Demand management emerges as key to wellness program success
Teaching employees self-care results in immediate cost savings
Demonstrating return on investment has been a major stumbling block in launching and maintaining workplace wellness programs for hospital employees, but a new paradigm in health care delivery not only shows an immediate impact on the bottom line, but also helps ensure more appropriate, effective care for those who learn to utilize it.
Many employee health practitioners have had a hard time convincing administrators to invest in health promotion programs for hospital workers, even though they felt those programs would provide positive results. (See related story in Hospital Employee Health, January 1995, pp. 1-4.) The problem lay in proving it. Wellness programs generally must be in place for three to five years before financial benefit if any can be shown, and budget-conscious administrators often are not willing to wait.
Enter demand management, a concept that shifts the emphasis from the presence or absence of illness to the factors that influence someone’s decision to seek health care and to choose among treatment alternatives. The basic idea is simple: While traditional health promotion programs attempt to reduce health care costs by preventing illness, demand management adds the component of cutting costs by reducing the demand for health care. You teach people how to determine if they should visit the doctor. In a work site health promotion program, demand management strategies reduce demand through programs that support self-care.1
Teaching self-care to employees can be an effective way to reduce health care costs when implemented in conjunction with wellness programs, says Ron Z. Goetzel, vice president of consulting and national practice for the MEDSTAT Group, a health care information consulting company in Washington, DC.
"A huge proportion of utilization is totally unrelated to disease and much more related to attitude and personal preferences," he says. "Teaching employees self-care methods, teaching them to question physicians about [treatment] alternatives, and to make more informed decisions about what will be beneficial to them can be very effective."
Although traditional wellness programs alone have shown savings, two main factors have impeded proving those savings, Goetzel says. One is that only a handful of sound scientific studies have been conducted; most of the research has not involved clinical trials or controlled studies.
The other problem is that some work site health promotion programs are too haphazard to produce any verifiable results.
"What is thrown into the broad category of wellness programs can be anything from a CPR class to a very intensive, comprehensive program," Goetzel says. "Programs vary tremendously in terms of comprehensiveness, intensity, and duration. We’re sloppy if we call everything that is being done out there the same thing."
The best wellness programs provide opportunities for individualized risk reduction, counsel high-risk employees (those who smoke, do not exercise, or who have high blood pressure, high cholesterol, poor nutritional habits, or high stress as determined by a health risk appraisal), and follow up on high-risk individuals within the context of a comprehensive program, he says.
They also must involve an organizational commitment, incentives to attract high-risk people, a screening and triage process, sophisticated intervention programs, and a program to evaluate outcomes.
"If a program has all the components of success it can make a difference in the bottom line," Goetzel says. The programs that are implemented are often half-hearted, however, and those usually do not show financial impact. More commonly, the measurement systems are not in place to document the difference."
Immediate impact seen
While Goetzel views demand management as an adjunct to wellness programs, another expert sees the reverse.
"Demand management is an overriding approach now, and wellness fits in as a component of that, not the other way around," says Wendy D. Lynch, PhD, director of Lynch Consulting Ltd., in Lakewood, CO, and a national expert on demand management and the effect of health promotion programs on health care costs.
Even with a well-run wellness program, a reduction in health care costs will not be realized any sooner than three to four years without demand management, she says. However, with demand management, "even with basic self-care, there is a visible impact right away."
Discoveries about the treatment of existing illness and about the decisions people make about health care show that neither the risk of illness nor existing illness is predictive of health care costs. To the contrary, people’s behaviors are more cost-producing than their illnesses, she says.
"For example, why do you go to the doctor when another person with the exact problem that you have doesn’t? Why do you see your doctor every single week for an ongoing chronic illness when another person with the exact same illness and severity doesn’t do that? Why do you choose to have surgery for a particular illness when someone else with the same combination of symptoms doesn’t choose surgery? It turns out that there is much more in your orientation toward care-seeking that is predictive of costs than how many illnesses you have or how severe your risk is," she explains. "We’re asking the question why some people do and others don’t, and yet they have similar outcomes."
Demand management, then, helps people have the "appropriate response to an illness or symptom," Lynch says. "What we’re trying to do is set up systems that help people become good consumers, so that if you’re bleeding profusely, you do go get care right now. If you’re diabetic, you do go get the kind of checkups you need, but if you’re arthritic and the physician can’t do anything for you, we can help you have a better quality of life without you feeling like your only choice is to have more medical care."
Components have been identified that influence demand for care, she adds.
"One of those influences is the existence of an illness or the risk of an illness, and that’s where wellness comes in because if we want to manage demand and make it absolutely appropriate, then what we would like to do is have everyone participate in prevention, and we can avoid having those illnesses ever happen," Lynch says.
Wellness services "round out" a demand management program for employers who have a dual goal of reducing costs and enhancing health, she adds, because in the long run incorporating wellness and risk reduction also reduces demand from people who would have become ill.
Demand management is not an attempt to withhold care, she emphasizes, but a way to teach people how to be good health care consumers. Employees can be taught to react to real emergencies quickly and to practice self-care, or to wait until morning to call their family physician when appropriate. Many employers are providing workers with toll-free numbers to call for medical counseling when a problem arises. Such services are backed by computerized information and physician assistance, she says.
Distribute materials to employees
Other employers distribute self-care books or booklets to employees, says Don R. Powell, PhD, president of the American Institute for Preventive Medicine (AIPM) in Farmington Hills, MI, which publishes self-care guides as well as other materials. (See editor’s note at end of article.) Materials can be distributed in conjunction with an educational workshop, which tends to increase utilization. The institute also provides promotional materials such as quarterly postcard reminders, a self-care newsletter, refrigerator magnets, and telephone stickers.
