October 15, 2006
Behave Or Else
Pacific Northwest magazine staff writer
GREG GILBERT / THE SEATTLE TIMES
BUS DRIVERS KICK, step, clap and shout in unison during a spirited morning aerobics class at Metro Transit's South Base. Downtown paper-shufflers have their meetings walking down the street. Smokers attend classes to quit. Overweight folks sign up to learn about nutrition. Whole departments bond through group salad days.
All of them work for King County and all of them are doing what they do as part of an ambitious "wellness" experiment that ties what they pay for health benefits to the effort they make to be healthy. The approach represents a novel and relatively benevolent ripple in what has become a sea change in how employers are addressing health benefits.
The reason? You might say the health-care system is morbidly obese. Businesses are facing not only a more competitive global market and soaring shareholder expectations but also the inefficiencies and excesses of a voracious medical system. Workers are expensive. And unhealthy workers are the most expensive of all. In any given year, 10 percent of them account for 70 percent of the health-care costs. Many of the expensive chronic diseases such as some types of diabetes and cancer are lifestyle-related, meaning somewhat preventable. So it stands to reason that the picture would improve if people took better care of themselves.
If only it were that simple.
In just this past year, we've heard reports of companies playing hardball with employees in the name of the bottom line:
- A Wal-Mart executive recommended the company hire more part-time workers and discourage unhealthy applicants by arranging for "all jobs to include some physical activity."
- Weyco, a Michigan company, fired employees who wouldn't stop smoking.
- Stanford University health economists found that obese workers are paid less than their counterparts only when they have employer-sponsored health insurance.
The Tacoma-Pierce County Health Department has not hired smokers since 2002, and asks that employees take time to "educate" people who smoke within 50 yards of its campus. While an affidavit new employees sign makes it clear that health is the goal, it also notes just how much more, on average, a smoker costs for health care. Alaska Airlines has had a no-smoker policy for about 20 years. Except in states (like Oregon) that have laws against it, the company gives urine tests to applicants, screening for nicotine.
Non-smokers who've been cornered by a smoker have trouble sympathizing, and the associated health costs seem black and white enough. But privacy and workers'-rights advocates say smokers cloud the bigger issue. Demanding that employees not smoke anywhere, they say, is at the edge of a slippery slope.
DEMOCRAT DAWN MORRELL of Puyallup is both a state legislator and a critical-care nurse. She urges everyone who smokes to stop. Yet in the last legislative session she introduced a bill to make it illegal for employers to discriminate against smokers in hiring and firing.
"My colleagues said to me, 'I can't believe you are bringing this bill.' I said it was not about smoking. What's next? I know amazing employees who are overweight. Should they be treated differently?"
The session ended before the bill was resolved, but Morrell says she'll raise it again to force a conversation about fairness and privacy, if nothing else.
That conversation could be wide-ranging. How far will or can employers and insurance companies go in shaping behavior? Can they have a say about whether you're having safe sex or skydiving or driving without wearing a seatbelt as long as they are paying most of your medical bills? Employee-based benefits, after all, are a gift, not a right.
How will privacy fare in the rush toward health-care efficiency? Federal law protects our medical records, but in the real world, what is actually private? If it is OK to discriminate against smokers or the heavy, how far behind are subtle steps to move aside the chronically ill or disabled? They cost a lot, too, even though many of them did not lead a lifestyle that "asked for it."
Nobody has been willing or able to solve the health-care dysfunction. It is a $2 trillion industry with behemoth lobbies, so employers and health plans are putting more responsibility on what one medical professional calls the "less squeaky wheel." That would be us. The consumers.
The average employee contribution for health insurance has increased by 143 percent since 2000. Group plans are disappearing. A survey by the Kaiser Family Foundation revealed that 69 percent of U.S. firms offered health benefits in 2000, but only 60 percent did in 2005.
