The Limeade Blog

How to Spend Money on People, Part II: Wellness as a Free Line Item

In Henry’s prior entry “How to Spend Money on People,” he put the ROI on $2 worth of wellness in perspective.  I agree -- it just doesn’t make sense to skimp on such low cost fundamental prevention, particularly when it drives employee engagement (and profit).

So you want to do wellness, but your CFO has made it clear: there’s no budget for anything new or extra this year.  Which begs the question…

What if you could do wellness without having to justify that new line item?

In my 15 years in the insurance industry consulting on corporate benefits packages, I’ve learned enough about how health benefits are mixed up, baked and served.  Trust me; if you want wellness (and speaking of wellness), there is PLENTY of FAT to trim elsewhere.

Making the Right Tradeoffs

Here's the basic tradeoff equation (and opportunity): low use, low perceived value vs. high use, high perceived value.  In practical terms, who wouldn’t trade something that a minority of people use, and may well be unnecessary, for something that serves 75%+ of your population and people actually appreciate?

It’s actually really easy.  Here are a few examples of basic tactical tradeoffs – you may have already made some of these changes, but to varying degrees even one or two can often do the trick:

1. Separate in/out of network deductible accumulation
2. Add a separate Rx decutible (affects more folks, but usually prudent for brand categories anyway)
3. (Further) tweak ER coinsurance and co-pays
4. (Further) increase out-of-network maximums, coinsurance and co-pays

Here’s how the basic math works – depending on your current plan design, one or some combination of the above adjustments can easily equate to about 0.5% in premium reduction or funding.  If you assume a $700 composite health care rate – that equates to $3.50 per participant, per month – more than enough to fund a terrific wellness initiative across your entire organization.

Make Sure It Fits Your Company

There are other ways to fund (and more than pay) for this stuff, in a way that feels right and establishes a “we’re in this together” vibe with your employees vis-à-vis health care -- such as tweaking employee contributions, designing premium-based incentives to kick off some dollars, or making more broad-based changes to benefit design in order to align incentives and create more engaged "consumerism" in health plan consumption.  The reality is, too, if you are fully-insured, your broker simply ought to be able to negotiate 0.5% out of the carrier, anyway.  But we’ll save some more goodies for later…

In any case, if you are willing to make some simple, logical tradeoffs (and your broker is doing her/his job) you will get everything you want for your people “for free.”  And if you do it right, you need not present your wellness program as an extra initiative with a separate line item cost.  You can just bake it into your renewal in an entirely appropriate, justifiable, value-adding way.

The Bottom Line

Bottom line – envision two months post renewal, and you’ve installed a vibrant, best-places-to-work-style wellness program – based on tradeoffs you should have made anyway.  Your employees (or clients) will thank you.

Why?  Because prevention and wellness have the biggest bang for the buck in the health benefits world!

And again, it’s not difficult! We actually provide our Limeade Alliance members (and they tend to be the best advisors anyway :-)) with tools to make this an easy reality for their customers.  Ask us at sales@limeade.com...

Onward!

How to Spend Money on People

Our lesson today is about perspective.  In most of our posts, we subtly hint that there is a better way to do wellness (for which “BUY OUR SERVICE!!!” is often the cleverly hidden subtext).

Today we are actually sharing a different way to look at how to spend money on your employees in general.  How to get the biggest bang for the buck.

Why?  We know that our little niche fits somewhere in the mind of the HR exec.  Every now and then it bursts panting into the CFO’s or CEO’s office, and then it leaves again.  With rampantly unhealthy employees, spiraling costs and profit pressures – not to mention the shining white knight we call health insurance reform – it is getting its fair share of attention, both positive and negative.

And while I love the attention it receives (almost any PR is good PR), it is entirely out of proportion with the dollars spent on it.  Two years in business school taught me that every dollar invested should yield more than a dollar in return (I’ll skip the opportunity cost of capital and hurdle rate lectures).  I get it.  But arguing over the $2 to $10 per employee per month a comprehensive wellness program costs can be a bit fatiguing.  If you believe in its benefits (resilient, high-performance, loyal employees), the cost discussion is, frankly, a waste of time.
Allow me to illustrate.  (The size of the bubble equals the size of the expenditure).

