The State of the Health and Productivity Management Market

Mark Head

Dec 9, 2009

The market acceptance of, demand for, and sophistication levels of health and productivity management (HPM) programs continues to increase.  Importantly, most employers remain committed to their programs despite the economic turmoil of the past year that has yielded a 25-year high in unemployment levels.

The Integrated Benefits Institute (IBI) conducted a recent survey of 400 employers in conjunction with Harris Interactive and found that a substantial majority (sixty-eight percent) of employers offering some form of HPM program plan to add resources to at least one program, and only four percent plan to decrease resources.  Another twenty-three percent plan to maintain existing HPM resource commitments, while five percent are cutting some and increasing other resource levels.   This is particularly encouraging in the light of a separate IBI analysis that reveals increases in unhealthy lifestyle choices – more people smoking daily, drinking more and exercising less – that are directly correlated to rising unemployment.

Within the HPM market itself, several macro trends are continuing:

• The market remains very fluid and is evolving very rapidly.
• More employers are shifting to a view of HPM programs as a strategic necessity. 
• The number of service providers and product/service offerings continues to increase dramatically.
• Active guidance by consultants is driving far more in-depth vendor scrutiny and consideration of account management, program design and cultural support capabilities.
• A commonality of key program elements has begun to emerge.
• Social networking concepts and technologies are proliferating.
• Value-Based Benefit Design and behavioral economics are converging in the HPM space.
• he sophistication levels of outcomes and cost savings reporting continues to increase.

Program components have begun to constellate around a population-wide, annual cycle that includes:

• Health risk assessments and biometric screenings administered during a defined time frame at the beginning of each program year.
• Outreach by nurses and/or health coaches to participants throughout the year based on their risk factor status.
• Incentives management, often via a points-based system and which can include merchandise fulfillment.
• Program rewards, often via premium credits, but that may also include cash, gift cards, merchandise and paid time off.  Importantly, the total value of rewards being offered is increasing, often to as high as $500 - $600 per year or more.
• Team and/or individual challenge programs for weight management, physical activity, nutrition, stress, etc.
• Employer events listing and online or telephonic sign-up, especially for biometric screenings and Challenge Programs.
• Ongoing educational and awareness-raising activities such as workshops, webinars and online educational courses.
• Active support for wellness committees, groups of site leaders and/or program champions.
• Condition-specific online health management programs.
• Special programs for tobacco cessation and weight management.
• For larger employers, on-site clinics and other on-site services, including the use of kiosks and other biometric collection devices, are on the rise.

As social networking continues its meteoric rise, HPM companies are grappling with how to incorporate the various forms of the technology into their platforms in an intuitive, high-impact way.  Team challenge modules were the first kind of social networking for most HPM companies, but now the muscular technology behind websites like Facebook can support much broader forms of health-oriented intervention and collaboration, and the 140-character limit and ease of following others on Twitter can even be used to push promotional and educational messages to members via mobile devices.  HIPAA-compliant collaboration platforms that link program participants with vendor coaches and nurses, as well as with the members’ physicians, EAP providers and even consumer-driven sites like Microsoft HealthVault and Google Health are rapidly reshaping the industry’s engagement strategies.

Traditional economic theory holds that people make informed, rational marketplace decisions that are in their own self-interest.  As applied to the field of human health, however, behavioral economics reveals that the limited information, knowledge and experience levels of the average person, coupled with a bewildering array of choices, often results in unwise, unhealthy and costly decisions.  Value-based benefit design responds to these issues by focusing on optimized use of medical resources, improved lifestyles and behaviors and increased reimbursements for providers achieving higher compliance levels and better clinical outcomes.

As core sets of program components become more prevalent, as educational, awareness and intervention formats linked to social networking rise, and as health plan design and HPM program activities become more tightly linked, outcomes and cost savings reporting are becoming more robust, and include such things as:

• The ability to measure and compare datasets from health risk assessments, screenings, medical claims and absenteeism.
• The ability to validate medication adherence and compliance improvements and link these to reduced ER, inpatient and average length of stay metrics among high cost, disease and chronic condition members.
• The ability to identify and outreach to members based on claims data, expanding the targeted group from the 5% - 10% typically included in disease and chronic condition management programs, to as high as 25% - 30% of the group.
• The ability to understand and track through claims data the “risk migration” and turnover among the top 15% of claimants, which is especially important given that as high as 60% of top claimants this year are new claimants versus last year’s top 15%.
• The ability to analyze year-over-year costs for HPM participants versus non-participants, from multiple vantage points, including the group as a whole, and group subsets such as chronic condition members and high cost and/or high care gap members.

The industry itself, as well as employers that are embracing HPM, will continue to evolve rapidly and broadly.  Some of the more important questions yet to be fully answered include:

• What is the best methodology for determining return on investment (ROI)?
• What is the ROI on our program?
• Why is the health of this member improving, but the health of that member is not?
• What is the best incentive structure – the required activities and the available rewards – for our program this year?
• How can we continue to deepen our employees’ commitment to health improvement and keep the program fresh and dynamic?
• What is the right way to evaluate prospective vendors from both a capabilities and an outcomes standpoint?

 
Most would agree that overall program success continues to rest heavily on the cultural health identity being built within the organization, which in turn rests on the engagement levels and support of senior and middle management.  While social networking functionality expands the impact of bottom-up initiatives, budget priorities are still determined from the top down.  Without a strong financial commitment and visible participation by the organization’s leadership, wellness and HPM initiatives are more likely to become marginalized as other competing business priorities intervene.

When one-third of American deaths happen in the hospital, according to the Agency for Healthcare Research and Quality,   there is ample reason to promote healthy lifestyles that will help keep people out of the hospital altogether.  And while a substantial majority of the players and observers in the market agree that “wellness works,” everyone is grappling with the questions of “why” and “how much.”  Even after evaluating studies on fitness initiatives covering over 38,000 employees, lead researcher Dr. Vicki S. Conn of the University of Missouri in Columbia told Reuters health, “We do have really good evidence that the interventions do work," she said. "What we couldn't say…is that this intervention works better than that intervention."

A significant part of the current state of the industry is the quest to understand the why and the how much of things, so that they can be replicated and scaled.  More and more of the pieces necessary to answer those questions are becoming available.  The vendors who can bring the pieces together consistently and clearly will take the industry to the next level.

  http://www.prweb.com/releases/2009/11/prweb3151964.htm
  Ibid.

  http://www.nbch.org/NBCH/files/ccLibraryFiles/Filename/000000000222/VBBD%20Purchaser%20Guide.pdf

  http://abcnews.go.com/print?id=8996490

  http://www.reuters.com/article/healthNews/idUSTRE59R52K20091028

Mark Head is Chief Solutions Officer of Viverae, Inc. (viv-AIR-ā), a national provider of comprehensive health management solutions that helps corporations reduce health care costs through improved employee health.  Dallas-based Viverae helps employers and their employees control health care costs by identifying, addressing and reducing health risks before they turn into significant medical expenses. Mr. Head provides strategic health management services, including workplace wellness programs and integrated wellness and medical and disease management benefit design and delivery for Viverae clients. He brings 29 years combined experience in the health promotion, wellness, health insurance brokerage and consulting businesses.

He previously served on the Chairman’s Council of the Foundation For Responsible Television, which funds and distributes the McCuistion Program, an issues-oriented television program on business, social, economic and public policy concerns and challenges. An active member in the community, he has served on numerous board and steering committees for Dallas organizations, including the Dallas Chapter of the National Association of Insurance and Financial Advisors and the Dallas Junior Chamber of Commerce.