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5 Q's Brokers Should Ask Customers Before Starting a Wellness Program

Benjamin Prinzing
Dec 13, 2015 1:23:21 PM

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It’s that time of year again, and we’re all busy with health plan renewals for 2016 and looking at how the Affordable Care Act, may or may not affect our customers and our own businesses.


A common topic popping up is, “What should we do about employee wellness in 2016?” Whether you call it “worksite wellness,” “employee well-being” or “population health management,” I think it’s safe to say, we’re all working towards having healthier and happier workforces that never want to quit.

Now, there’s some controversy around this whole "wellness business" and its return on investment (ROI). If only a financial return is what your customer is after, then they're really missing the bigger opportunity to make a much easier and controllable impact in other areas, such as improved health, employee retention, company morale and even talent acquisition to name a few.

The new term being used is, Value On Investment (VOI); what the employees will get out of the program, and how that will affect the overall business. One person off depression medication, one smoker quits, or one raving about your company on social media to their friends is always a win in my book!

The next time you’re sitting down with your customers, here are 5 questions I see that are often overlooked when the subject of “employee wellness” comes up:

1.     Do we have an operating plan?

As with any business strategy, start with the end in mind. What are your goals of this program? Is it simply to create a supportive environment, provide health education, improve health and/or only control costs? Answering these questions can help you decide on a program framework, determine resources needed and the budget required to write your operating plan.

According to both Dee Edington, PhD,  at Edingon Associates, and Larry Chapman, MPH, founder of the Chapman Institute, there are three main frameworks or levels to choose from; Traditional, Comprehensive and Champion, (though Chapman uses different terminology). Often, we see employers with a Traditional program, but are looking for Champion-level results, so understanding how these models are structured can help you set realistic expectations to senior leadership. 

Check out one of our case studies about the importance of planning.

2.     Who’s in charge?

The responsibility of wellness programs commonly fall on Human Resources, though most of them already have a full plate or may not necessarily have the expertise to develop and manage a program. Determine who’s in charge, if they have time and whether the time allotted is sufficient to meet the goals of the program. If not, you may want to consider adjusting the program goals, or outsourcing some or all of your program management efforts.

3.     How will we measure success?

Measurement requires data or a baseline. You can evaluate the effectiveness of the program from one annual health plan renewal to the next. Most companies start small and simply measure participation; others measure health improvement changes via a health assessment or job retention. Regardless of what goals you have set, make sure you have data to back up the goals' rationale, so you can measure it again later.

Typically, if you’re not reaching over 50% participation in the program, you’re probably missing the employees who need the most help. In this case, you may need to reconsider how you can increase participation. And as a side note, incentives are not always the best approach. At Kadalyst, we’ve helped groups reach over 90% participation without any incentives. At times, you simply need more time to educate the importance of the program and what’s in it for the employee and the employer. Remember, a confused mind says, “No.”

 4.     Do we have vendors or partners?

There are lots of wellness vendors out there providing all kinds of services. Some have health risk assessment tools and online wellness challenge platforms, while others include health coaching programs and biometric screening events.

Now, are these just vendors, or are they partners? The difference? Do they have any incentive or vested interest to meet the goals of the program? A simple way to ensure this is by creating a tiered pricing model based on performance.

A common oversight is that often program participation is not measured against program costs. So what is the actual cost per participant? And is that number acceptable? If you’re paying $3.00 per employee per month (PEPM) and you have 20% participating, then your cost is actually $15.00 per participant per month. If employees are participating every other month, your cost is now $30.00 per participant. Be weary of “PEPM” pricing models, because often they do not speak to utilization. At the end of the day, when you pay for “PEPM” programs, the vendor is paid a set amount regardless of usage.

5.     How will we fund the wellness program?

There are many ways to get creative when it comes to funding wellness programs today, and it doesn’t always have to be 100% out of the employer’s pocket. I see insurance companies stepping in and providing annual “wellness credits,” benefits consultants embedding wellness costs into the overall healthcare budget, and there are even new private exchanges launching in 2016, that have wellness services embedded for free for their members.


 No matter what, if you can help your customers come to the table with a real plan in place, someone in charge, baseline data to start from and partners instead of vendors, then you will have an “investment summary,” vs. “spreadsheet pricing” to present the business case to leadership. “It takes a village” approach is going to be your best bet, to not only get the program funded, but to see successful and long-term outcomes.


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