How to Spend Money on People

The exact list and location of each “employee benefit” will vary by company.  Trucking companies may value drug tests over cool office space, for example.  But you get the point.  (Nice two-by-two matrix, huh?  I told you I went to business school!).  The breakdown:

1. Buy the “No-Brainer” services (wellness, EAP, comfy chairs, etc…).  They provide the biggest bang for the buck.  They will build morale, culture, productivity and loyalty almost for free.  Find the “No-Brainer” services that fit your company.  Bus passes?  Martin Luther King Holiday off?  Free Celery?  You pick.  And make sure they reinforce your most strategic, culture-building employee messages.  When others see people smiling when they talk about working at your company – they will assume you pay better (and you won’t have to).  For example, wellness (done right), is a tiny investment in the productivity and engagement of your workforce
2. Buy the “Think Hard” services after…. thinking hard.  In fact, “Think Strategically” is pithier (but wrecks the clean layout of my chart).  We won’t say more about compensation, bonuses and company location here – I am sure you have enough people offering their advice there.  We know most of your money, time and attention will go in this quadrant – as it should.  Look for efficiency, excellence and employee delight
3. “Make Cuts” wherever you can.  Your best employees won’t leave what is otherwise a great place to work if you tweak some weird out-of-network spousal co-pay minimum, or if you get rid of the second corporate jet.  Model intolerance for waste.  Companies with attentive CFOs don’t have a lot of money in this quadrant.  In our next blog post, we’ll help you find cuts in the engine room of your health benefits.  (Important note:  This is where underperforming employees live)
4. Whatever.  If people like Mint Tea or Frisbees, well... whatever.  Don’t waste time creating policies to double check the under-ripe Starbucks bananas I expensed at the airport, please.  If you need snacks for the quarterly meeting, buy them!  (Do me a personal favor and reconsider the whole donut thing, though)

I dedicate this blog to insurance expert Mike Johnson (of Bay Area brokerage Johnson & Dugan), who adeptly asked:  "Companies hung up on the ROI of wellness should ask:  What is the ROI of health insurance?"  (It does cost 200 times as much, after all).

Let’s pick some low hanging fruit.  Then let’s eat it.

We’ll need the energy for the big stuff.

Sustainable Awesomeness and the (Real) ROI of Wellness

If your business success depends on people, then you ought to care about the health and wellness of those people.  It's a little obvious.

But how much should you care?  Enough to spend some money?  The return on investment debate rages in the business of wellness, so let's take it on.

First, a quick primer.  Here’s a simple look at why companies started implementing employee wellness programs in the first place.

Stuff You’ve Read 100 Times So I’ll Keep It Short

The short answer every wellness vendor (including me) wants desperately to give is that investing in prevention and wellness provides large, measurable, short-term returns on investment.  And it does.

You’ve probably heard that…

• Employer health costs have more than doubled in the past 10 years
• Chronic disease (the vast majority of which is avoidable) accounts for 75 percent of US healthcare spending
• We could realize an 80 percent drop in health care spending if we radically change unhealthy behaviors and aggressively treat chronic diseases

(Sources and resources:  the Almanac of Chronic Disease, 2008 Edition, the Henry J. Kaiser Family Foundation site, and http://www.chronicdiseaseimpact.com/)

By now you are probably both nodding in agreement and shaking your head side to side – at the same time.  Be careful – this motion can and will hurt your neck.  You know this already; the question is what to do about it.

First, take a deep breath.  Know that wellness does work.  Take comfort in knowing that companies investing in wellness get:

• 26.5% lower health costs
• 25.3% fewer sick days
• 40.7% reduction in workers’ comp costs
• 24.2% lower disability management costs

The cumulative effect is a 5.8x ROI -- with pretty nominal initial investment.

(Think 0.25% of your health insurance bill, for starters).

(Source:  Proof Positive:  An Analysis of the Cost-Effectiveness of Worksite Wellness, Sixth Edition, 2007)

If you actively screen your population and manage risks and conditions, while encouraging healthy habits, your company will save money.  Period.  In fact, “Our system now does not incentivize anyone to get preventive care except for the employer.  The employer is the only one who benefits from healthy people," notes health cost guru Dr. Dee Edington.

The smartest minds in healthcare have staked their reputations on these savings.  Evidence-Based people, like Surgeon Generals, Secretaries of Health, the folks at Mayo Clinic, the Cleveland Clinic and Johns Hopkins (organizations that actually make money when you go to the hospital), Chief Medical Officers, and on and on.

So we have a serious problem; bad health is bad for people and profits.  Fortunately, we have a tangible solution that can start solving that problem right now.  And, as a bonus, the positive return is five times more money coming back to us than we put in.  And yet, having said all this, I feel the need to embrace one of my company’s core values and “Speak Plainly.”

ROI is not always as simple as we wellness people would have you believe.

What Wellness People Avoid When Discussing ROI

ROI is very hard to measure anywhere in business. Most businesses, no matter how hard they try or how well-intentioned they may be, are not rigorous scientific settings.  Look around you.  Is everything feeling controlled, labeled and 100% data-driven?  Probably not.  Why?  Most likely, it can’t be.  In most businesses, the sheer number and interdependence of variables, the lack of statistically valid control groups, office politics and other factors make truly scientific measurement – of anything – a daunting task.

Data guides our decisions, but it can’t make them.

