By JOHN O'ROURKE, vice president of human resources, and KATHY HAMMOND, director of benefits, for SCA Americas
SCA Americas, maker of personal-care products, tissue, packaging, publication papers and solid-wood products sold in more than 100 countries, spent $25 million on employee healthcare in 2006 for its U.S. employees--an amount that increased to $35 million in 2009 and that had been projected to reach $45 million by 2012 if no action is taken. Annual increases have been in the double digits and as high as the 20 percent range for certain union plans that pay 100 percent of healthcare costs for covered lives.
Even more disturbing has been an uptick in diagnoses for cancer and chronic illnesses related to diabetes and preventable coronary artery disease. Other areas of concern include increasing cases of asthma, depression, hypertension, hyperlipidemia (i.e., an elevation of lipids in the bloodstream involving cholesterol, triglycerides and other areas) and musculoskeletal disorders.
Amid this backdrop, it's easy to understand why the company decided to develop a "culture of health," aligning the design of employee benefits with a wellness philosophy that seeks to improve employee outcomes and, ultimately, lower costs.
One disturbing surprise along this journey to health was just how few of the company's 2,600 U.S. employees had been taking full advantage of their health-benefit plans. Additionally, despite incentives to complete health-risk appraisals (HRA), participation in HRAs was just 39 percent.
Healthcare utilization has been averaging only about 20 percent, with just 15 percent of employees having an annual check-up (even though there was no cost for the exam in most plans). Employees overall seemed to have a nonchalant attitude about preventive medicine, preferring not to visit a doctor until they became sick. About 38 percent of employees didn't even have a relationship established with a primary-care physician and instead would use the emergency room at their local hospital.
Not surprisingly, this means that employees have not been regularly screened for breast or colon cancer. Untreated chronic illnesses have been turning into catastrophic claims of more than $25,000 each as people began to age, resulting in a 53 percent cost increase over 2007. Examples include someone being treated for hypertension who suffered a stroke, obese employees in need of a hip replacement who failed to lose enough weight, or diabetics who didn't follow treatment protocols and ending up with amputations. In fact, 14 percent of employees had criteria for diabetes that was either unknown or uncontrolled.
Meetings at each worksite with management, employees and medical providers revealed one contributing factor: People in the more remote manufacturing plants, who often worked 10-hour shifts, didn't have the luxury of time to receive routine care. However, company data showed that spouses and children in these regions weren't receiving annual checkups either.
Complicating matters is an average employee age of 46 with almost limited job turnover. This means a workforce that is aging and driving up healthcare costs.
Interestingly enough, the same employees who didn't see a doctor didn't blink about admitting they would never skip an oil change on their car or truck every 3,000 to 5,000 miles or the annual maintenance on the company machines they operate. This simple analogy would later come in handy to encourage employees to live healthier and happier lives.
GETTING EMPLOYEES TO THE DOCTOR
SCA realized the first step toward a culture of health was to increase employee access to interaction with primary-care doctors and preventive exams. The company engaged the services of HealthNEXT LLC, which in 2008 began reviewing disability, medical and pharmacy claims data from every company location to determine the best course of action.
For 2010, SCA tweaked its health plan designs to further remove cost barriers to both preventive and chronic care involving key cost drivers.
One of these benefits changes was to cover free prescriptions on certain generic mail-order drugs. This aim of this investment is to increase compliance on critical medications and ultimately lower costs and improve outcomes. SCA also began to cover the entire cost of a comprehensive annual checkup for all covered adults and children so that employees and their covered dependents wouldn't worry about having to incur out-of-pocket costs related to important preventive measures, such as mammography, immunizations for well-child visits or other services. And in some cases, doctors are brought to the worksite weekly to treat employees on site.
Adding coverage may run counterintuitive to the prevailing action by many employers to respond to increases by shifting more costs to employees. However, SCA's goal is to affect behavior today and in the future. So while this additional coverage may cost the company more in the short run, in the long run it should improve health and costs.
OUTREACH AND EDUCATION
As part of education outreach to employees and their families, the company communicates through multiple channels that include a corporate intranet, e-mail, digital signage in every location and video. The aim is to consistently and repetitively promote actions that will contribute to improved health and to help employees better understand their benefit plans.
An increase in the number of home mailings is aimed at creating more at-home discussion among SCA's male-dominated, blue-collar workforce. By bringing this material into the home, SCA hopes its workers will engage in discussions at home with their wives, whose traditional care-giving role could help boost doctor visits for husbands and children.
The company is also building a network of providers around high-quality standards of care to improve employee outcomes and, in turn, lower costs. With so many employees without a "medical home," it is critical to improving outcomes. This developing effort may include a commitment to help physicians improve their own practice potentially through electronic medical records or other resources as part of a collaborative approach so they can focus on caring for the company's workforce without any barriers to care.
As a self-insured employer, SCA has both the right and responsibility to manage healthcare costs carefully. But it is clear that employees are quite sensitive to the idea of the employer having access to their medical data.
That is why it is so important to set up a program that creates a firewall for confidentiality as part of a partnership with HealthNEXT. While SCA reviews the data in aggregate, the medical staff at HealthNEXT reviews specific medical information and discusses it in person and by phone with employees who feel more comfortable knowing their personal data is not available to corporate employees.
By investing in an outside partner, SCA is able to assure confidentiality, which is increasing participation in the wellness programs.
While it's too early for SCA to measure results as part of a balanced-scorecard approach, the expectation is that this effort to bear fruit. And thus far, the prevailing lesson learned is that the best healthcare is almost always the least costly avenue to pursue.
Workplace wellness is now viewed as a core part of the SCA employee value proposition in the U.S. and a logical extension of the company's commitment to safety, environmental programs and becoming an employer of choice. It's also an investment in human capital that, no doubt, will pay major dividends down the line and help elevate the company's ability to compete in a global economy.
June 1, 2010
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