University of Minnesota
May 21, 2013
Investment in the Wellness Program has so far saved the University and plan participants $1.63 for every $1 invested—a net savings of more than $10 million over the past five years.
As a self-insured employer with about 18,000 plan participants and 39,000 total members, healthcare costs are a significant part of the U's overall expenditures. While healthcare costs continue to rise nationwide, the U's well-established wellness program plays a significant role in fostering employee health and well-being and slows the tide of rising costs.
Investment in that program has so far saved the University and plan participants $1.63 for every $1 invested—amounting to a net savings of more than $10 million over the past five years. That includes a 33 percent reduction in actual hospital costs and a 40 percent reduction in preventable hospital costs (costs attributable to lifestyle changes), according to a study analyzing the plan by John Nyman, professor at the School of Public Health.
In just one element of the program—Weight Watchers at Work—participants lost an average of 9.8 pounds per 14-week session—more than 15,000 pounds overall during the first year of the program.
Nyman found that participants who engaged in health improvement activities needed less medical care than if they had not taken part in the wellness initiative. In addition, the number of hospitalizations among participants was down significantly, resulting in lower out-of-pocket expenses for employees and their dependents.
In 2012, the U of M doubled-down on incentives offered through its wellness program, launching a "Wellness Points Bank" in the hopes of continued savings and further improvement in the health of employees.
The U offers $300 for individuals and $400 for families, payable in the form of a premium reduction equal to an extra $12 to $15 per paycheck. The changes also include more ways for employees to earn those "points," like the U's innovative bicycling program, launched in 2012, where users can earn 75 points for biking to work on 50 days (U participants,—1,000 of them faculty and staff—have, to date, biked nearly 1.2 million miles and burned 32 million calories).
Since the launch of the Wellness Points Bank, the U has seen increases in all aspects of the program—with nearly 6,000 participants earning the full benefit in 2012, says health programs manager Karen Chapin.
In one element of the program—Weight Watchers at Work—participants lost an average of 9.8 pounds per 14-week session—more than 15,000 pounds overall during the first year of the program.
Studies conducted on behalf of the Wellness Program by StayWell Heath Management also show evidence that employees and their dependents are improving and maintaining their health. Data show that health risks (factors which signal the potential for disease) among UPlan members active in the Wellness Program have decreased 11.6 percent. Most companies are lucky to see 5 to 6 percent reductions, says Chapin.
"What I always think about is that it isn't just $10 million saved, but it's healthcare events that our people didn't experience—in hospital visits, prescriptions they didn't need to take, doctor visits they didn't need to go to," says Chapin.
Still, in a very real way, when employees benefit from participation, so does the U.
Earn $. Get Healthy.
If you're a U of M faculty or staff member covered by UPlan, sign up for Wellness Points now. There's still time to achieve your goals. Programs range from Weight Watchers at Work to a self-directed, personal health or wellness goal of your choice.
Deadlines for certain programs, such as enrollment in the tobacco cessation program and the bicycle commuter program, are May 31. The deadline for enrollment in the on-campus weight management program is May 22.
That's because the U runs a self-insured program, says Chapin, cutting out the insurance company and paying claims itself. One benefit of the approach is that, unlike insurance companies, the U doesn't need to make a profit. And while being self-insured can increase the U's risk, it also means that employees and the U have a mutual interest in health—when someone has a claim, it comes from the University and from employee contributions to the plan.
Ahead of the trend
Wellness programs like the U's are gaining in popularity among large employers, but when the U began its program in 2006, few employers offered much in the way of incentives. As recently as 2009, only 36 percent of large employers offered such programs.
But with the double-digit growth rates in healthcare costs, businesses are adopting such programs with the expectation that incentives will result in reduced healthcare expenditures and insurance costs, and at the same time, improve the health and productivity of employees while reducing absenteeism.
Employees, meanwhile, place a real value on healthcare benefits. Of the top ten attraction and retention drivers in the employment world, U.S. employees list healthcare benefits behind only job security as the most important reason they would work for and stay with an employer, according to a 2010 study by HR consultants Towers Watson.
The cost of medical coverage at the U was $214 million in 2012 ($12,032 per participant), not including employee out-of-pocket costs, up from about $213 million in 2011 ($11,750 per participant). Throughout 2013, the total cost is projected to increase, although still below the national average trend of 7 percent. Of the total medical plan cost, the University sets its budget to pay approximately 80 percent of this.
"We understand that there is value to both the employee and employer in maintaining quality health benefits—and quality includes affordability. Because if you make it unaffordable for employees to get care that they need, and they choose not to get it, that hurts everybody," says director of employee benefits Dann Chapman.
By implementing an innovative wellness program, the U has effectively enlisted the help of its employees to slow the tide of rising costs while keeping employees healthy. The result, says Chapman, is that the U has achieved a healthcare trend that has been lower than the national average.
The success of the U's Wellness Program is just one of many University efforts to achieve Operational Excellence. Learn more at excellence.umn.edu.