Establish and Administer a Central Wellness Program for State Agencies

Establish and administer a Central Wellness Program for state agencies.


Background
Wellness programs for employees in the workplace are designed to prevent illness, disease or premature death through behavioral and organizational change. Wellness programs reduce health care costs while increasing employee productivity. 1

With rising health care costs, private companies are seeking ways to offer preventive health care programs that ultimately reduce these costs. These companies realize that as much as 55 percent of health care costs are due to lifestyle-related illnesses, and that many of these illnesses can be avoided through health promot ion programs. 2

According to a survey of 976 companies, the most effective programs were hypertension screening, cholesterol screening, smoking cessation, on-site exercise facilities, early cancer detection, accident prevention and weight control. 3 At the national level, the U.S. Department of Health and Human Services has placed health promotion on its national health plan agenda for the next decade.

A recent survey of state employee health benefit plans revealed that to control health insurance costs, 25 states have health education programs and 23 states offer wellness classes. 4 States with the most aggressive programs include Arizona, Colorado, Delaware, Florida, Kansas, Kentucky, Maryland, Minnesota, Montana, New Hampshire, New Jersey, South Carolina, Utah, Virginia and Washington.

Maryland s Club Maryland insurance program offers state employees health screening, family fitness walks, health fairs, health education seminars and a quarterly newsletter. Since the program s inception three years ago, participation has grown to about 15 percent of all employees. Club Maryland was originally funded with $250,000 from general revenue, along with corporate contributions and sponsorship. Now its $325,000 budget is funded by the insurance program.

Maryland s Employee Benefits Department administers the program with the help of 200 agency coordinators. An agency whose coordinator has been creative in supplementing the core program is eligible for a state grant that allows them to purchase such items as fitne ss equipment.

Maryland s insurance providers review claims for a variety of information, including how much is charged for various tests and medical treatments, and provide all the data to the Employee Benefits Department. With the cooperation of the ins urance providers, Maryland has determined the effect of health care cost avoidance by evaluating how many people received some type of health screening that led to the early detection and treatment of disease. From this information, they can estimate how much prevention costs versus how much it costs to treat a disease, such as a heart attack or stroke. 5

Minnesota found that sick leave dropped by 5.3 percent in the program s first year, while wellness participation increased. 6 Ohio s 11-year-old Safety a nd Health Awareness for Public Employees (SHAPE) program served 25,000 state employees in 1990 and bases its agenda on the personal needs of its employees by conducting preference surveys and concentrating on current health issues and trends. 7
A survey of 25 Texas state agencies found that 15 had some type of wellness program, generally focusing on lifestyle changes and fitness, but most were limited in scope, funding and personnel. Many agencies have Employee Assistance Programs (EAPs) that ad dress individual employee needs and problems, but seldom expand into wellness areas.

A primary reason state agencies do not have wellness programs is that they do not receive a line item for wellness programs in their budgets, which forces them to use money from existing sources for these programs. The result is insufficient funding for we llness activities, such as screenings. Consequently, most agencies give only part-time attention to wellness matters.

A few agencies, such as the Texas Rehabilitation Commission (TRC) and the Texas Youth Commission (TYC), have experimented with more active and comprehensive wellness programs. These programs offer quarterly physical fitness assessments, exercise programs and an annual health fair that includes body composition anal ysis, cholesterol screening, glaucoma testing, vision testing and diet counseling. TRC also offers free health risk appraisals to its employees upon request.

Other agencies, while not quite as involved, offer some programs to promote health. These agencie s include the Texas Department of Human Services, the Texas Commission for the Blind, The University of Texas at Austin, the Texas Department of Parks and Wildlife and the Texas Department of Public Safety. In addition to providing facilities for yoga, aer obics and weight training, some agencies offer brown-bag seminars, special speakers, health fairs, CPR classes and health screening.

The Texas Department of Health is responsible for providing rules to agencies and approval for establishing health promoti on and fitness programs. Current law authorizes agencies to use available public funds for health promotion activities and also calls for agencies to measure the program s results.

In a 1990 review of the Employees Retirement System (ERS), the Alexander and Alexander Consulting Group recommended that the Texas Employees Uniform Group Insurance Program establish a wellness philosophy and make a long-term commitment to creating a successful health promotion program. 8 The report recommended that ERS continu e monitoring health care cost and utilization patterns and implement employee programs that enhance medical benefits programs. The report also suggested that ERS develop a comprehensive health promotion campaign and focus its efforts on cardiovascular ris k factors, preventive health care and prenatal care educational programs. 9


Recommendations
A. The Legislature should mandate a centralized wellness policy and program for state agencies administered by the central personnel office (proposed for creation in the General Services Commission in a separate recommendation elsewhere in this report).

