What will Workplace Wellness Look Like in 2020?
by Viq Pervaaz
As we look toward 2020, all indicators point towards a rapid evolution of the U.S. workplace wellness industry characterized by innovative solutions for managing health care costs that serve the increasing need for proactive ownership of well-being. However, are advances in related disciplines being leveraged optimally, cohesively and creatively to provide for maximum benefit to both the employee and employer?
The corporate model of wellness programs ranges from education programs, to a more evolved model of on-site fitness facilities, incentive programs and HR driven wellness initiatives as part of an overall health and benefits offering. The 2014 SHRM Survey of Strategic Benefits – Wellness Initiatives shows that 76 percent of all surveyed companies had some form of wellness programs/resources. Among those companies two-thirds offered some form of incentive or reward program.
The results of these types of programs have already demonstrated the positive impact of a collaborative responsibility partnership between employer and employee in implementing a wellness approach and the reduction of medical costs. Several key performance indicators have been used for evaluation, including reductions in monthly medical cost spend, hospital admissions and employee absenteeism. According to SHRM, of the 30 percent who conducted a cost analysis of their wellness programs, 93 percent noted their programs were somewhat or very effective in cutting costs. This certainly demonstrates a return on investment (ROI) to the employer. In addition, the positive qualitative effect on the organizational culture cannot be understated, with direct impact on talent and team spirit as well as other variables that are incremental to the quantitative benefits measured.
This is particularly important given that variables such as an increasingly aging workforce (by 2020, the number of Americans in the 55 to 64 age group will have grown by 73 percent since 2000), an increase in predominant disease states (by 2030, 40.5 percent of the US population is expected to have some form of cardiovascular disease) and rapidly changing regulations added to the equation, employers are evaluating best and “next” practices to determine if these programs are truly optimized to realize their full potential of impact.
For the next iteration of workplace wellness, the lessons learned can be leveraged from the evolution of the traditional health benefit offering to a health exchange model or to the advances and learnings in personalized therapeutic medicine. The current opportunity requires a creative and innovative approach to health and wellness ownership. Coupling a predictive, proactive and fact-based wellness management approach with employee owned and led wellness decisions can provide a powerful and personalized platform. By maintaining this initiative in a structured and sustainable manner, employers are able to provide a more targeted approach of spending proactive wellness dollars for maximum ROI and decreasing the reactive spend on medical costs. These personalized programs will enable companies to better track and monitor costs and ROI with the goal to have more than 30 percent of the companies properly monitoring cost efficiencies. This is further supported by the fact that 90 percent said they would increase their investment in wellness programs if they could quantify the ROI.
Traditional medical treatment has evolved significantly from standard diagnostic evaluations to increased utilization of scientific advances, specifically in terms of personalized medicine. Medical decisions and treatments are tailored to an individual patient through a data-based approach to drive the efficiency and effectiveness of patient treatment. Similarly, there is an opportunity for the employee — within the framework of privacy regulations — to leverage this fact-based approach to optimize the value derived from a wellness offering. Two-thirds of employers involved in wellness initiatives typically provide some type of defined contribution or incentive towards wellness (e.g., fitness rebate); however, an opportunity exists to focus this spend on the desired health outcomes. This would provide the maximum benefit to the employee from a well-being standpoint, as well as to the employer for its investment.
While the powerful combination of data analytics and segmentation analysis allows a human resources team to facilitate a fact-based decision-making approach to right-fit an organization with the right individual in the right role at the right time, an organization can effectively manage the time and money dedicated to workplace wellness by creating a tailored program based on the individual employee’s current needs and critical influencing factors.
Employers have made the journey from self-funded managed health care to the growing trend of providing employees with a “shopping mall” of health insurance options, and on to formal health exchanges — gradually increasing the patient-centric involvement of employees in managing their own health care choices. The value drivers for this organizational transition include increased price competition based on the marketplace model as well as cost savings influenced by employers not overbuying health care coverage for their employees. This is exemplified by the vast majority of participants switching to cheaper plans in their first year of choice coverage. This undertaking by an organization is by no means a small effort, and it requires a good amount of diligence and change management —not only in creating the road map for the transformation journey, but also in properly structuring, executing and sustaining this approach. In a well-planned and structured implementation journey, the return on investment can be well recognized.
Similarly, a workplace wellness exchange can offer a suite of proactive health program choices designed to give the employee the responsibility to make an informed and impactful decision that is tailored to drive specific health outcomes. A marketplace approach can also drive competitive offerings from wellness solution providers and encourage a spirit of innovative and cost-conscious platform options — further maximizing use of wellness dollars. This model will encourage individuals to leverage their own personal health ecosystem information (e.g., current state baseline, lifestyle, environmental factors and disease state predisposition) to choose a solution that may help reduce reactive health care dollars spent based on disease state prevention and risk factor reduction. According to SHRM, year-over-year employee participation has remained flat. An innovative and personalized approach could help motivate and boost participation and would also continue to ensure that the individual employee’s wellness responsibility is shared in partnership with the employer. This would require an independent review of the process, structure and plan design, specifically as it relates to patient privacy and the impact to the holistic benefits offering.
Regardless of a company’s ability to track ROI, an overwhelming majority (72 percent) think their wellness initiatives are very or somewhat effective in reducing health care costs and 78 percent thought they improved the overall physical health of their employees.
As the impact of reactive medical claim costs on employers continues to increase due to a variety of influencers, proactive workplace wellness will likely evolve and become an inherent component of an organization’s benefits offering. This presents an opportunity to leverage recent learnings from other initiatives in the life sciences vertical to create an effective and efficient workplace wellness platform that is data-driven and tailored to the needs of the employee — providing a marketplace for choice and competition, and reinforcing the shared partnership responsibility between the employer and employee.