Demand management has emerged as a strong force in health care with the rise in managed care and capitation, Powell says.
"It’s a global term for prevention activities and care of chronic illness, but a subgroup is self-care or self-help management. Hospital employees can be taught to make better decisions regarding when to seek professional care vs. when they can treat themselves at home," he explains.
Self-care books or booklets use a simple algorithm or flow chart format to outline which level of care is appropriate for certain symptoms. Levels of care generally include: Seek emergency care, see a doctor or other health care provider, call a health care provider, or, if not serious, use self-care. For the latter, guides map out what kind of care procedures would be followed at home.
In one published study, a Florida hospital trialed the AIPM guides with 801 employees and demonstrated a $75.30 per employee savings over a five-month period. The savings resulted from 265 fewer physician visits and 99 fewer emergency department visits. Employees also experienced 167 fewer days of absence from work than would have been expected. Based upon the cost of the booklet ($2 per employee), the hospital’s return on investment was 38 to one, or $38 for every $1 spent in the five-month period.2
"It’s a proven return on investment that occurs in a relatively short period of time, whereas wellness programs such as smoking cessation and weight control may well take years to see cost savings associated with them," says Powell. "Also, with self-care, it’s easy to show return on investment in terms of analyzing claims data because you can isolate this variable as being the cause of the change. This is not to say that wellness doesn’t work; it’s just saying that you get a better return on investment when self-care is a component of your wellness program."
Cost-benefit ratios of wellness programs vary widely depending on their scope and content, as well as on the methods used to calculate return on investment, says Larry S. Chapman, MPH, chairman of Summex Corp., an integrated health management service consulting firm in Seattle and a national expert on workplace health promotion programs. For example, some program administrators include both direct and indirect costs and benefits, while others figure only direct costs.
No hospital should be offering a wellness program "unless it is doing things that are going to affect the economics of health inside the organization, and that includes interventions such as medical self-care, consumer education, health advice lines, and high-risk intervention," says Chapman, author of Proof Positive: An Analysis of the Cost-Effectiveness of Worksite Wellness (Seattle: Summex Corp.; 1996). "Those are the technologies that affect the economics. All those pieces need to be side by side with our more traditional primary prevention-oriented wellness programs if in fact we want them to be cost-effective."
With traditional "garden variety" wellness programs, the best return on investment is about 2.5 to one after two years. However, with a more comprehensive program incorporating newer interventions such as self-care, the ratio rises to 10 or 20 to one, he says.
The four areas of employee health care that have the greatest economic impact are health benefits, sick leave, disability management, and workers’ compensation costs. Those areas account for 18% to 22% of total payroll dollars, Chapman says. Costs for hospital workers usually are on the higher end of the scale due to the nature of the work and the people who do it.
"[Hospital] employers are putting employees through more and more stressful changes, such as downsizings, mergers, and acquisitions. Hospital workers tend to use about 110% to 135% more health care than other nonhospital-based populations, and some of the reasons for that are because it’s there, they know about it, and it’s comfortable technology. Also, there is a higher risk-factor prevalence among hospital workers than most other populations because they often are less prevention-oriented. The kind of people who go into the health care field tend to be the kind of people who take care of others and fail to do much self-care. There tends to be a fair amount of overweight, high stress, smoking, poor nutrition, and [poor health habits] related to shift work patterns," he says.
That makes combining traditional wellness interventions with self-care even more important in the hospital workplace. (See related story on p. 15.)
However, employers’ reasons for offering wellness programs vary, causing financial paybacks to vary as well, says Steven G. Aldana, PhD, an assistant professor in the physical education department at Brigham Young University in Provo, UT, and a national speaker on the effect of health promotion on medical care costs.
Offering traditional wellness services such as smoking cessation and weight management tends to help boost employee morale but have little or no impact on the bottom line, he says.
"It all depends on why you have a program in the first place. If you have a program because you’re interested in saving health care costs, then you need to do something else you need to get into demand management. That is an effective way to cut health care costs," Aldana says.
Demand management includes aggressive case management and making medical self-care and self-help materials available to all employees "so they can treat themselves and their families effectively and not show up at the emergency room when Junior has a cold," he explains.
"If you really want to control costs, you have to include some aspects of demand management. Health promotion and wellness are good all those things help but you are not going to see any kind of monster return because you have a program," Aldana says. "It all comes down to philosophy. The question is, why do you have a program in the first place? If you just want to enhance your image and help employees feel better about themselves and you, then by all means, do it, but you won’t see financial return. You will not see a change in the bottom line unless you start incorporating demand management, which fits very well into health promotion planning."
[Editor’s note: For more information on the American Institute for Preventive Medicine’s self-care guides, which range from $1.50 to $2.90 per copy, as well as instructor’s manual, overheads, video, books, software, and promotional materials, call (800) 345-2476 or (810) 539-1800.
Summex Corp. publishes a variety of wellness manuals on topics ranging from use of incentives to managing high-risk populations to cost-effectiveness analysis. For information, call (206) 364-3448.
See Hospital Employee Health next month for more on hospitals that have reduced employee health care costs by coupling wellness with demand management.]
References
1. Lynch WD. The potential impact of health promotion on health care utilization: An introduction to demand management. Am J Health Promot 1993; 8:87-92.
2. Powell DR, Breedlove-Williams C. The evaluation of an employee self-care program. Health Values 1995; 19:17-22.
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