In these days of Weyco and Wal-Mart and ebbing group benefits, more workers are getting categorized the healthy and not, the good and bad, the wasters and the frugal in the name of "actuarial fairness." Tolerance is fading. Some say it's about time, that our health-care spending has been the equivalent of the teenager with his first credit card.
The King County strategy is being watched from across the country for the provocative niche it is carving.
First, it stirs a curious Seattle stew: the stark but en vogue mantra of "personal responsibility" with a hugging "we're-all-in-this-together" culture. Yes, some employees may pay more than others for the same benefits, but it is set up in a way that essentially begs everyone to succeed. The county's effort runs on an honor system meaning no one swoops in with a surprise nicotine test, and the only requirement is that each employee try.
And it skirts between two sharply divided views of today's employee health-care-insurance debate: sharing risks vs. paying what you cost.
But what really distinguishes the King County approach is the abiding faith it places in two relative unknowns: the long-term financial return of wellness programs and the human capacity to change behavior in ways that stick.
It has the potential to be a win-win. Employees keep their enviable insurance packages (no premiums and no-cost screenings) and learn to live healthier. County government hopes to save as much as $40 million by 2009 or 2010, believing preventive measures could head off many costly conditions.
Yet anything involving health care, money and human nature is complicated. The bus-driver aerobics class is a hit because supervisor Fredrick Coats is a charismatic fellow. He is dedicated, too, inviting drivers over to his house to weight train. But even he was initially upset by the idea of high-stakes behavior modification.
"The county, insurance companies or anyone else should not be able to legislate your life," he says. "But I guess some people need the push."
SOME PEOPLE most, actually need a push to get healthier. Today at the workplace, that increasingly starts with filling out an assessment about your health and lifestyle. Traditionally, only the healthy and the so-called "worried well" fill these out. Companies are more interested in collecting raw data on the not-so-well.
How do they get better compliance? Money, mostly.
Xerox gives employees who take an annual assessment a $200 credit toward benefits costs. By filling out the confidential assessment at the start of each year, King County employees can potentially save $1,200 in their annual out-of-pocket family health costs. The assessment asks standard questions about exercise, diet and other health details.
Employees with health risks have reason to be hesitant, though. Yes, assessments can lead them to preventive screening and a lifestyle change and are, they are assured, handled confidentially by a third party. But in today's bottom-line atmosphere, how does one know candor won't come back to bite? What is the cost to the employee labeled "expensive"?
"I'll never forget, it was in one of the newspapers, on the front page," says King County Executive Ron Sims. "Somebody saying, 'I'm not going to let my employer push me around.' Fine. Then pay more. We are going to shift costs on the people who didn't take the assessment because we think everyone could improve by taking it."
One county employee, in fact, faces the highest potential family-plan cost ($1,500 a year as opposed to $300 for the best tier) because his wife refused to fill out the health assessment. An administrator's husband looked at the form and asked, "When is Big Brother moving in?"
While money talks, it is most often crisis or epiphany that changes long-term behavior. What is important for workers trying to get healthier is time and opportunity. Employees are working longer, harder and under the stress of volatile times. It is one thing to be told to get healthy or else; it's another to give employees a fighting chance. Even apples instead of Twinkies in company vending machines might help.
"The 9-to-5 workplace does not exist anymore," says Jeremy Gruber, legal director for the National Workrights Institute. "That means less time to relax, relieve stress, exercise and eat properly. If employees are going to succeed, they need help.
"Employers certainly have a right to do something about health-care costs, but many are taking a more adversarial approach, employing a new system but with mid-'60s workplace policies."
So far, Sims is walking the talk. He realized he had fooled himself into thinking he was healthier than he actually was. He rediscovered his love of bicycling and has dropped almost 50 pounds. He hopes to be the symbol that keeps the experiment going.
