Wellness Programs

[Guest guest]

The Road to Wellness

Is Starting at the Office

Employers' Efforts to Push

Preventive Care Begin to Show

Both Health and Cost Benefits

By M.P. MCQUEEN

December 5, 2006; Page D1

http://online.wsj.com/article/SB116528230861640588.html?mod=djemHL

When Cadmus Communications Corp. began requiring employees to undergo a

health-risk assessment to qualify for medical coverage, some workers feared

their medical conditions could cost them their jobs. But Metzger

credits the mandatory testing with possibly saving her life.

Ms. Metzger, a Cadmus Communications accounts manager, says a screening revealed

she had swollen thyroid nodules, one of which turned out to be cancerous. " If I

had gone to my doctor, I could not have gotten that test because I didn't have

any symptoms, " says the Ephrata, Pa., resident. Because it was caught early, Ms.

Metzger, who was then 32 years old, stayed in the hospital just 24 hours after

surgery and then received outpatient treatment. Doctors now say she is

cancer-free.

Like Cadmus, a growing number of companies in recent years have sought to cut

medical costs by integrating so-called wellness programs into their health-care

coverage. Though many programs are still in their early stages, a number of them

are starting to show some positive results -- both in terms of cost savings for

employers and improved health for employees.

Cadmus, a publishing-services company in Richmond, Va., says its overall

health-care costs grew $500,000 last year, after rising by $2 million in each of

the preceding four years, an improvement the company attributes in part to its

nearly two-year-old wellness program. As a result of the mandatory screenings,

about 140 employees went on medication to control high blood pressure and an

additional 150 went on cholesterol medication. Hospital stays fell sharply.

Other companies, including supermarket chain Safeway Inc. and mortgage giant

Freddie Mac, also say they have saved money through efforts to keep their

workers healthier.

Many wellness programs make available free or low-cost health screenings. Some

companies have installed on-site medical clinics to encourage workers to seek

preventive care. Other companies require that workers undergo health-risk

assessments in order to qualify for medical coverage. Employees deemed at risk,

for conditions such as diabetes, heart disease and obesity, might then receive a

phone call from a nurse suggesting follow-up action. A recent survey by

consulting firm Hewitt Associates found that 42% of companies offered some type

of health-risk assessment in 2005, up from 29% in 2001.

It might seem surprising that some companies are expanding the availability of

medical services for workers. For years, employers instead have sought to

control access to care, by such means as requiring primary-care physician

referrals to see specialists and increasing employees' share of premiums and

co-payments. A recent survey by Kaiser Family Foundation found that since 2000

the average annual worker health-care premium contribution jumped 83% to $2,973

for family coverage.

But in recent years a growing number of companies and insurers have been trying

to remove some barriers to care based on evidence that suggests early detection

and intervention will save money in the long run, especially for chronic

diseases such as cancer and heart disease.

" Catching something early is cheaper than a catastrophic event, " says

Ellis, Cadmus's benefits manager. Although the company's wellness program pushed

costs up sharply last year for diagnostic screenings and prescription medicines,

as more employees sought earlier intervention for health conditions, this was

more than offset by savings in hospital fees. Cadmus says its employees last

year spent half as many days in the hospital as compared with 2004.

Safeway also says it has saved money as a result of new programs that eliminated

certain co-payments to encourage more preventive health care, though it declined

to provide detailed figures. The company last year began covering 100% of the

cost of annual adult physicals, well-child exams, colonoscopies and mammograms

for its 10,000 nonunionized employees.

And Freddie Mac says it has saved $900,000 a year in medical and

lost-productivity costs from installing an in-house clinic for its 5,000

employees in 2004. The clinic, which offers such routine services as annual

physicals, flu shots and allergy tests, saves the company $117 every time an

employee is seen in-house instead of by an outside provider, a Freddie Mac

spokeswoman says.

But some wellness programs have generated controversy for being autocratic, at

least at first. To qualify for medical coverage, Cadmus last year began

requiring a health-risk assessment of its 3,000 employees and their covered

spouses. The assessment consisted of an online questionnaire, a blood-pressure

check and a finger-prick blood test for cholesterol.

Employees were assured the results would be known only to Cadmus's health

insurer, Cigna Corp., and wouldn't lead to punitive premiums. Still, 17

employees dropped coverage rather than comply. " Associates were frightened and

fearful. They thought that we were going to find out who was unhealthy and

terminate those people, " says Licata, Cadmus's senior vice president of

human resources.

In return, employees got some new perks under the redesigned plan: Low-cost

screenings for clogged arteries and thyroid problems, on-site mammograms,

low-cost flu shots, and subsidized visits to a nutritionist. Cadmus installed

blood pressure cuffs at work sites so employees could self-check. It gave away

free pedometers to encourage exercise. The company even changed cafeteria and

vending-machine offerings, charging more for regular soda than diet, for

example.

The assessments yielded some surprises: Although only 28% of employees

volunteered that they were overweight, tests showed 78% actually were. The

screenings also turned up many cases of hypertension and high cholesterol. Cigna

nurses contacted the at-risk employees and referred them to doctors for

follow-up care. Employees weren't required to take prescriptions or change their

lifestyles to keep their medical coverage.

" They used to discourage you from taking these expensive tests, " says Ms.

Metzger, the Cadmus employee treated for cancer. " But I paid $25 and look what

happened; it was worth it. Then insurance kicked in and I paid very little out

of my pocket, " she says.

Ms. Ellis, the Cadmus benefits manager, says she believes a voluntary wellness

program wouldn't have yielded so many positive results. " In the best scenario,

you get maybe 40% participation " with a voluntary program, she says. Cigna says

it recently instituted a similar program for its employees after seeing the

results at Cadmus.

While Cadmus threatened to withhold health-care coverage from employees who

didn't participate in the program, other, mostly larger, companies typically use

incentives to encourage preventive care. Such programs usually apply to

employees regardless of their choice of health-care plan, even those with

high-deductible plans. At Molson Coors Brewing Co., for example, employees of

the company's U.S. unit receive a $200 discount on their annual health-care

premiums for filling out a health-risk appraisal form and following up on any

medical advice. U.S. employees of AstraZeneca PLC, the pharmaceutical company,

receive a $50 monthly discount on their health-insurance premiums in return for

undergoing an annual health-risk assessment, a company spokeswoman says.

Dell Inc. last year started giving employees who agree to a health-risk

assessment a deduction, currently $75, from their annual health-care premium.

Those who complete a wellness program for managing health risks get an

additional $225 deposited into an account that reimburses employees for medical

expenses. While results aren't in yet, " we have every reason to believe it will

be worth our investment and pay off for employees as well, " said Kathleen Angel,

Dell's global benefits director.

Companies also are setting up on-site medical clinics to provide primary and

preventive health care for workers, at lower cost. Media group Discovery

Communications, a unit of Discovery Holding Co., and casino operator Harrah's

Entertainment Inc. contract with Whole Health Management Inc. to operate

workplace clinics staffed with physicians and nurses. Discovery estimates it has

saved $1 million a year since starting its clinic in 2004. The clinic is

available to its 1,500 employees in land and their dependents over the age

of 14.

Write to M.P. McQueen at mp.mcqueen@...

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