ROI is hard to measure in business in general, but it gets worse:  measuring ROI in wellness is (gulp) especially hard to measure, for at least seven reasons:

• Cost analysis is hard (and expensive).  Big, sophisticated companies analyze risks, costs, claims and clinical data, often with the help of healthcare analytics companies and health plans.  Safeway, Johnson and Johnson, EMC – all of these great companies publicize the economic benefits they’ve achieved (like $150 million savings annuity for Safeway).  But most companies that haven’t cracked the Fortune 500 don’t have the wherewithal to copy the big boys (and girls)
• Benefit analysis is hard (and expensive).  Wellness produces more than one type of measurable benefit or “outcome” (health, productivity, employee retention, job performance, sick days, safety incidents, etc…).  It is not like search marketing, where all metrics (page views, clicks, conversions, sale amount) lead to two simple numbers:  sales revenue and program profitability
• We can't agree on what causes outcomes.   Causal relationships vary based on whom you ask.  Psychologists may say self-leadership.  Pharmaceutical companies may say “taking your meds”.  Smoking Cessation companies may say “quitting smoking.”  Prevention experts may tout resilience, peer support and flu shots.  The rest of us may go along with “following doctor’s orders.”  All are correct, for some people, sometimes
• Outcomes like health, well-being, productivity, and profits are – in most cases – highly statistically correlated.  This makes causal arguments complicated, at best.  I know this because untangling statistical relationships is a big part of what we do at our company, Limeade.  (Learn more by emailing us at science@limeade.com)
• Wellness initiatives are not the only factors affecting outcomes.  Even the easiest outcome to measure -- health costs -- depends on inflation, work culture, hiring and benefits strategies, broker/plan commissions, specific health plan choices (co-pay amounts, spousal coverage, provider network fees, generic drug policies, etc.) and more.  These are hard to control for in statistical studies.  Productivity requires even broader systems thinking – for two reasons:
  • We know of at least 20 factors which meaningfully contribute to productivity (only a few of which are “health risks”)
  • Productivity is measured in so many ways (by self-report, by financial metrics like revenue per employee, by “time at work,” and others)
• Separating one wellness initiative from another is difficult.  OK, so you saved 20% year-over-year with a wellness strategy.  Was it due to a better health risk assessment completion rate, better blood-sample-based risk screening, better routing to resources/interventions, better resources/interventions, an influx of healthy single people, a new health plan, or more engaged leaders?  Clean lines are hard to draw
• Some outcomes take longer than others to show up.  When you quit smoking, there may be instant productivity bumps (higher energy level, fewer smoke breaks, higher birth-weight babies) – but other payoffs (e.g. avoiding lung cancer and chronic respiratory disorders like emphysema) may materialize more slowly

So What the Hell Are We Doing Here?

Let me summarize.  Everyone likes ROI.  Everyone claims Wellness has ROI.  But ROI is hard.  In wellness it is even harder.

And yet we are “all in” on this bet.  Why? (Or, as my wife would ask:  “WWWHHHHHYYYYY????”)

We start with a different question.  Instead of “what are the costs and how can we reduce them?” we ask:  “Have we really maximized our potential for fitness, vitality and everything else that makes companies buzz with energy?”

The question is fundamentally different.  By pursuing it, we've concluded that the actual ROI of wellness – especially the right kind of wellness – is much higher than people think.  Working on the answer to this question is also just a lot more fun.

Think back to the figures supporting a 5.8x ROI for wellness programs: LOWER health costs, FEWER sick days, REDUCTION in workers' comp, LOWER disability comp costs.  The fact that “things suck a lot less with wellness” is well-supported by the data.

But can we legitimately throw words like BETTER, STRONGER and MORE into the wellness ROI soup?  Think about better employee engagement at work.  Stronger and more loyal employees and customers.  More Revenue.

These things are hard to measure.  But just because things are hard doesn’t mean they are not worth doing.  Trying to measure and improve important things, even if they come in complex and interdependent systems, is worth it.  “The link between a company's employee engagement and its bottom line is real:  the more engaged the workers, the higher the sales and profits,” summed up Business Week’s Michelle Conlin in her recent article “Is Optimism a Competitive Advantage.”

Think about the value of your company's brand.  It's "what people say about your company when you are not listening."  It is what engages people at an emotional level.  Brand, like wellness, is an integrative concept, measured by the financial premium it delivers.  Like wellness, brand is hard, but not impossible, to measure.  And it takes great companies with great courage to invest in it.

They ”Just do it.”  ;-)

Screw ‘Wellness’

Actually, I have to admit:  even though I use the word 34 times in this article, I hate ‘wellness’.  Insofar as it defines a market category in which we sell our service, I guess it’s OK.  (Better than no category at all, I suppose).  But screw ‘wellness’.