A state wellness program director should administer and coordinate statewide programs, serve as a central communication link, develop strategic planning for personne l and employee benefit issues and coordinate with the Employee Retirement System (ERS) to obtain utilization data. The Texas Department of Health should help the central wellness coordinator establish and approve the most cost-effective, appropriate and beneficial health promotion program for state employees.

B. Each agency should designate a wellness coordinator.

Wellness duties should be written into current employees job descriptions. No new employee positions will be required.

C. The state should use university or college interns to help administer wellness programs.

Students can fulfill degree requirements while agencies can take advantage of a service at no cost. For example, a private company, Waste Management Inc., obtained a college st udent working on a dissertation to teach a course and tabulate survey results at no cost. 10

D. The state should take advantage of free and low-cost programs and materials.

For example, coordinators could complete the TOP PRIORITY worksite w ellness program offered through the American Cancer Society. The society offers free training to organizations to start employee worksite wellness programs. This TOP PRIORITY program focuses on cancer and heart disease prevention, which are directly relate d to smoking. State insurance providers may have similar programs at little or no cost.

E. ERS should develop a system to monitor health care costs and utilization information. Health promotion programs should be provided so that preventive measures can be tied directly to the Texas Employees Uniform Group Insurance Program.

The effects of wellness program participation on sick leave and health care claims should be contained in ERS system and should be reported. The ERS should monitor the results and report the costs and benefits to the central wellness coordinator.

F. The ERS should require that insurance providers report claims and other health care data used for analysis and reporting.

G. The ERS and central personnel office should implement the recommendations of the Alexander and Alexander Consulting Group.

H. The State Employees Health Fitness and Education Act, Texas Civil Statutes, should be amended to reflect the above recommended policies.


Implications
Agencies could incur some administrative costs to administer wellness and health promotion programs; however, better employee health could improve productivity, reduce insurance costs, reduce sick leave and improve morale.

Insurance providers may be required to standardize their methods of compiling data reported to the ERS. The ERS would have to monitor and evaluate the data to determine the cost effectiveness of these programs; however, the benefits should be significant. Other states have found ways to work through these areas.


Fiscal Impact
Pos sible funding for the wellness program could come from state and employee group insurance premiums paid to ERS. Some available public funds would be dedicated to carrying out wellness activities, such as health screenings, equipment purchases and software programs to maintain employee data. This would have to be accomplished consistently among all state agencies.

Program administrative costs are conservatively estimated at $350,000 a year. This takes into account that an existing qualified full-time employ ee would administer the program and that there would be costs to administer the program, such as publishing an employee newsletter and other resource materials. Since the program s administration would be centralized, the administrative costs would be absorbed within the central agency. Costs to ERS to monitor and evaluate health care costs and utilization patterns cannot be determined at this time.

The state s estimated health care contribution to the ERS for the 1994-95 biennium is $1,307,788,000 (according to the 1994-95 ERS budget request). With costs to the ERS increasing at an average of about 14 percent per year, a centrally administered health promotion program could yield a conservative savings of 1 percent each fiscal year. Savings to a structured wellness program would not be anticipated until the 1996-97 biennium.

Savings to
Fiscal Savings to the General Other Dedicated Total 1% Cost Change
Year Revenue Fund 001 Accounts or Funds Containment Savings in FTEs

1994 $ 0 $ 0 $ 0 0
1995 0 0 0 0
1996 5,322,000 2,695,000 8,017,000 0
1997 6,066,000 3,073,000 9,139,000 0
1998 6,916,000 3,503,000 10,419,000 0



Endnotes
1 Employee Benefit Research Institute, Issue Brief, Report 120 (Washington, D.C., November 1991), p. 2.
2 Health Promotion Programs Yield Long-Term Savings, Business and Health (November 1992), p. 41.
3 Hewitt Associates, Managing Health Care Costs (Lincolnshire, Illinois, 1989), p. 59.
4 The Segal Company, 1991 Survey of State Employee Health Benefits Plans (Atlanta, Georgia, January 1991), p. 6.
5 Interview with Libby Lewandowski, Director, Club Maryland, Wellness Unit (Maryland, October 30, 1992).
6 National Association for Public Employee Wellness, State Wellness Updates, NAPEW News (Summer 1991), p. 6.
7 Ibid.
8 Memo from James W. Sarver, Director, Group Insurance, Texas Employee Retirement System, to Cheryl Lackey, Director, Public Health Promotion Division, Texas Department of Health (October 23, 1991).
9 Alexander and Alexander Consulting Group s report on the Texas Employees Uniform Group Insurance Program (November 1990), pp. 64-66.
10 Health Promotion Programs Yield Long-Term Savings, p. 42.