The U.S. Senate Committee on Health, Education, Labor and Pensions recently held a hearing on October 19, 2017 entitled “Examining How Healthy Choices Can Improve Health Outcomes and Reduce Costs.” The Senate invited an excellent panel of speakers from hospitals, academia, private industry and mental health advocacy to give testimony.
Here are our top five takeaways from this meeting, and why they’re important to the future of healthcare.
1. By modeling private sector programs our nation can become healthier and more economically competitive.
Dr. Michael F. Roizen, M.D., chief wellness officer, Founding Chair of The Wellness Institute at The Cleveland Clinic shared the medical center’s incredible nine-year journey to a culture of wellness. Their success is rooted in employees voluntarily choosing to stay healthy and having substantial incentives for doing so. In short, they pay employees to get well and stay well. In doing so, they report cost avoidance of over $250 million in the last seven years.
Roizen faced the same challenges that many employers face: a chronic disease rate rising seven times faster than the population growth. It is a major driver of the health care economy. The medical center’s health plan costs were growing at an unsustainable rate. Management faced the usual decision: cut benefits or increase plan costs.
Management decided to tackle the problem by addressing five critical health metrics: LDL cholesterol, hemoglobin A1C, BMI, blood pressure and tobacco use. They added chronic stress as a measure. The medical center began offering free stress-management and weight-loss classes, and they offered healthier options in cafeterias and vending machines. They even canceled decade long contracts with fast food vendors. Management encouraged indoor exercise during Cleveland’s snowy winters, and they stopped hiring smokers or hired new employees who smoked on the condition of completing smoking-cessation classes.
Initially, only 11 percent of employees participated, and they found that most were already very healthy individuals. In the next phase, they offered modest financial incentives as well as discounts on wellness products and services but participation remained low. Finally, in year three, the medical center established an aggressive reward and incentive plan, providing each employee with an opportunity to earn up to 30% of premium as a discount for completing a disease management program if they had a chronic condition or participating in a regular exercise program if they had healthy benchmarks. Employees signed up in droves, and today the participation rate among employees and covered spouses is 62 percent. Health care costs are nearly flat; trending at 0.6% in four years. Hospitalizations are down, and they’ve seen a 20 percent and 50 percent improvement in diabetes and LDL, respectively. Only 4 percent of employees are smokers. Absences are down and employee morale and engagement is up.
2. Real dollars are at stake. That’s one reason every organization should have an enterprise wellness goal.
There is an opportunity to save hundreds of billions of dollars each year, all on a voluntary basis. Roizen says America can change the driver from chronic illness to wellness and offers Cleveland Clinic as a blueprint. “We as a nation can make very positive and real impacts on the health of people while at the same time realizing billions of dollars in private sector and government savings.”
3. When it comes to wellness, being the biggest loser is okay.
Steve Burd agrees. After serving two decades as Safeway’s CEO, he founded Burd Health to help self-insured companies lower health care costs. Burd told the committee that a well-structured health plan can improve wellness and lower costs. He echoed Roizen by saying that 70 percent of health care spending is behavior driven, and by changing behaviors, organizations will realize long-term savings. Safeway focused on the same five measures as the Cleveland Clinic—and offered a $600 annual incentive. Nearly 85 percent of employees participated, as did the majority of spouses and family members. Safeway actually reduced its biological age by four years, and saw double-digit drops in all five biometrics. Burd retired from Safeway in 2013. In 2015, company healthcare costs continued to decline by 9% per year with no material changes in plan design. Imagine how savings like this will make your CFO happy this budget season?
4. Behavior science is key to smart plan structuring and incentive design to drive participation, improvement and achievement.
Dr. David Asch, Executive Director of The Wharton School, MD, MBA, John Morgan professor, Perelman School of Medicine and The Wharton School, executive director of the Center for Health Care Innovation, University of Pennsylvania agreed that workplace programs play a significant role in our nation’s health, and praised recent strides to make the programs better designed and fairer to all employees. Asch emphasized that much of a person’s health is behavior-driven, and said it is time to invest in the science of substantial behavior change. We need to learn more about how to break old habits and start healthier ones. He talked about the relatively new field of behavioral economics and incorporation of concepts like loss aversion to help both doctors and patients make better decisions. Asch said that programs designed with behavioral economic principles in mind—those that help employees change the behaviors they want to change—would be more health-effective, cost-effective and fair in the long run. Key ingredients are social acceptance, emotional engagement, and frequent rewards. “We know so much more about how to design these programs to motivate human behavior than we did even ten years ago,” Asch said.
5. Healthcare and the nation’s GDP are inextricably linked.
Jennifer Mathis is director of Policy and Legal Advocacy at the Judge David L. Bazelon Center for Mental Health Law. Representing the Consortium for Citizens with Disabilities (CCD), she also spoke about equity and fairness for all populations. She explained that while CCD supports employer-based wellness programs, they must be administered to provide workplace protections in line with the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act, laws which were put in place in response to a long history of workplace discrimination. Mathis emphasized the importance of keeping health information private and discouraged the wellness-or-else approach, which is often perceived as punitive by many employees with disabilities. She also touched on success stories in communities that have provided wellness programs to benefit their homeless population. These groups have experienced many of the same benefits that Roizen and Burd attested to.
A healthy lifestyle leads to longer and better lives. It can also reduce the nation’s healthcare costs which were 9% GDP in 1980 and forecasted to be 18% GDP (3.2 trillion) in 2015 and 20% in 2025 said Sen. Alexander opening statement. About 84% of healthcare cost go toward treating chronic disease. More than 60% of American’s get insurance on the job. By incentivizing wellness and well-being rather than only focusing on chronic disease, the U.S. will start to see a long-term change in these areas.
Here is the meeting in its entirety, in case you missed it.