The word itself is wimpy, vague, ineffectual -- even if what it does is not.  Can we for one second think a little bigger, be a little bolder?  Let’s be positive for a second and call it something else.  How about 'abundant sustainable vitality'?  Awesomeness.  Butt-kicking juice.

ROI 'To Do List'

I will leave you with a few simple recommendations.  Do these things and you will get your ROI:

• Decide if people provide your competitive advantage.  If not, don’t bother with wellness.  If wellness programs do not directly contribute to your 3-year business plan, please don’t bother.  If they don’t build your brand, skip 'em.  As Paul Larsen of V1 Global Consulting notes:  "Wellness is not an HR program or initiative; it is a state of mind organizations need to embrace in order to compete in global business"
• Choose the culture you want.  Culture will form with or without you – so be intentional about your engagement strategy.  Align wellness and benefits strategies with your leadership philosophies and business strategies.  Consider whether the “you’re fat and we want you to get thin so we can save money on insurance” approach will prove engaging.  Find a delightfully easy-to-use, engaging approach that encourages competition, peer support and overall excellence
• Show you care.  The #1 predictor of employee engagement – which in turn is a top predictor of profitability – is the response this simple question:  "Does my employer/manager sincerely care about my well-being?"  Provide well-being programs that, in every element of their delivery, scream the message:  “We care about you and your well-being!  This will save you a fortune on replacing disgruntled and departing employees.  Your competition is at war for your best employees and prospective employees.  Do you have every weapon you need in order to do battle?
• Measure!  Go get your 5.8x (or 10x or 2x) ROI from delivering the standard wellness blueprint – assessments, screenings, engaging programs, incentives and reporting.  Demand workforce business intelligence about everything that ties to the performance, productivity, well-being and health of your people. After all, your people are the lifeblood of your business.  If someone can integrate all this information in one dashboard for you, how much would you pay for it?
• Get your money’s worth.  Maximize the value in related services you are already paying for (think EAP, training, health plan programs, state-sponsored smoking cessation programs, employee surveys, etc).  And don’t forget to automate and accelerate wellness activities (yoga classes, Weight Watchers, etc…) that you’re employees started and love.  Use data to make strategic decisions that avoid spending money on, say, diabetes if it could better be spent on depression, work-life balance or the sense of team people feel when they show up for work.  (Do you think your customers might notice this?)
• Do the right thing.  Type 2 diabetes is very nasty.  Heart attacks aren’t so great either.  Is there anything you can do to help people have healthier babies?  Employers of choice live their values, and provide meaning beyond a paycheck

Sustainable Awesomeness

OK – choose your own message for “high-performance company.”  But please don’t make it just about cost savings.  These are human beings you are dealing with.  Fire us up!

Then let’s make some money.

Economic Tarpits (and 5 Ways to Avoid Them)

Mammoths are grazing, sabre-tooth cats are hunting.  But the ground they walk on is warm and kinda sticky.  Who will escape the tarpits of the 2009 economy?  Here are factors that matter:

• Sector.  I like whatever is badly broken (healthcare, energy, education, healthcare again) or really numbing – I am talking beer, lottery tickets or anything released in the last ten years starring Nicolas Cage.
• Size.  Go small.  Why?  It means you can be profitable without laying off half your staff and eviscerating morale.  You don’t need $50 million from VCs to launch a great business.  Perhaps most importantly, medium-sized sales matter measurably to small companies.  Whale hunting is fun, but small companies get to live like the good Norwegians – on a steady diet of herring and berries, with a salmon every now and then.
• Pace of Iteration.  Fast.  The era of the one- to two-year planning horizon is over.  Products need to iterate quarterly, monthly, weekly.  Maybe even in an automated way hourly (see Amazon or Google).  Launch, learn, re-launch, re-learn, repeat.  Innovation = survival.
• IT involvement.  Little to none.  We like IT.  They’re smart, thoughtful, irreverent (prickly at times) and perform feats of massive ingenuity.  We just don’t want to talk to them when selling our services.  No one selling to business buyers does.  IT has to understand and raise issues of our enemy, complexity.  Modern, standards-based SaaS (and in our business, emerging standards from the likes of Microsoft and Google) keep IT at bay.
• Relationships.  Have them.  Nurture them.  Obsess over them.  When times are great, you might sell to strangers.  But when times are tough, the relationships you, your team and your brand already have matter more than anything else.

Better to be the bird flitting over the head of the sabre tooth cats than the cats themselves.

That’s my nickel.

Disease Management: Failure to Engage

Disease Management (DM) has a simple problem.  It doesn’t work very well.

The recent disease management demonstration projects for Medicare (widely reported in the New England Journal of Medicine) were uniformly disappointing – with low enrollment rates and low-to-no clinical impact.  I won’t oversimplify the complexity behind these data, nor will I throw the baby out with the bathwater – but I will propose some simple, high-level reasons why the ROI of DM is under fire.

