To manage healthcare costs, an employer dives into employee wellness

Published August 24, 2018

When Todd Hershbine took over as COO for Minitab, a 40-year-old software company headquartered in State College, Pa., he assumed responsibility for human resources, as well. His first discovery: healthcare costs had been rising, but that despite those rising costs, his more than 230 employees, who spent a good part of their day sitting at desks, hadn’t necessarily been given the opportunity they needed to get and stay healthy. So about eight years ago, Hershbine sought not only a lower cost health plan, but a better long-term strategy for improving employee well-being.

He connected with Highmark Blue Shield (Highmark BS). And that began a partnership that’s kept healthcare costs in check.

Minitab has received single digit or negative increases eight out of the last 12 years, with the average increase since 2008 being 6 percent – without cutting back benefits. In 2018, employees experienced no premium increases, and utilization of healthcare benefits has decreased, says Hershbine.

Looking back, Hershbine says he knew little about health plans at the time. He met with his Highmark BS representative. “And I said, ‘can you help me understand your industry, so I can figure out how we plug into that?’ And the representative said ‘that’s the first time any customer has ever asked me that.’”

The two met with actuaries to learn how they set rates and estimate future costs. They pored over healthcare utilization reports to understand how employees were using their health benefits and what drove the majority of spending. 

Avoiding costs by keeping employees healthy 

They found two major drivers. The first was chronic disease, especially obesity. The next, a small number of employees with more complex medical needs. For Hershbine, a lightbulb went off:  Highmark BS could help him empower employees to manage or avoid chronic diseases, and keep employees with more complex needs from getting sicker. 

Russ Creely, a Highmark Blue Cross Blue Shield (Highmark BCBS) sales executive with national markets, says that Highmark BCBS can help clients like Minitab ensure sicker employees are receiving the care they need, when and where they need it. For example, the health plan’s nurses can coach employees about managing chronic conditions, and even help coordinate care between doctors. Highmark BCBS pharmacists can review medications for duplication or suggest more cost-effective options. Those kinds of programs can help lower an employee’s out-of-pocket costs.

Account executives can also help employers understand the opportunity to avoid healthcare costs by keeping employees healthy. The key: preventing or managing chronic diseases like diabetes. Left unmanaged, chronic diseases worsen and affect quality of life. Employees and employers end up paying more to treat them.

Hershbine got to work.   

Building a culture of wellness – and an onsite swimming pool

 “We started to design fitness and wellness initiatives - meditation sessions during the day, an onsite gym, access to individual trainers for a low co-pay, a visiting nutritionist,” says Hershbine. “We actually built an onsite swimming pool.” 

He rewrote human resources policies to encourage employees to exercise during the day, to make exercise facilities accessible and foster a culture of wellness. 
Today, about 90 percent of Minitab’s employees are engaged in some wellness program. And there are individual success stories, like the employee who lost 150 pounds.

But how does Hershbine know whether the company’s efforts are really making a difference? Data, says Mark Jacobson, D.O., medical director with clinical sales at Highmark BCBS.

Measuring results

“Not only do we review a client’s results,” says Jacobson, referring to healthcare spending, “but we show them how we’ve used population health and wellness tools to manage their employee population and rein in that spending.” For example, Jacobson says, have these tools encouraged employees to get regular health screenings, find a primary care doctor, utilize the emergency room appropriately or take advantage of programs to manage their weight? 

Minitab’s Hershbine says the experience has changed the way he thinks about health benefits. “Most HR people think it’s about negotiation and pounding on the table for lower rates,” he says. That may save money in the short term, says Hershbine. But without investing in employee wellness, chronic diseases worsen, claims keep climbing, and an employer may face an even bigger increase in the next year, resulting in higher costs for employees as well. 
Partnership, says Hershbine, is the better bet. “It’s about working together to understand what drives healthcare costs and how to use wellness to bring those down.”

Highmark Blue Cross Blue Shield and Highmark Blue Shield are  independent licensees of the Blue Cross Blue Shield Association, an association of independent, locally operated Blue Cross and Blue Shield companies.