Corporate Wellness Magazine: Ray, tell us a little about yourself and what you do now at Black & Decker.
Ray: My role at Black & Decker is all aspects of all benefit programs worldwide for Black & Decker employees, retirees and their dependents. If it has anything to do with the benefit programs it comes under me. My background is that I found myself getting into what I refer to as the accidental profession known as employee benefits.
Coming out of college when I decided to go to law school at night and had an undergraduate degree in Political Science and nobody else would hire me but a new health insurance company, I actually liked what I started to do. When I got out of law school I continued to work for them for a little bit and then tried practicing law for about 7 months and hated it, so I went back to what I liked which was health benefits.
I spent a total of about 7 years on the vendor side working for 2 different health insurance companies and almost 24 years managing benefits for large employers, 20 of those years with Black & Decker.
CWM: How important is corporate wellness? Is it the one of the only ways to reduce healthcare costs for a self-funded health plan?
Ray: When we look at our total benefit budget, I like to say that as healthcare goes so goes your benefits budget. When you trace all the various components of a benefit budget about .75 cents on the dollar, between medical and disability and other health-related benefits are driven by health. So if you have good health your costs will be managed and the overall benefits budget won't go up a whole lot, if health costs are out of control your benefits budget is out of control.
You never hear about the overall benefits budget being out of control due to life insurance or 401K or things like that. What drives your benefits budget for a corporation is the health of your employees and their dependents. We have actually focused all of our efforts in the last 10 years on engaging the employees and their dependents and making them accountable for their health care because we have really driven home the message that only they can impact their health profile, their finances and the company's finances.
Don't look to the employer, don't look to the insurance company and don't look to your doctor even. They are in the driver seat and we have a lot of tools and support and we have been able to manage our health care costs well below the national averages for the last 10 years by focusing on health and engagement.
CWM: What corporate wellness programs have you seen implemented at Black & Decker?
Ray: Well we have the whole range of traditional health programs that the large vendors have come out with like all the disease management programs, a lot of online support, a lot of coaching, health advocates, etc., but we have also created some of our own. We found that a lot of things that an employer can do you do not necessarily need an outside vendor to do. For example, one of my staff members Colleen created a program that is a play on the Biggest Loser.
We get groups of employees where they form teams of 5 and over a 60-day period they compete to see which team can lose the greatest percentage of their starting weight. Weight loss is always very difficult to do when it's by yourself because it's not fun and you are doing it by yourself. Colleen was able to take something and turn it into a group activity and make it fun. There is a lot of competition, they all develop fun little team names and sabotage each other by leaving treats like cupcakes in each other's departments so that they will eat them and perhaps gain some weight.
The winning teams typically lose about 10% of their starting weight over a 60-day period. We reward them with small cash prizes, the first place team always usually gets about $250 a person so it doesn't cost us a whole lot - it costs us a little over $2,000 per cycle, but it's a lot of fun. At one point some of the data that I looked at showed that we had about 15% of the employees in the company participating.
We create some of our own benefits, we designed something a few years ago where employees can get several hundred dollars a year to use for certain health promotion activities and is paid out through a limited use HRA. We have done some analysis where we can show you that by spending those dollars their health costs are lower than those employees that don't use those health dollars. There are some things that we do internally and some that we do externally.
CWM: What programs have had the most success?
Ray: Probably just employee engagement, that is all built around our communications style and strategy with our employees so it's not a program per say, but it is just a lot of communications and a lot of different channels. You just can't focus on one channel because everybody has a different preference on how they like to receive the information and just being very honest with employees.
If you are trying to do something but mask it for something that it isn't, it doesn't work. So we are just very honest with employees and say look, this is all about improving your health so one, you are healthier and more importantly the company's costs are better managed. It's a frank communication with our employees. They don't always like to hear the message and some would call it being brutally honest, but when you try to mask it as something else it doesn't work.
CWM: What is the best way to get employee engagement in wellness programs?
Ray: Honesty, but by also providing financial incentives. One of the things that we started doing a number of years ago was through our data warehouse we analyzed that one of our many lifestyle cost drivers was tobacco use, both smoking tobacco as well as smokeless tobacco. We as a company had already done a lot of the things that employers do in terms of banning worksite smoking and so forth, but you still have people congregating around your exits smoking so we pretty much banned smoking except for some very limited areas on our property.
Employees can't congregate around the exits any longer, they pretty much have to walk far away from the building and they don't like to do that when it is raining, snowing or when it's cold. We also put in a program where there is a cost differential where you pay for your health insurance based on both your tobacco and smoking status as well as your dependents, so if you or any of your covered dependents use tobacco or smoke you are going to pay more for your health insurance.
It's all HIPAA compliant and there is a pretty significant difference, bumping up against the 20% differential under HIPAA is all that you can do, but at the same time we gave 2 years advance notice and when we announced it we started from that day forward and have continued (6 years later) to pay for all sorts of smoking cessation aids, devices and support in full. If somebody does want to quit smoking, they can.
We have actually seen our smoking and tobacco use percentages go from around 30% down to about 19% or the high teens. We are probably down to the hard core tobacco users at this point, we probably got the low hanging fruit through this and the question is what do we need to do to get to the other 19% and I'm not sure what the answer is on that point. We had some success with getting people to quit through finances honestly.
CWM: What would you say to another employer that is interested in wellness programs, but isn't sure if they will get their return on investment?
Ray: There is a leap of faith and there are some things I imagine you can do that are really not going to pay off. I'm not sure if a national employer for example, that has announced that they are going to waive all co-pays for all office visits, I am not sure what the pay-off is there.
For most things, for example, our healthy rewards program gives $200 a year to use for health fitness clubs, exercise equipment, weight lose programs; it doesn't cost you a whole lot. First of all, a majority of our employees aren't going to use these things, so it's not as if you have to calculate, well I've got 1,000 employees and I have to spend $200 on each of them.
You may only get 10-20% of the employees using them so these programs end up not costing a whole lot and the worst case is you spend a few dollars and the best case is that you save a lot of dollars. Part of it is the leap of faith, part of it is trying to convince the finance staff within your organization that it is worthwhile because they never like to see you spend any money much less spend something today that is going to pay off a year or 3 or 5 years down the road.
Piggy-back on what some of the others do, we gladly would share all of our data with other employers and say if your finance department doesn't believe it I can share our study with you and you can share it with them. Sometimes you have to wait for someone who is a little more aggressive or a bigger risk taker to prove it so that you can go to your own finance folks to get the budget approved for it.
Jonathan Edelheit is Editor-In-Chief of the Corporate Wellness Magazine, the only Corporate Wellness Magazine in the industry focused on Health and Wellness in the workplace. Mr. Edelheit has been involved in US healthcare for almost ten years and ran a national healthcare administrator for almost seven years that administered healthcare plans for insurance companies, employers and governments.
While running the healthcare administrator Mr. Edelheit started to implement the first corporate wellness programs there through many tools such as health risk assessments, tele-medicine, e-health and many more options. Mr. Edelheit has been featured or mentioned in hundreds of media publications and in February 2008 was featured as a visionary in US healthcare by Executive Managed Healthcare Magazine.
Mr. Edelheit also organizes the Corporate Wellness Conference which is the only dedicated national conference on corporate health and wellness in the country and which targets employers, health insurance agents and large consulting firms. Mr. Edelheit is also an attorney.Jonathan Edelheit may be contacted at email@example.com