• Bloated cost structures.  DM cost structures are rigid and built around highly trained people.  Great coaches, nurses and other experts cost real money – even if these roles are shipped overseas (another interesting trend).  Empowering – and yes, in some cases replacing – human experts with cutting-edge technologies is probably the only way to take big bites out of the cost of doing business
• Many “customers” have no interest in changing.  “Hey, you’re obese and pre-diabetic.  Call me, because your health plan and your company want to spend less on your healthcare.”  Not only do highly trained coaches hate it – it doesn’t work!  Every assessment, screening and improvement approach needs to find the costly people who actually care about changing.  Adapting from a claims-driven, “call them till they scream” approach to a more behaviorally-focused human approach is not only possible today – it can cut half the costs.  The industry needs positive, viral and social self-referral mechanisms – anything but toxic water-cooler chatter about how to avoid the health plan cops
• Singling people out sucks.  “Hey – I won the DM lottery!  My coach is calling me!”  People hate that first inbound call.  They avoid it.  They don’t call back.  Why?  Behavior change is hard enough when you ARE intrinsically motivated to volunteer – imagine how hard it is when you feel like you’re picked out of a police lineup.  Perhaps more importantly, ignoring the “other 90%” of a population leaves untapped the improvement potential in everyone who doesn’t fall in the “extreme cost” category.  This fundamentally negative approach (“managing disease” says it all, eh?) loses the potential for peer support, inefficiently allocates scarce dollars, and creates no population-wide business intelligence for employers
• Sidetracked by lobbying.  Yes – we know there are buckets of money about to start swirling around in this little phone booth.  But any good business succeeds with or without government intervention.  Focus on delighting customers and human beings first…
• Arrogance.  “You can’t build that in two months!  We’ve been working on this for 2 years – and ours will be better!”  We have heard this (in various forms) from big DM firms for years – and are still waiting.  We know from painful experience that in larger, established companies, systems evolve around ever-changing customer demands.  This introduces cumulative complexity and cost that serve as barriers to delivering cool s**t.  (Yes, we see the potential hypocrisy in a small company saying small is better, and then calling THEM arrogant – but we trust you will indulge the nerdy weaklings vs. the big boys just this once)

And yet, in spite of all of the obvious and solve-able industry PAIN, and high-octane population-wide engagement juice in our tanks – our advisors warn:

“Beware.  DM sometimes confuses their clinical expertise, health plan data connections, actuarial expertise, epidemiological/clinical frameworks and advanced coaching methodologies for compelling population-wide engagement systems.”

“And they’re not.”

For this reason, it’s an industry sitting on the launch pad, waiting for some bold and irreverent thinking to spark its massive engines.

Self-Tracking and Living By Numbers

The headline for this month's Wired Magazine is "Living By Numbers," and brings together some great articles about efforts by individuals and companies to measure and improve the things that matter to them. We're tremendously excited to see this gain attention, as these topics are very much a core of our approach to self-improvement.

Kevin Kelly and Gary Wolf of Wired have been organizing informal, periodic meetups called the Quantified Self in San Francisco and New York. A few weeks ago, I gave an impromptu demo and Q+A of Limeade at the San Francisco chapter of the Quantified Self meetup. The video of the session is a little long -- about 25 minutes or so -- but covers some interesting ground, including ways to drive engagement, incentives, privacy issues, and some of what we've learned since launch. Enjoy. -David

David Reeves on the Limeade employee wellness program from Kevin Kelly on Vimeo.

June Service Update: Better Recommendations, More Accountability, and an Identity of Your Choice

A little over a week ago, we released our monthly Limeade product update. We haven't been regularly posting release announcements to our blog, so we thought we'd take a few minutes to review some of our new features we've been working on over the past few months.

Get the best recommendations
Our recommendations are now more specific and useful than before.  We built them using the best of behavior change science, plus the thousands of goals created by the community over the past few months (which we can see anonymously).  To help you choose among them, the goal chooser on your Plan page presents you with all the goals related to what you'd like to improve.

Hold yourself accountable
Sometimes, it's easier to achieve goals by breaking them down into daily or weekly chunks.  Like:

• Bike 20 miles this week
• Go for a walk three times for 20 minutes each
• Drink no more than two sodas a day, or…
• Tell someone what you're grateful for every day
  

It's all possible with the addition of Weekly Goals, which you can set for all Numeric and Yes/No goals.

An identity of your choice
We've been blown away by the number of challenges, forum posts and activity from anonymous participants in our service.  [See ‘link to engagement blog’].  But as many of you tell us -- you want to create your own name and identity on the site.  In fact, the ability to change your Sign In name was the most-requested feature on the site.