He also has devoted considerable staffing and investment (more than $1 million a year to health assessments and coaching) to make his wellness plan work. The impetus: a 2004 study indicated 5 percent of those in KingCare (which incorporates the vast majority of county employees and their families) accounted for 58 percent of total plan costs. County management thinks that by intervening now its workforce can skirt many of those expensive chronic illnesses.
Full-blown wellness programs have yet to take off. Experts say many companies and health plans didn't see the rate of return. But in Sims' mind, the county's stable workforce presents the perfect population for a long-range experiment. "We have a very low turnover rate," Sims says. "Our average age is 47, and most are looking to retire in 20 years."
On the other hand, says the county's Caroline Whalen, who oversees the program, a middle-aged, heavily unionized workforce is not the most innately accepting. Younger employees don't show the same baby boomer suspicion. They figure Big Brother already knows everything about them.
During a presentation at a health conference, Whalen joked with Dr. Joseph Gifford of Regence Blue Shield about why a third-party wellness firm was necessary. "No offense," she said, "but employees don't trust health plans." Gifford smiled and replied, "No offense, but they don't trust employers, either."
The county gets aggregate data from the assessments, but its health consultant must keep individual results private and use them only to coach people who need help. The unions supported the program, and only about 10 percent of employees and their covered partners declined to take that first step. Ironically, compliance was so good that the county's expected savings have been pushed farther into the horizon because employees will be paying less of the immediate health-care costs.
To get the best rate, employees considered "medium or high risk" after the assessments must work on a program for improvement and speak with a health counselor two or three times a year. Half the employees and spouses who took the assessment were considered "low risk," 44 percent "high risk."
Because the county program runs on the honor system, employees can exaggerate, pass along their delusions or even lie in order to get the best deal. The county hopes cheating will become moot once employees take ownership of their health.
Some large companies seem to be making wellness work. The Caterpillar company has projected its wellness program may save about $700 million on health costs by 2015. Motorola reported in 2003 that it was saving $4 in health-care costs for every $1 it spent on wellness.
Employee behavior can be induced with a carrot or a stick. The American Institute for Cancer Research gives $500 to any employee who quits smoking for one year. But even carrots can be unfair. A local company offers a bonus for the sick days employees don't take. But one employee with a chronic asthmatic condition simply can't qualify.
ONE KING COUNTY worker stopped his union representative on the street and yelled at her for supporting Sims' plan. How could labor allow such invasion?
The reps supported the plan because they saw the alternative. The trend couldn't continue, Sims told them. If it did, health costs would strike $300 million by 2012.
"I told them we can't cut essential services," Sims recalls. "So we will do premium share, and we will reduce benefits and we will raise deductibles a lot. And we will do that after we start laying people off."
The numbers are grim for employers across the board.
The nonprofit National Coalition on Health Care says employer health-insurance premiums increased by more than 9 percent last year. The annual premium for an employer health plan covering a family of four averaged nearly $11,000, which is about how much a minimum-wage employee earns in a year.
Employer-based health care dates back to World War II, when businesses were subject to wage controls. To attract quality workers, they offered health benefits. Those who seek to overhaul the system consider the set-up a historical accident. Companies with 50 or fewer workers employ about 60 million Americans, but they are the hardest hit by soaring health costs and insurance premiums.
Without a doubt, there are over-users and people whose obliviousness leads to expensive conditions. The heavy use by a relative few is especially irksome because health officials say heart disease, some cancers and stress-related maladies can be avoided by doing things like eating better, exercising, avoiding drugs and alcohol and getting screened for cancer. In a 2003 report, the U.S. Department of Health and Human Services reported that more than 75 percent of all health-care dollars are spent on mostly preventable chronic conditions. That's the quandary. This country has never been so health-conscious and so unhealthy. Almost 60 percent of Washington adults, for instance, are considered overweight or obese.
The numbers also provide momentum to "personal responsibility" proponents who want to "price to risk." They value market efficiency over sharing burden.
