A Doctor in the House

Striking statistics, and satisfying to Dr. Pamela Hymel, M.D., who was given the somewhat unenviable task of designing and implementing a company-wide health management program to reduce costs and improve employee well-being.

After serving as corporate medical director for two years, Dr. Hymel was named director of benefits and medical services for Hughes in 1994. By the following year, she had reduced workers' compensation costs by nearly 50 percent (saving the company $30 million) and cut the average number of lost workdays from 61 to 44 days through an innovative program of case management. Her efforts paved the way to target other areas for cost reduction.

"By focusing on case management for the workers' comp project, we found we could make an impact on overall costs," says Hymel. "When I took over in the benefits arena a couple of years later, I believed we could translate some of those lessons into a very good integrated disability management program and better health for our workforce. We wanted to reduce the number of disability days for employees, change behavior to reduce the instances of disability cases and ultimately reduce costs."

The WorkWell Program

In the early to mid-'90s, disability management didn't exist for Hughes employees, and according to Kim Perkins, corporate manager, Health & Welfare Plans, there were very few benefits that promoted prevention. In addition, the company was undergoing some dramatic change and was gearing up for a large reduction in the workforce due to divestitures and reorganization.

"At that time, we didn't have company programs in place to help our employees identify health risks," says Perkins. "We needed to create a comprehensive way to package new benefits and then communicate those programs to employees. In 1996, the concept of WorkWell was born."

WorkWell was Dr. Hymel's answer to containing health care costs in a changing environment. The program was designed to address modifiable risk behavior for employees in Hughes' self-funded medical plan - it focused on health care costs before they happened.

"WorkWell is an integrated wellness program geared at those areas where employees can modify lifestyle behavior and impact their overall health and related costs," says Hymel. "Today, about 40 percent of employees are enrolled in the Hughes self-funded medical plan, and qualify for the WorkWell program."

The process to get WorkWell off the ground was a fairly straightforward approach.

"Before designing the program, we performed a complete health claims review," says Hymel. "We examined health care costs and found that three issues were costing us the most money: cardiovascular care, back conditions and lack of self-care."

Watson Wyatt's Bruce Kelley and Dr. Hymel compared medical claims to a reference database of preventable conditions. The analysis specifically identified coronary heart disease, low-back pain, congestive heart failure, asthma and diabetes as hot spots.

"Hughes was spending a lot of money on issues that could have been avoided with intervention," Kelley explains. "Things like monitoring blood pressure and cholesterol, smoking cessation, weight management and back care - Dr. Hymel was able to get buy-in from management for the WorkWell program by communicating that they would see a return on their investment by focusing on modifying some risk behavior in these areas. And it's working."

In fact, in the first two years of the program, health care expenses for conditions that had an avoidable component were reduced 7.3 percent. In particular, cardiovascular disease costs went from 12 percent of total costs to just 5 percent. Other areas Watson Wyatt identified as primary preventable claims improved as well - things like lower back pain, high blood pressure and cholesterol management.

Overall, Dr. Hymel estimates that Hughes has reduced its disability compensation costs by 35 percent. And in key areas like hypertension, back problems and breast cancer, expenses have gone down nearly 50 percent.

"One of the most impressive aspects to Hughes' approach to disability management has been their ability to stay with the WorkWell program, track it and adjust it as needed," says Watson Wyatt's Gary Gausman. "Watson Wyatt did an evaluation one year after the initial launch, and then again two years into the program. In both instances, we found a positive return on investment. That makes it easier to suggest enhancements and continue to incorporate employees' suggestions for improving the system."

After completing the health claims review, Hughes subcontracted with Johnson & Johnson to conduct on-site health screenings, or health risk appraisals, focused on the target areas. In order to encourage participation and create broad employee interest, Hughes offered a $200 reduction in health insurance premiums to all participants who completed the program, as well as a $50 gift certificate for completing the health risk appraisal. Johnson & Johnson encouraged employees who could not come to work-site screenings to visit their physicians for biometric tests that would then be sent back to J&J for a final appraisal.

There were several reasons for subcontracting these activities, including a very real concern about confidentiality.

"Some employees voiced concerns regarding confidentiality where the company was sponsoring health care initiatives," says Hymel. "We had to make it clear in our communications that we at Hughes never actually know which employees participate in a risk reduction program. We know we have a certain amount of employees in a specific high-risk category, but we never know their identities. In this way, we can manage the areas of concern, plan for future enhancements to the program and address the issues our employees are concerned about?without compromising the trust of the workers themselves."

The process works like this: an employee interacts with a Johnson & Johnson (or subcontracted) case administrator for the screenings. The employee receives on-site counseling and an interpretation of the report. For those involved with the risk reduction program, all follow-up is also directly with J&J, and none of that employee's information is shared with Hughes. Johnson & Johnson supplies a list of successful participants to Hughes' recordkeeper so the employee receives the $200 reduction in health care premium.

"The only time we ever get involved is when an employee volunteers information about a condition like high blood pressure or cholesterol and asks us to check it for them at the medical center," says Hymel. "Some other medical centers do these activities - screenings, counseling, reporting information - without subcontracting, but we were reluctant to do that. We want our people to feel very comfortable participating, and given our participation rates we believe they are."

Part of that comfort level was derived through clear, consistent communications about WorkWell, including a print campaign outlining the details of the program and feedback mechanisms like an 800 number for employees to call for questions or an appointment. Feedback on WorkWell's customer service is very positive, including some truly inspiring success stories.

"One of the things I'm most proud of is the story of an employee who went through the proper screening process, was prompted by the results to do a follow-up visit with her physician and subsequently found out she had colon cancer," says Perkins. "Her diagnosis was made in the very early stages of the disease and she was successfully treated. It's happy endings like this - which occurred because the employee took advantage of WorkWell -that make us feel so good about this program."

Continued Success

In its first year, the WorkWell health screenings identified 32 percent of the population as high-risk, and 90 percent of those employees participated in risk reduction programs.

Success like that creates another challenge: how do you improve results moving forward?

First, Hughes partnered with its claims administrator, Aetna U.S. Healthcare, to introduce disease management programs. Watson Wyatt conducted a disability survey to identify ways to further reduce the number of disability cases. And Hughes made cost savings in the original "problem" areas a priority as part of large-scale plan to revamp the entire WorkWell program.

"When we looked at the numbers for the first phase of WorkWell in 1998, those areas that we specifically targeted returned a cost savings of $567 per program participant," says Hymel. "Those numbers have impact. And for employees, I think one of the keys to this program's ongoing success is that we tie it all back to something meaningful like their health care premium reductions. Employees can see and feel the benefits."

Upon reflection, Dr. Hymel and Perkins offer a few pieces of advice for other organizations attempting to implement a plan to reduce health care costs: look at what claims are being driven by modifiable behavior and where the highest costs are, and then design the program around those types of claims. In addition, design the program with tangible results in mind - both in terms of measuring the success of the benefits and by going beyond appraisals to offering real health care solutions.

"We concentrated on preventive care in order to eliminate problems before they appear," concludes Perkins. "It's important to be conscientious about measuring return on investment and feeding that information back to the people involved. But we also get a lot of satisfaction out of knowing that we've put a program in place that educates employees and helps them and their families lead healthier lives."