Faster incentive points you can count
Incentive points should be updating about as fast as you can snap now, and you can see the details of your incentive points history by clicking on the points total on your Home page.

What's next?
This service is first and foremost for you.  We're planning lots of exciting improvements to our service.  We'd love to hear what you'd like to see -- tell us!

Bizarro Health Risk Thinking

Imagine you run admissions for a top academic institution like, say, Northwestern University’s Kellogg School of Management.

(Coincidentally, my 10th reunion there was this month) ;-)

You are shooting the breeze with the Admissions Committee:

• “We want students who take chances, who will be self-confident leaders (and big donors!)”
• “Personally driven, but who thrive in team settings.”
• “Open to new ways of thinking and growing in an ever-smaller and more connected world.”
• “We need right and left brainers – all in the same person.  Analytics are important, but we don’t need robots.  We need some creativity.  Some flow.”
• “People have to meet our basic criteria, but we need to find high-performance people who will keep us at the forefront.”

OK, dialog was never my specialty.  Forgive me.  But the sentiment seems realistic enough.  OK, now imagine a discussion like this:

• “Let’s measure what’s wrong with our applicants.  Then let’s let in folks with the fewest negative marks.”
• “Positive energy and self-leadership seem a little fluffy to me.  Does the GMAT measure those?”
• “Let’s put big red ‘X’s by their shortcomings – that should motivate them to focus on sanding down their rough spots.”

Inspirational.

This Bizarro-Admissions meeting is, in many ways, like the Health-Risk focused approach many vendors and employers take to health and productivity management (AKA wellness).  It works great if you want to single out the weak and costly.  But it is not the way to create high-performance workforces.

Identifying health risks and costs is a business reality we all need to face.  Avoiding cost is common sense, and with today’s screening, assessment, coaching and disease/care management innovations, represents a clear path to a very defensible ROI.  But it also can be fundamentally negative and uninspiring “insurance-thinking” that misses all the upside potential for people and profits.  It alienates people.  And perhaps most importantly, it’s also just not the way CEOs think – which makes it harder to sell, despite the ROI.

Leadership, openness to change, positive relationships and sense of team – these separate the best schools – and companies – from imitators.  They are the meat; health risks are, respectfully, just the buns.

Of course the admissions analogy is imperfect, because no company would ever admit to employing people or not based on health factors (unless they love alienating pretty much everyone and inviting federal prosecution).  But schools and employers want to improve the things that matter most about the workplaces they care most about.

Work factors, personal factors and healthy habits all matter, and they are hard to separate.  Just ask yourself.  What would Superman do?

 

Musings:

With the NBA Playoffs here, I chuckle to think of Lakers owner Dr. Jerry Buss assessing a player.  “This guy has very few risks.  His resume is well-balanced.  He’s no Kobe, but he may well help us eke into the first round of the playoffs.”

I always preferred Solomon Grundy (click the link!) to Bizarro.

Why PINK Donuts?

Today we launched our Donut-Back Guarantee.  Why?

On the plane back from Chicago, I finished 'A Whole New Mind' by Daniel Pink.  It's one of those bestseller biz books you read for a mental sugar rush.  But this offered me a bit more sustenance because it is, as I described it to a friend, "very Limeade."

It's about the limits of reductive and deductive thought, and about the benefits of holistic or "whole mind" thinking.  It's about the innovation, health and motivation that ensue when left and right lobes are firing together.  It is about the plasticity of our minds and our lives.

It covers mindfulness, altruism, flow, self-efficacy and meaning in life -- and how (whether you see them as touchy feely or not) they unlock our potential at work, at home and in living a healthy and happy life.  It is about how playfulness, design, and a sense of story will catalyze the next explosions of productivity and profit in business.

I was excited and lost in thought.  In a flash of inspiration, fueled by the memory of 901 Simpsons episodes, 753 sales meetings, 93 articles about Type 2 Diabetes, and a diet Jones Cola, it came to me.

It came to me like Mr. McGuire's speech to the Graduate in the film of the same name:

"Just one word."

"Yes sir."

"Are you listening?"

"Yes I am."

"Donuts."

Today, it's not about plastics.  It's about donuts; and on our home page we picked a donut color that honors both right- and left-brain gurus, Homer Simpson and Daniel (you guessed it) Pink.

94% Assessment Completion. 92% Engagement. (In 4 weeks!) Oh, and 5x ROI...

Two recent client deployments surprised us.

First, some background:  our service combines a “high-performance person” assessment with self-improvement tools, programs and services.  The path to “high-performance” requires engaging people in the things that make them happier, healthier (and yes, cheaper to insure) and more productive.  It seems simple, right?

