Sunday, October 17, 2010

Ten Reasons Why Fully Insured Commercial Health Insurers Don't Offer Worksite Wellness Programs For Their Customers

During the Care Continuum Alliance's annual Forum10 meeting, the Disease Management Care Blog ran into yet another session presentation by another consultant on the culture changin', outcomes enhancin', money savin' and transformationalin' merits of an employer-based wellness, prevention, health promotin', and exercisin' program. If you understand employee incentives, benefit design, absenteeism, presenteeism, intranets, surveys, getting the CEOs' spouses to also participate and hiring enthusiastic worksite fitness counselors, you too can preside over a tidy positive return on an up-front PMPM employer cost that, according to Health Affairs, averages about $12 PMPM. Not a bad way to make a living.

So if the consultant says so, worksite wellness is a no brainer, right?

Yes, says the DMCB, except in the fully insured commercial market. So far, every time the DMCB runs into another glowing report about worksite wellness, it seems to involve a self-insured business setting. It seems the traditional health insurers - where an enrollee pays a premium in exchange for a commercial health insurance plan covering the cost of any illness - have either 1) decided not pay for worksite wellness programs for their customers, or 2) are not reporting on their experience. The DMCB suspects it's mostly the former: they're not paying.

The DMCB thinks that may no accident. While it was at Forum10, it asked various colleagues about this phenomenon over some beverages and solicited this list of possible explanations for your reading pleasure:

1) When an employer decides to self-insure, it's usually because its leadership believes the company has a healthier population with a lower burden of disease. This means a lower risk, which means reserving less money against any losses. That makes comparatively more money available to pay for health promotion.

2) Once the decision-making about paying for worksite health promotion is taken from conservative insurance actuaries in settings that are heavily regulated by a State Department of Insurance to independent thinking Human Resource Directors and company CEOs, there is little argument: of course health promotion reduces costs and absenteeism, health shouldn't be medicalized and investment in the well-being of a workforce is simply the right thing to do.

3) Many commercial insurers' lines of business are dominated by smaller businesses with smaller workforces. It's mathematically more difficult to demonstrate savings for a company across a smaller number of insured individuals, which makes it harder for commercial insurers to justify the expense in the first place.

4) Commercial health insurers are, well... commercial health insurers. That means disciplined underwriting, adequate premium pricing, accurate claims payment and setting appropriate reserves. Worksite wellness has little to do with insurance and is not only outside their comfort zone, they have no idea on how to do it..

5) The actuaries are in control. They rule.

6) Employers have a stable work force with little turnover, especially in today's economy. While they still manage their health insurance costs on a yearly budget basis, they can afford to take a long-term view and be more confident that they'll eventually recoup their up-front costs in reduced claims expense. Not so in the commercial insurance market, where customers flee to the competition over a few cents difference in the monthly premium. That's called churn.

7) Employers can use a variety of financial and cultural sticks and carrots on their captive employee population to encourage participation in wellness. Commercial health insurers are generally distrusted by their individual subscribers and have fewer options to encourage participation.

8) Thanks attacks by the political class, the uncertainty over the definition of the medical loss ratio and the travails of having to catch up with numerous other regulations that are part of health reform, commercial insurers are rather preoccupied. Now is not the time to worry about worksite wellness.

9) Self insured companies are willing to make time and commit other non-financial resources to making their worksite programs pay off. In contrast, buyers of commercial insurance simply expect their insurer to provide worksite wellness with little to no effort on their part. They won't make room for company wide emails, use of their corporate intranet, time off for employees to do wellness during a workshift or accomodate any other intrusions into the company's workflow. Commercial insurers know that, so why bother?

10) Commercial insurers do offer some value-added gimmicky options that are designed to look like work site wellness, like health club membership discounts or health risk assessments. Every day that these faux programs are accepted as "wellness" by their unsuspecting fully insured customers is another day gone by without a credible onsite health promotion initiative.

This makes for a significant policy challenge, despite the provisions of the recently passed Affordable Care Act. The DMCB sees little in the current law that actively translates the success of health promotion in self-insured settings into the commercial fully insured market.

The DMCB may be wrong. If so, please feel free to comment.

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