A healthy corporation
John Hancock Financial has reduced its expenses by investing in programs that help employees get fit and eat better
Three years ago, Amanda Spring weighed almost 230 pounds. She had high blood pressure and high cholesterol, and knew she was on track for serious health problems.
Today, she is 80 pounds lighter. She has run a 5K and 10K road race and works out daily. She hasn’t taken a sick day in at least two years. “I changed my whole lifestyle,’’ she said.
Spring, 37, made this transformation with the help of her employer, John Hancock Financial, which sponsors a wide range of fitness, nutrition, and health screening programs aimed not only at making employees healthier, but also controlling health insurance costs. With an investment of less than 1 percent of total health costs in wellness programs, Hancock has reduced medical expenses enough to keep annual premium increases, on average, about 3 percentage points below the national trend.
Next year, the company’s employee health care costs will rise just over 5 percent, compared with a national average of 8.4 percent.
“We believed that the only way to truly work toward health care cost reduction was to control the total spend, and to lower that spend by eliminating the need for care of lifestyle-driven illnesses,’’ said Peter J. Mongeau, vice president of human services at Hancock. “The only way to do that was through employee health education and behavior change.’’
Hancock, with employee health care costs of $55 million per year, is among a growing cadre of US companies making significant investments in preventive care and wellness programs as a strategy to reduce overall medical costs.
The idea is simple: Rather than just treat illness, prevent it by identifying workers with health risks, and provide the support they need to stay healthy. It costs more upfront, but in the long run, companies can avoid huge expenses that come with treating chronic illnesses such as diabetes, heart disease, and emphysema.
The share of employers offering at least one wellness program jumped to 74 percent in 2010, up from 58 percent in 2009 and 54 percent in 2008, according to the Kaiser/HRET Employer Health Benefits Survey. Comparable data are not available for Massachusetts, but JD Chesloff, executive director of the Massachusetts Business Roundtable, which represents some of the state’s biggest companies, said nearly all of his group’s 68 members are investing in wellness programs as a cost-saving strategy.
“There is more of a focus of keeping the employee healthy,’’ Chesloff said. “It is much more ingrained in the approach.’’
Over the past two years, companies with extensive wellness programs reported annual health cost increases that were about 2 percentage points lower than those for companies with small or no wellness programs, said Susan Connolly, a partner in the Boston office of Mercer LLC, a human resources consultancy.
It’s still a challenge to link specific programs to specific savings, Connolly said, but the consistent results are “a good indication that these programs are maturing, and they are having an impact on keeping employees healthy and away from seeking discretionary health services.’’
A Harvard University analysis of 32 peer-reviewed studies, published last year in the journal Health Affairs, supports that view. It found that medical costs fell by about $3.27 for every dollar spent on wellness programs, and absenteeism costs by about $2.73 per dollar spent.
“This return on investment suggests that the wider adoption of such programs could prove beneficial for budgets and productivity as well as health outcomes,’’ the authors wrote.
At Hancock, the wellness program, packaged as HealthMatters, is run by an in-house team that tracks data from the company’s two insurers, Harvard Pilgrim Health Care and Blue Cross Blue Shield of Massachusetts, tailoring offerings to match employees’ interests and needs.
A key component is an annual health risk assessment - a confidential questionnaire in which workers are asked about their health and potential risk factors. Employees get $50 for participating. If a risk is identified and they sign up for a recommended lifestyle management program - coaching to better care for themselves - they get another $50.
Once per quarter, the Boston and Portsmouth, N.H., offices also host Healthy Returns, a screening focused on blood pressure, cholesterol, body mass index, and smoking that includes one-on-one counseling for workers. Just over 40 percent of employees in these locations participate in that program.
In 2010, according to Hancock, participants in the program incurred an average of $261 less in medical costs than nonparticipants - a return of $2.50 for every $1 invested.
For the fitness-conscious, Hancock has on-site gyms, exercise classes, walking groups, and even boot camps, with intense activities such as running, calisthenics, and stair climbing. There are monthly seminars, webinars, and podcasts on everything from stress management to nutrition.
Hancock also just completed a one-year pilot in its Boston offices with the Danvers-based start-up The Full Yield, a program centered on nutrition that Hancock plans to extend nationwide in the fall.
Marion Reed, 56, a business operations manager, was part of the pilot and said it has helped her eat healthy and make wiser grocery-shopping choices. She attends Healthy Returns regularly, which she said has helped her control cholesterol and saved trips to the doctor. She also leads a walking group, Thursdays at noon.
Signing up for these programs is a no-brainer, she said: “The company is offering me this, and it’s free, and it’s while I’m at work. I’d be an idiot not to take it.’’
Yet wellness programs have a long way to go. The Kaiser/HRET survey found most companies are making only modest efforts, with much of the jump in 2010 attributable to employers adding Web-based resources. Only 31 percent included disease management in their largest health plan in 2010, according to the survey, and only 11 percent did health risk assessments.
Even at Hancock, only 35 to 40 percent of the 4,500 employees covered by the company’s health plans participate in wellness programs, said Mongeau, the vice president of human resources. Legally, employers can’t require workers to join wellness programs, but they can provide financial incentives, such as higher deductibles or premium cosharing for nonparticipants.
While Hancock executives won’t rule out such measures for the future, Mongeau said they prefer a more positive approach.
“We want the employee to own this at the end of the day,’’ he said. “This is more sustaining. Employees recognize that they’re attaining goals, and the company is helping them to attain them.’’
That’s certainly how Amanda Spring sees it. Through Hancock’s wellness programs, she has brought her blood pressure and cholesterol level to normal levels. She has changed her diet, and cooks with whole grains, little meat, and lots of fresh produce - making her sons and husband healthier, too.
And in the gym at 601 Congress St., where she exercises every day, she has discovered the joys of kickboxing, spinning, Zumba - and the thrill of a good physical challenge.
“It’s become such a part of who I am and it makes me feel good,’’ she said. “It’s an hour out of my day, and I use it to de-stress and get back to a sense of myself and what’s important.’’