Turns out, it’s not.  But in our last two deployments, we have achieved 94% and 91% assessment completion in the first 4 weeks of deployment!  For comparison, check to see what you got from your Health Plan’s Health Risk Assessment last year.  10 percent?  20?  Maybe 25?

More importantly, we have achieved even higher numbers (92% and 96%) for the ongoing use of our behavior change tools.  (At least 4 weeks’ worth, anyway).  These include things like:

• Challenging a co-worker to a goal
• Tracking goals (of your choosing)
• Participating in community forums
• Completing a blood screening
• Working with a health or condition-management coach
• Walking for charity

Employees earn points for any or all of these, depending on how we set up your company’s incentive program.  Points buy anything from that ego-snack feeling you get when you hit the high-score on Ms. Pac-Man (mine is 343,290, posted in 1991), to cash, to reimbursements for wellness expenses like bikes or gym memberships, to up to 20% off your insurance premiums.  (The latter is what we do at Limeade, and for me, this equates to $171 per month in my pocket.  For the average US employee, a 20% premium is $160 per month).  And no, I’m not counting Limeade as one of the two companies – unlike us, these employers each have hundreds of employees.

The 5x ROI, you ask?  We will dig deeper into the truths and fallacies of long-term Return on Investment soon.  But in a strictly tactical, short-term sense, the 6% of people not earning their incentives will pay for the cost of the Limeade service 5 times over.  It’s like saying:  if you want free healthcare, let’s engage in some wellness.  If not, it’s a free country.  And your healthcare will still be 80% free.  It shows how wellness can facilitate the introduction of a cost-saving plan design.

But it’s not all about incentives.  We attribute this remarkable engagement to a different way of thinking.  We have a more scientific view – but the unscientific one is a little simpler to digest.  It’s something like this:

In other words, attention to the details that matter can add up to some exceptionally positive outcomes.  With this general approach, we are starting to find the right incentive structures, viral features and communication strategies to maximize engagement with different employers of all stripes.

One client, a mid-size employer in the hospitality industry, recently launched their Limeade service with a “health premium discount” incentive.  Within a month, 96% were setting and tracking goals, challenging their peers, and participating in goal-directed community forums online.

And here’s the cool part:  The employees are hosts, servers, cooks and dishwashers, with a sprinkling of management.  For the most part, they don’t have computers at work.  That means they aren’t sitting in cube farms gazing at computer screens all day.  (Sounds nice).  They have about 20 locations in 5 states.  We hear this all the time in our sales meetings:  “It may work for high-tech companies, but not for warehouse workers.”  It’s simply not true.

An employee’s take (spell-checked but otherwise unedited):

The restaurant business is a crazy business for anyone, whether you have family or not.  But again I view things differently in that I came to them for a job, they hired me and I have agreed to the terms by continuing to stay on…

If I truly disagree with something then I run it through my chain of command with why and with solutions.

As far as the Limeade, at first I was a bit put off too but since following through with it, I personally have found it as a great motivation to care for myself.  Since we started it I have been eating better and exercising more regularly.  Granted money always plays a role in any company making any changes but looking at this in a positive manner, this makes you pay attention to your health & learning to take better care of yourself.  I don't take that as a company that doesn't care but exactly the opposite.

The points that we have to build are only 125 by September, that doesn't seem very demanding to me, plus these chats give me the opportunity to see different viewpoints and this helps me to see what changes I can make for myself and our team.

Another client, a white- and blue-collar electrical contracting firm, chose a wellness reimbursement, with pre-set quarterly promotions.  Their strategy isn’t about singling out the costly-to-ensure – it is about building a culture of performance.  And even though incentives won’t affect their insurance costs at all in the short term –they achieved 91% assessment completion and 92% post-assessment engagement in 4 weeks.

And 91% completed a blood screening as well.

I guess the point is this.  Don’t mail it in with an “if we build it, they will come” approach.  Don’t think getting the most eager 15% to complete a once-a-year survey makes a dent.  Launch a program that ties the outcomes you care about to your values and actions.  Simply practice what you preach, and you’ll profit.

Whole-Person Approach 10x Better at Predicting Productivity

Companies keep rolling out these Health Risk Assessments (HRA), thinking that they really help predict productivity.  Well, they kinda sorta do.  A little bit.

But as it turns out, there are much, MUCH better predictors out there.  In fact, the health risk factors from our study barely crack the Top 10 predictors of productivity.

What does?  Things like job satisfaction, belief in your company, meaningful work, the ability to manage depression (OK, that counts as a health risk) – even “openness & optimism” – trump more “conventional wisdom” wellness measures like heart health and nutrition.

The Limeade well-being assessment covers work, personal and health factors, and predicts productivity more than ten times better than health risk factors alone, per our recent study of over 9,000 participants.  There is quite a bit of fancy math behind this, which we will find a way to publish soon.

