Thursday, April 28, 2016

Building a Strategic Wellness Budget

This post originally appeared on LinkedIn Pulse.

As an employer in the 21st century, you may or may not have given thought to wellness initiatives being a strategic tool for your business. Perhaps the reason for that is what it might cost to execute. When it comes to the wish list of workforce development initiatives, each has a cost and benefit associated and wellness might be a challenging one to weigh out. Let me take a moment and help by: A) Making the case for wellness’ strategic value and B) Showing how you can significantly remove the budget barrier.

Making the Case for Wellness

To first justify spending money on wellness, let’s ask a couple questions. Is it more or less likely that a healthy employee is bound to be more engaged and productive in their work? Physical, mental and emotional health are factors that stack the deck towards productivity. Do they guarantee it? No. But, it’s more likely. If the likelihood is greater, then the next question is even more vital.

Is it more or less likely that an employer vested in an environment that cultivates healthy activities and habits will produce healthier employees? Just as you proactively train employees in their skills or invest in the maintenance of capital equipment and facilities, your employees’ health are quite literally the heartbeat of your business. That’s what makes the next question perhaps the trigger point for moving wellness off the “want” list to the “need” list.

If you could enact simple, population health initiatives that focused on objectively measurable results, would there be any reason except budget for not making them part of your company’s strategic vision? Drawing from the same logic used in other business decisions, if we can identify a goal, track progress and measure results, wellness becomes justifiable. At the right cost, it becomes obvious.

How to Remove the Budget Barrier

Employers spend thousands per year on employee benefit programs. It’s no secret how expensive health insurance has become. Yet, the portion of dollars spent on managing illness versus proactively driving healthy behavior is laughable, if not virtually non-existent. For example, an average mid-size business may spend $200 per month towards a single coverage plan yet not spend a dime on a program to benefit that person making health change.

The first way to remove the budget barrier is by pulling from the enacted benefit dollars and segmenting into two buckets – preferred based on healthy behavior engagement and non-preferred based on non-engagement. Not only does the Affordable Care Act sanction this, but it predetermines your budget giving leeway of up to a 30% variance between the categories. The segmentation, when done right, shifts dollars out of the disengaged into the engaged population in a budget neutral manner.

The second way is to focus your efforts and reward for the items that have the potential to impact the largest contingent of your population. Instead of offering broad-based initiatives to cover all your bases (i.e. yoga classes or health coaching – not that either of these are poor options), keep the attention on physical activity and nutrition – 2 of the 3 leading health factors according to the World Health Organization. With a fitness tracker and access to nutrition education or food journaling, for example, you can engage employees in two critical tracking opportunities. Depending on your incentive and recognition strategy, I’ve seen a number of scenarios where employees bring their own device at their cost. At the very least, there are ways to offer cost-effective fitness tracking devices that have little to no impact on employer budget. Remember the old “Keep It Simple Stupid” method.

The third way piggybacks on that point. Stop doubling up on dollars spent in biometrics or health risk assessments if employees can still have their basic health assessed through their preventive exams. Health plans pay for that so direct employees there. Coincidentally, that also steers them into a primary care relationship which is yet another important piece to a healthy individual.

Lastly, if your Benefits Consultant isn’t bringing wellness strategy to the table beyond basic guidance, it may be time to look for one that can. With so much spent on that consultant’s insurance expertise, it’s yet another way to use existing budget to get more. I can’t help but to be incensed when I see organizations spending budget on a consultant that does nothing more than make introductions to wellness vendors. An effective insurance broker does far more than simply bring rates and insurer options to the table. They bring strategic expertise and guidance on how to execute a risk management program.

Make wellness culture a priority and do so creatively with low budget impact. For too long, we’ve allowed health to be treated and paid for reactively. The investment in wellness can impact long-term health in significant ways, not to mention make it more likely for a healthy, productive workforce to thrive.

Author: Drew Leatherberry | Benefit Consultant