their family medical history. The results of the tests and surveys are confidential and are only provided to the employees. The company receives a report summarizing the overall health status of its employees, but no information about specific employees.
The employees then receive counseling from firms hired by their employer to administer the tests, on how to improve their health. Employees with serious health concerns are referred to physicians.
Harley-Davidson Inc. has had success using small incentives to encourage employees to participate in the company’s wellness program, said Rosemary Curtin, health promotion and wellness manager for the motorcycle manufacturer.
Harley provides free pedometers, which cost the firm about $9 each, to employees who participate in the company’s walking program. Employees who stick with the program receive rewards such as duffel bags, athletic socks, water bottles, healthy cookbooks, T-shirts and $20 book store gift certificates.
The company has tried giving away leather jackets in a raffle for walking program participants. The company also once gave a mountain bike and helmet to the winner of a raffle among its top walkers.
Those bigger prizes, which only a few received, did not generate the same interest as the smaller prizes that many employees received, Curtin said.
"Incentives worth over $25 are not any more affective than those that are worth $25 or less," she said. "It really worked better for us if every employee gets a little something."
The Greendale School District offers incentives to employees who participate in its wellness program. The employees must undergo a health risk assessment, promise not to smoke and exercise three times a week for 30 minutes. The employees are on an honor system.
Those who participate have their health insurance payroll deduction reduced by about 13 percent. That means about $160 in the pocket of an average employee, said Erin Gauthier-Green, director of business services for the school district.
"We started this last year," she said. "All but one of the teachers signed up to do this. They know it’s something they should be doing anyway. With a little incentive, (they think) ‘How can I not do it?’"
The district shared the costs of pedometers for employees and included the wellness incentive in its teacher contract negotiations.
"Our (health insurance costs) have gone up 50 percent in three years," Gauthier-Green said. "That’s a huge increase. We have to come to a way of getting some control over these increases."
Wisconsin Film & Bag, based in Shawano with a division in Hartland, recently started a wellness program. The company plans to do a health risk assessment of its employees and break down the employees into three groups, based on their levels of health. The healthiest employees will pay less for health insurance than moderately healthy employees, who in turn will pay less than unhealthy employees.
"People who score better get a lower rate," said James Feeney, general manager for Wisconsin Film & Bag’s Hartland division.
Businesses with wellness programs see them as a tool to reduce their health care costs.
However, for years, many Milwaukee-area businesses did not think wellness programs were worthwhile, said Jo Steinberg, president of Milwaukee-based Midland Health, which provides on-site wellness testing and follow-up services for business that have health risk assessments for their employees.
That view has changed in recent years as health care costs have risen dramatically.
"In the past three to four years, rates have gone up so high, businesses are throwing up their hands and saying, ‘Oh, my God. What do I do now?’ Then we walk in the door and help them," Steinberg said.
The return on investment for a corporate wellness program is about $1.50 to $4.50 for every dollar spent, Steinberg said. Preventative medicine costs much less than treating an illness or disease.
"Once (businesses) see the value and the results, they continue doing it," she said.
However, the wellness programs are also a benefit that improves the health of employees. In some cases, the health risk assessments catch serious health problems, such as diabetes or extremely high cholesterol levels, that employees were not aware of and need treated right away.
Preventing a serious health problem can not only save an employee’s life, it eliminates a major health care expense. About $65,000 can be saved by preventing a heart attack, Steinberg said.
"Eight percent of your employees take up 80 percent of your health care costs," said Daniel Burkwald, president of Burkwald & Associates Inc., a Pewaukee-based benefits advisory firm.
Businesses are becoming more creative with the incentives they offer their employees to participate in wellness programs, Steinberg said. Some firms make health risk assessments mandatory before employees can receive health insurance coverage.
Others offer contributions to an employee’s health savings account of $20 to $50, she said. Some employees get time off for participating in wellness programs.
Some businesses hand out $20 or $10 gas cards as incentives if their employees and their spouses take a health risk assessment, said Courtney Schulteis, communications specialist for Burkwald & Associates.
Gift certificates to a healthy restaurant, a grocery store or a sporting goods store, as well as lower health insurance paycheck deductions or simply cash incentives are used by different companies as wellness incentives, she said.
"The more money you allocate toward incentives, the more eager people are to participate," Schulteis said.
The wellness programs have paid off for the businesses that convince their employees to participate, Burkwald said.
"We are seeing clients being rewarded with single-digit renewals (for health insurance) in a double-digit environment," he said.
"The ones that took a gamble on it and did it have reaped the rewards," Steinberg said.
October 15, 2004, Small Business Times, Milwaukee, WI