Taking a whole-person, whole-population approach to measuring productivity and other predictors of workforce performance (vs. a “mail-it-in again this year” HRA-based wellness portal approach) helps companies build more effective action plans, and better long-term business results.

“Are you ignoring health costs?  And isn’t that dangerous in today’s economy?” Good questions, savvy exec.  That’s another cool part of this research – this approach also predicts more about (self-reported) health and well-being than a risk-only approach.  Limeade measures health risks as a subset of the many factors that make up the whole human enchilada.

Perhaps the coolest part of all this is that people engage more with technologies and systems that treat them like people – not just BMI and Glucose Level and LDL Cholesterol.  And when they do, their companies profit.

10 Ways to Slash Benefit Costs Now

 

1.  If it Works, Copy It

There is a simple, proven 2-part benefits design structure that is saving companies 10% to 20% today. Combine a high-deductible, consumer-directed health plan with a wellness program that drives participation with incentives. Engage the chronically ill in care management programs, again using incentives. Why? It works. The best companies do it already, and employees appreciate it more. Ask your broker. (Or us).

2.  Demand Information Now

Can you imagine not demanding the latest forecasts from sales? Demand information from your people that you need to drive company performance (employee health, well-being, energy level, work-life alignment, and more). Know ALL your numbers. Insist that your vendors share actionable information with you. What's your alternative? Without knowledge, you handcuff strategy creation. You get scattershot execution. And you do employees no favors by choosing ignorance or uninformed "don't make waves" attitudes. They're not as healthy. They perform worse. They pay more for insurance, too. And even scarier, they go undiagnosed.

3.  Make Everyone Accountable for Healthcare Dollars – and Reward the Right Behaviors

You are a leader. You get to design the processes that shape the success of your company in all areas, even in the ignored and maligned backwaters of benefits. Assess the strategic drivers of employee performance, and then help people improve them. Start with consumer-directed benefit plans and clear incentives for healthy behaviors (and care engagement for the chronically ill) to send the right message. Communicate clearly, consistently and candidly 'Why?' and everyone will get it. Psst… People spend their own money differently than they spend your money. Even in a Health Reimbursement Account (HRA) – employees act frugally to reduce next year's out of pocket expenses. Give a clear path to employees: Participate and benefit personally, socially and financially. Tell your broker or consultant your vision and they can put the details together. Resist the temptation to be timid.

4.  Walk the Walk

Your CEO, CFO and HR leaders must embody the prevention and productivity-focused strategy. Walk the walk, then talk the talk. Get your assessments and screenings done first. Show up every day energized for work. Take the stairs. Banish heart disease-, diabetes- and cancer-producing diets from the cafeteria. Establish a smoke-free campus, and pay for smoking cessation programs (they work). Get your preventive care done and let others know you did. Evangelize how your career was built on sustainably high emotional and physical energy. Share your personal improvement plans. Challenge people to outdo you (and many will).

5.  Share the Dollar Value of Your Benefits with Every Employee.

If you are like an average US company, health insurance costs about $8,000 per employee per year. When people see what health services cost, they opt for lower cost options. Cost transparency alone can save 20% on health costs. It's their money – coming from their paychecks. Help employees and their dependents understand your commitment to making care affordable. Share your data in absolute terms, not "versus what you got last year." Now that's a retention driver.

6.  Show You Care

"I believe my company sincerely cares about my well-being." Your employees' answer to this question is the #1 predictor of their engagement at work. And engagement unequivocally predicts profits. Put something out there every year, every month and every day that says, "I am actively investing in your well-being."

7.  Never Double Insure

This is a simple, tactical way to get huge cost savings. Create and enforce clear policies that disallow double coverage for all new and existing hires with coverage elsewhere (e.g. through a spouse's company). You recycle cans and paper. You turn off the lights at night. Make it clear that wasting $8,000 a year on health insurance is not only financially irresponsible but morally wrong. Waste has no place in your company.

8.  Cut Fat

Encourage employees to think improving behaviors before they turn to drugs, and get aggressive about purchasing generics. All common conditions can be well managed on generics these days – and they're as cheap as 9 bucks for 90 days. In some plans they're free. Make sure employees see the savings. Next, promote low cost health screenings, onsite clinics and retail settings with posted prices. Your broker or consultant should do everything under the sun to get you the best network. Last, make sure your deductible is not too low versus what your business competitors offer.

9.  Build a Culture of Performance

There are a lot of myths about performance, the most insidious of which is that you can't measure it. You can. Measure all the key drivers of personal and organizational performance. Study the numbers for your workforce. Understand how health, productivity, well-being and financial performance interconnect. Then build value-priced strategies to improve in the right areas. Don't forget to evangelize and model the behaviors you expect from everyone. Use challenges, peer support and communications that reinforce both personal and corporate performance.

10.  Do it Now