More businesses and health-plan providers are nudging employees into high-deductible plans like the Health Savings Account. With the HSA, employees make contributions with pretax dollars to a fund. Employers may or may not match them. If consumers spend their own money, the reasoning goes, they will have more "skin in the game" and will be more discriminating in how they spend those dollars. The tax-deductible accounts travel with you so you won't be locked into a job just for the benefits. Enrollment in high-deductible savings plans (often paired with catastrophic health insurance) was 3.2 million in 2003 and is expected to grow to 11 million next year.
Kevin Corrigan, human resources director of the Seattle law firm Preston Ellis & Gates, says it began offering a high-deductible health plan with an accompanying HSA as one of its options last year, and about 10 percent of the employees are enrolled in it.
"In an industry that has for years shielded consumers from the actual costs of its products and services, these changes are monumental," Corrigan wrote in an industry journal.
Critics say these programs are fine for the young, healthy and lucky, but not so good for the older, chronically ill and poor. Many people, they contend, would hoard their benefit dollars and forgo spending on preventive care. And those who need extensive, expensive care would blaze through their funds.
There is another catch. Lost in the shaming about "lifestyles" is that even the healthiest, most well-behaved among us can get really sick or injured tomorrow through no fault of their own. That's when they have leaned on the group. A Kaiser study shed a dim light on how people with existing health conditions fare in the individual health market. Among the hypothetical patients was a 48-year-old breast-cancer survivor who was rejected coverage 44 percent of the time or was offered coverage with benefit limits or premium surcharges 38 percent of the time.
As of now, we are poor health consumers. Anyone who has waded through the Byzantine health-care billing system can attest to how hopeless it can seem. Finding the appropriate care is not like finding that perfect television set. To consumers, health care has long been about trust, comfort, prevention and ifs. More and more, we must learn to ask what does this treatment cost, and is it a waste of time and money? But how do we answer that?
IT HAS COME TO this because the health system is by far the most expensive in the world accounting for 16 percent of the country's Gross Domestic Product in 2004. Some say we've finally reached a tipping point.
Sims, like so many others, realizes that wellness and accountability on the demand side only go so far. With equal aggression, he began the Puget Sound Health Alliance, which includes regional employers, physicians, hospitals, patients, insurers and others. The goal is to find ways to measure health care and produce publicly-available comparisons that would improve decision-making and give payers a clear sense of what they are paying for. What are the best practices? Who is doing them?
It sounds ambitious, but there are glimpses of progress.
Starbucks was unhappy with what treatment of employee back pain was costing. So it worked through its plan and health providers, Aetna and Virginia Mason Medical Center, and concluded that expensive MRIs were being administered in too many cases and that patients were waiting too long to get what they most often needed: physical therapy. Now, the Starbucks employee sees a physical therapist with a back-pain specialist on the same appointment day.
Starbucks saves money by avoiding so many MRIs, but agreed to pay a higher rate for physical therapy to ensure Virginia Mason wasn't losing money on the back-care cases.
Dr. Robert Mecklenburg, Virginia Mason chief of medicine, says, "It is employers paying for the right care as distinguished from paying for more care. The right care often costs much less."
Mecklenburg says the medical center has accomplished similar results involving four high-cost diagnoses with four different employers the past year (including King County) and that applying those methods could reduce health-care costs for U.S. employers by 50 percent.
In the meantime, owning your own health can make a difference, says Metro bus driver Zayid Salaam, 56. It took a serious medical scare to get him to stop smoking and cut back on drinking. He never exercised until he joined Coats' class last October. His high blood pressure is dropping, and he says he hasn't felt this good in years. He hasn't even bothered to fill out his money-saving assessment form. That's not the point, he says.
"Those people who say the county is being invasive just want to sit on their butts and be lazy," he says. "The county has helped me get healthy again. If that's invasive, they can be as invasive as they want."
Richard Seven is a Pacific Northwest magazine staff writer. He can be reached at email@example.com. Benjamin Benschneider is a magazine staff photographer.
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