Rob Davenport recently joined Wells Fargo Insurance Services as a wellness consultant to its employee benefits offices throughout California. He previously worked on implementing large-scale wellness approaches for employers like the U.S. Navy, the U.S. Olympic Training Center, Pacific Coast Companies, Inc., among many others. Most recently, he was the wellness program manager for NASA at the Johnson Space Center. All told, he’s been working in the wellness field for the past 25 years.
Mr. Davenport recently shared his thoughts with the Business Journal, particularly on how wellness can have an impact on employers health insurance rates.
Q: Within the past few years, have you seen more attention paid to wellness by employers, and in what ways have corporate attitudes toward wellness changed?
A: Yes. Employers without wellness programs are beginning to realize that wellness can be an effective strategy to control health care costs and improve productivity. “Early adopter” companies of results oriented wellness programs have achieved impressive cost savings and their accomplishments have been chronicled in research and HR journals for the last decade leading other companies to take notice.
Companies without wellness programs that have taken the traditional “do nothing” reactive approach to health care are realizing that they can’t continue to absorb significant rate increases year after year and are considering proactive approaches such as wellness and consumerism.
Employers who have had low to moderate impact wellness programs in the past are realizing the need to take their programs to the next level by implementing a results oriented program. This type of high-impact program can significantly improve their productivity in the areas of reduced absenteeism and presenteeism, and improved worker’s compensation costs. The use of incentives linked to health plans, such as premium reduction, HSA/HRA contributions and lower deductibles have increased in popularity in the last four to five years. Benefits linked incentives typically yield the highest levels of participation with health assessments and other programs, typically between 60 percent to 90 percent if effectively communicated to the organization.
Changing an organization’s culture of health is also becoming a higher priority now than it has in the past. Providing employees with a healthy physical environment and culture at the worksite can significantly change their attitudes and behaviors that are more conducive to living a healthier lifestyle.
Q: How have attitudes toward wellness changed in the past decade?
A: Employers without wellness programs didn’t understand how comprehensive programs could benefit their organization so they simply didn’t see the benefit of having them. Early adopting organizations who had wellness programs typically offered different types of individual programs without integrating them all into one seamless comprehensive program. Many employers implemented programs without measuring the impact so they couldn’t accurately evaluate if their programs were having any success. For some companies, wellness was more of a perk benefit to differentiate themselves from others as a recruitment and retention strategy to attract the best talent.
More employers today are implementing a “results oriented” approach to their program by using metrics, such as participation and population health risk trends, to evaluate the health of their population and to fine tune their programs so they focus on specific high risk conditions and diseases within their population.
Q: Has health care reform accelerated the shift in wellness among employers?
A: Yes, especially as it relates to the use of incentives by employers to drive participation in their wellness programs, and as a means to incent smaller employers to adopt wellness programs through grants.
Q: When did Wells Fargo begin to incorporate wellness into its employee benefits division, and does its inclusion into mainstream insurance represent a new approach to supporting employee health?
Wells Fargo Insurance Services has supported wellness with a variety of tools for its account teams for a number of years, however they just recently invested in a dedicated wellness consultant who could support their account teams throughout California.
Wells Fargo has grown in the last 10 years through the acquisition of number of insurance brokerages: Acordia, ABD and Wachovia. Wells Fargo has had dedicated wellness consultants in other regions of the country for a few years now and recently hired a consultant in the Atlanta area.
As interest in wellness by our clients grows, so does the need to provide strategies and resources in supporting them to implement sound wellness programs.
Q. Much of the talk on wellness these days touches on the return on investment. What kind of ROI can a good wellness strategy have, and what are some ways of companies achieving the best possible ROI?
A. ROI is a controversial topic in wellness because of the challenge in accurately measuring it. Depending on the methods used to collect aggregate health data from health assessments and costs, ROI estimates can vary greatly. Some companies have reported ROIs as high as 6:1, while many typically range from 2:1–5:1. Critics have reported that many ROIs don’t accurately account for employee’s time in participating in wellness activities, program and personnel costs, and the inherent bias in ROI calculations that may exist with some employers and studies reporting ROIs.
Within the last year, some wellness experts have reported that a 2:1 ROI is more realistic, with 3:1 being high. Researchers at Harvard conducted a meta-analysis of wellness program studies in 2010 and reported an average ROI of 3.27 in health care cost savings and a 2.73 ROI in absence cost savings.
Companies that employ a comprehensive “health and productivity management” (HPM) approach by integrating wellness and preventive programs with a value based health plan, disease management, EAP and safety programs, instead of keeping them in silos, have a better chance of yielding significant ROIs.
Best practices in HPM programs as reported by the Integrated Benefits Institute include: weight management programs, health coaching, participation incentives, on-site providers, return to work program and nurse case management.
HPM (comprehensive wellness) programs that employ best practices, a strong organizational culture of health, a well executed communication strategy and visible executive leadership participation and support have the best chance of achieving the highest ROIs.
Q: What kind of impact can wellness and fitness have on a company’s health care costs? How does a large-scale employer engender a healthy work culture, particularly if it’s a difficult environment, say like manufacturing?
A: It can have a significant impact, it depends on the “intensity” of the program (quality of programs, regulation communication, strength of culture and magnitude of executive leadership participation and support).
There are many ways, however companies that have had success with their programs report the use of wellness teams or committees; developing mission, vision statements and corporate values that revolve around health; incorporating environmental policies (formal & informal) that promote healthy choices, activities and habits at work; and the naming and branding of their programs along with a logo and taglines that communicate the program as a significant contributors to developing a strong workplace culture of health.
Q: The term wellness can be somewhat vague on its own. How do you define wellness for an employer and its employees?
A: Yes, it is. The term “wellness” has been used as an umbrella catch-all term for virtually everything, e.g. “financial wellness ….” I don’t actually define wellness for our clients, instead I work with our client liaisons to help them define wellness in terms that best reflect their needs and organizational culture. This is where an wellness committee with purpose can define wellness, through a vision, mission statements and core values can best represent the employees of an organization ….
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