Healthcare Reform & Wellness: Just What the Doctor Ordered
All the so-called experts are screaming that the new healthcare reform act, aka the Patient Protection and Affordable Healthcare Act (PPAHA), is a catastrophe and we all better pack our bags and move to Canada. Well, don’t buy that ticket just yet. There are portions of this behemoth legislation that are actually encouraging, and one of them is its Wellness provisions.
The statistics are daunting: 75 percent of healthcare-related costs are the result of preventable chronic health conditions, such as type-2 diabetes, high blood pressure, smoking and obesity. No matter what reforms we put in place, the cost to the country both in terms of the physical health and fiscal impact on individuals, employers, insurance carriers and the overall economy will result in America’s economic tombstone epitaph that will read something like "It’s Wellness, Stupid!"
The shared interests of both the insurance industry and employers to see that Americans get and stay healthy will create a symbiotic relationship crying out for successful wellness programs. Why are employers the logical delivery vehicle for wellness programs? For one thing, individuals spend 50 percent of their waking lives at work, and that gives employers a great degree of influence and control over the health of their employees.
Employers also have a vested financial interest in ensuring employees stay healthy. Absenteeism, poor productivity and workplace injuries can all be mitigated with solid wellness programs. In one study, a San Diego based employer with fewer than 100 employees who instituted a wellness program realized over $20,000 through reduced absenteeism.
Insurers stand to earn substantial dividends working with employers to institute effective wellness solutions. Research is replete with the financial benefits of reducing healthcare expenditures through wellness programs. The Journal of Occupational and Environmental Medicine reported that every dollar expended on wellness initiatives resulted in a savings of $4.50 in medical expenses. The pressures to keep premiums down combined with the new MLR (medical loss ratio requirements of 85 percent) will force insurance carriers to find ways to see to it that more individuals stay healthy; once again, wellness will be the key.
Employers Key to Wellness Programs
Employers are the most efficient and effective pipeline for the implementation of wellness programs. With the looming reality of state "insurance exchanges," the only pragmatic method for communicating, motivating and controlling individuals’ use of a wellness regime is the employer. Statistics lead to a simple conclusion that left to their own devices, Americans do not avail themselves of opportunities to stay healthy. Even of those insured, only half receive vital preventive care.
While some of these insured do receive their healthcare benefits from their employers, many of those employers have yet to implement wellness programs. Those who purchase coverage on their own either do not have access to these initiatives or if available are not aware of their options. Trying to get insureds to opt into wellness campaigns through state insurance exchanges (scheduled to be in full force and effect starting in 2014) will be a futile exercise akin to herding cats. If at present only 50 percent of the country gets appropriate care, imagine the percentage if far fewer of those individuals derive their healthcare benefits from their employer. The results will be inevitable: a less healthy population, more absenteeism and a fall-off in industrial production, higher healthcare costs and massive drag on the national economy.
Role for Insurance Brokers
Insurance brokers will have a major role to play if wellness is truly to become an integral part of employment environment. Brokers must view their role not solely as a purveyor of insurance but also as a trusted business advisor. Acting as the logical link between carriers and employers, these advisors will constitute the hub connecting their employer-clients with an array of experts, including health specialists who can devise and implement wellness programs.
Additionally, a poorly monitored wellness plan can lead to devastating legal challenges for violation of discrimination laws and HIPAA requirements. A trusted advisor will serve their clients well by acting as a third party administrator (TPA) determining what medical information gets transmitted to which employees, thereby insulating and preventing HIPAA-based claims. This same TPA will also work in tandem with healthcare experts to vet the program for possible discriminatory practices.
Healthcare reform will most certainly change the relationship between carriers, employers, brokers, and HR managers, and there is opportunity within this evolving landscape. The challenge will be keeping costs down and increasing the health of the U.S. worker. There is no better controlled environment than an employer to accomplish these two seemingly contrasting goals, and robust wellness programs are the essential ingredient.