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The Role Of Workplace Health In Benefits

By: Denise Balch

Why have employers like NCR, Dofasco Inc., and Statistics Canada bought into the concept of workplace health? They understand, says Denise Balch, of Connex Health Consulting, and are willing to buy into the evidence that healthier employees make a healthier bottom line.

Workplace health initiatives can play an important role in improving employee health and managing the demand for employee benefits. In recent years, some employers have made this connection and have adopted a strategic health focus as part of their overall employee benefits strategy. Doing so has provided them with documented success, making them leaders in the workplace health industry and giving them national recognition through the Healthy Workplace Award program from the National Quality Institute (NQI) (

The rewards these employers report result in a healthier bottom line and document improvements in employee turnover, health, and morale. These employers also report reductions in absenteeism and disability, all of which contribute to improved productivity. They have moved from ‘It’s the right thing to do’ to ‘It’s the right thing to do and we can prove it.’

Why have employers like NCR and Dofasco Inc. (2002 NQI Healthy Workplace Award winners) and Statistics Canada (a 2003 Award winner) been early adopters of workplace health? Because they understand, and are willing to buy into, the evidence that healthier employees make a healthier bottom line.

Demand Driven

Yet, these employers are still pioneers and the benefits industry has been reluctant to accept and promote workplace health as a key deliverable that can address the drivers of benefit costs and embrace it into an overall benefits strategy. “The industry has made no substantive moves to address the root causes of the drivers of rising employee benefit plan costs. Benefit costs are demand driven and the industry has failed to address the demand side of the benefits equation,” says Fred Holmes, an independent consultant in the group benefits industry.

So what does it take to convince an industry steeped in conservatism that there are opportunities to begin to manage this equation? The answer lies in an examination of the evidence around us.

1. Benefit costs are rising and there are no solutions in the current benefits portfolio.
It’s no news to anyone who hasn’t been in a cave for the last 20 years that health and, consequently, employee benefit costs are rising higher than any other cost of doing business. Whereas typical health and dental family monthly premium rates were in the $60 to $80 range 10 years ago, it is not atypical to see $100 to $150 monthly premium rates for each of these benefits.

Our industry repeatedly points its collective finger to new product releases from the pharmaceutical sector and decreased service and coverage levels in the public health domain for the increasing cost of providing benefits coverage. It frequently forgets that it is the growing demand for services that is also a principal driver of health costs.

2. Employee health is costing Canadian employers more than they know.
Employee benefit costs are just the tip of the iceberg. Other costs that employers are not taking into consideration – because they are not tracking them or they don’t know how – are magnifying the burden of illness significantly. Some of these include casual absenteeism of, on average, 8.5 days per employee annually (2001 Statistics Canada data).

3. It is possible to identify the health issues that are driving benefit costs (Chart 1).
While statistics may vary by employer depending on employee demographics, the insurance industry and pharmacy benefits managers report that employers are spending much of their drug dollars on chronic or recurring conditions like cardiovascular disease, mental health, respiratory, arthritis, gastro-intestinal ailments, and diabetes. In some cases, these conditions are left undetected or under-managed leading to drug waste, increased absenteeism, and additional use of public health resources.

There are tools and resources available to employers that can identify the drivers of health costs in their benefit plan and the health risks of their employees. But until these tools are in widespread use and the results are used effectively, the data will sit on the shelves of benefits and occupational health departments and have little impact on the health of employees and the company bottom line.

4. Employee health can be managed.
Disability management is a proven tool and is in widespread practice to identify and manage the appropriate duration of disability and promote rehabilitation and timely return to work, resulting in reduced overall disability costs. Workplace health supports these practices by preventing disabilities. Liz Scott, principal with Organizational Solutions, a Burlington-based firm specializing in disability management, supports workplace health and says “Employers are moving towards integrated disability management and recognizing that personal lifestyles have an impact on who becomes disabled. This (workplace health) gives them a tremendous opportunity to take it one step further to influence healthy behaviours.”

The same access to information that facilitates disability management is also helping promote access to benefits data that will identify aggregate employee health issues. Once health issues are identified they can be managed.

5. Employees are easily accessible in the workplace and open to workplace health initiatives.
Almost half of plan members surveyed in the recently released 2003 Aventis Healthcare Survey say they currently receive health education from their employer. The national survey of members found that “…Not only do plan members take advantage of the health education provided, but they are also more likely to be satisfied with their benefit plan.”

The same survey says most employees (83 per cent) feel an obligation to help their employers manage benefit plan costs. In the opinion of the survey authors “This creates an opportunity for plan sponsors to move forward in implementing more specific cost-management strategies.”

If the employer and benefits industry buy into this opportunity to address some basic employee health issues in the workplace, what are the resources and benchmarking tools to guide them through the process?

No Overnight Solution

Workplace Health is not a one program or an overnight solution. Employers must adopt a strategic health focus to maximize their human capital and, as Danielle Pratt advocates in her book The Healthy Scorecard, employers must “understand the determinants of employee health, capability, and motivation” in the New Economy where business is “surfing on brainpower.”

Once organizations have made this commitment at the highest level, it must be communicated to plan members and it must infiltrate the organization. Only then are employers in a position to assess the healthrelated issues within their organization and deliver measurable health solutions through health promotion, education, screening, or management of disease.

The National Quality Institute (NQI) is a valuable resource for benchmarking the development, implementation, and sustainability of a healthy workplace strategy. NQI also provides recognition to employers through the Healthy Workplace Award program. Winners are subject to strict measurement criteria in the areas of:

Once an organization has reached Level 1 and made a strategic commitment, there are some basic tools that will help employers assess their employee needs and meet the planning criteria outlined by NQI. These tools are available through a limited number of consultants specializing in these areas that can help the employer co-ordinate the process and analyze the results.

Once the results of these tools are analyzed, the employer will have the information to identify the health and delivery issues that will allow it to plan a series of targeted and effective programs for employees.

In larger organizations, some workplace health solutions can be developed in-house. Here are a few examples of in-house programming:

More sophisticated programming is best outsourced to an organization specializing in delivering workplace health solutions. Here are some examples:

Measuring the impact of these programs is possible. In some cases suitable measurement may take the form of documenting participation and basic health information (with written consent) such as gender, age, height, weight, blood pressure, waist circumference, diet, and prior exercise routines. This information should be collected at the start of a program and participants should be resurveyed six months and one year later. This information should be combined with documentation of absenteeism and employee surveys. This kind of measurement has been used by organizations to support the positive impact of workplace health programming.

Golden Opportunity

Employers have a golden opportunity to enhance their group benefit offering to employees by introducing workplace health initiatives that can improve employee health and productivity, as well as manage the demand for group benefits. The workplace health industry is young, but it is prepared to respond to the needs of employers. At the risk of sounding like David Letterman on a Friday night, here is short list of the top reasons for an employer to adopt a workplace health strategy.

Fred Holmes summed it up nicely when he said that “Employers are perfectly situated to address some of the most basic drivers of healthcare costs with their workforce – drivers that include smoking cessation, overall fitness, diet, and mental health – and to guide those with risk factors for disease or underlying conditions to seek appropriate public health resources. Those employers will reap the financial benefits of their efforts and will be seen as leaders in their industry for doing so, and it is they who will be an employer of choice in the new millennium.”

Denise Balch is president and founder of Connex Health Consulting in Burlington, Ont.

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