Case Study: Wellness focus pays off

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By Sharon Stocker | 31 March 2014

The challenge

Our client in the retail industry was battling the rising cost of medical benefits. Strategies they were already employing to address these challenges included:

  • Increasing employee cost share
  • Adjusting plan design (raising deductibles, copays, and coinsurance)
  • Introducing a high deductible health plan, often with a health savings account or health reimbursement account.

Despite taking all of these steps, healthcare costs continued to soar. By 2011, expenditures under the self-insured medical program had reached untenable proportions. Millions were outflowing annually for lifestyle-related conditions like back and neck pain, hypertension, high cholesterol, and depression (not to mention the price of proliferating leaves of absence, where depression was the leading cause).

With no changes to medical benefits, costs were projected to go up another 12.8% in 2012, reflecting a year-over-year gross cost increase of $1.4 million. These numbers were not sustainable and called for radical action.

The solution

Our client introduced a modest wellness initiative in 2010 that had quickly gained traction with employees: 61% reaped a reduction of $1,040 on 2011 annual premiums for full participation. In 2012, the company took a bold leap, upping the ante with a radical plan design. Their primary objective was to create a culture of health and responsibility. To achieve this, they decided to link responsibility and rewards in a very direct and dramatic way. First, they defined two wellness steps that focused on awareness of individual health: (1) Getting an annual check-up with a primary care doctor and (2) taking a health risk assessment.

Next, they linked the steps to major incentives to drive the desired behavior change. For employees who took:

  • Both wellness steps—medical premiums for the following year would stay flat (reflecting a 70% employer subsidy of the total cost); after several years of increased premiums, this was a particularly welcome message for employees.
  • One step—the employee portion of premiums would jump to 70% (30% employer subsidy).
  • No steps—the employee would be responsible for the entire cost of premiums (0% employer subsidy).

With this design, the employer was sending a loud and clear message: It pays to step up to wellness!

Communication as campaign cornerstone

With the stakes for participation set so high, Milliman helped the client develop a comprehensive communication strategy that was paramount to the program’s success. Employees needed to:

  • Learn why wellness and the steps would benefit them as well as the company.
  • Understand details about the steps, how to meet them, when to meet them, and the ramifications of not taking the steps.
  • Engage in the new program with excitement and enthusiasm, rather than feel it was punishing or onerous.

The client’s goal was 100% participation in both wellness steps; our goal was to help them reach it.

Elements of success

We started with an initial strategy meeting to discuss and define wellness in the broader context of corporate values and culture. Wellness programs are more successful when holistic and woven into the company fabric. Using the Six Dimensions of Wellness Model ©1976 by Bill Hettler, MD © National Wellness Institute, Inc. as an entry point, we helped the client form their own definition of wellness, creating a version of the wellness wheel that supported their broader benefits and wellness platform.

We then created a strong brand and tagline (Step Up to Wellness!) and powerful graphic identity that would resonate with employees and embody the campaign.

Employees had until March 31, 2012, to complete the steps and qualify for the incentives. We introduced the program during Fall 2011 open enrollment. Although these retail employees would have little time to fulfill the wellness steps during the holidays—their busiest work season—this would set the stage and start to prepare them for the new requirements.

The campaign kicked into high gear in January, with multiple elements focusing on education and empowerment. To reach employees in the field as well as those at the corporate offices, we used a variety of media—print, web, and email—keeping messages simple, clear, and consistent. Specific elements included:

  • A 4-page color brochure explaining the new steps and how they linked to premiums, why wellness is important and how it tied in with company values, required actions, and deadlines. (The brochure was mailed home to involve family members; if covered under the company’s medical program, they also were required to take some steps.)
  • Three follow-up reminder postcards mailed home at strategic intervals.
  • Weekly emails with relevant details and reminders.
  • Posters dotting hallways, elevators, and break rooms.
  • A personalized web page to check which steps were completed and which still needed to be done by what dates.

The cumulative effect was direct, clear, and powerful.


The client fell just shy of their 100% participation goal in both wellness steps in 2012 (99%)—then achieved it in 2013.

The high participation rate has led to a host of positive medical outcomes with significant impact on the bottom line, including:

  • The overall healthcare cost increase fell to 5% in 2013, substantially below historical increases of 10%-18%.
  • Emergency room visits decreased by 4%, signaling stronger relationships with primary care doctors and more appropriate use of urgent care.
  • The cost of back surgeries dropped by 40%.
  • Early detection of cancers went up, due to the increase in preventive visits and screenings and allowing for treatment at earlier stages.
  • Mail-order vs. retail prescription drug orders rose considerably.

Another significant measure of success—employee response—has also been overwhelmingly positive. Numerous personal stories (such as the spouse whose prostate cancer diagnosis was caught in time to be treatable) have contributed to a stronger culture of appreciation and empowerment.

The client attributes the wellness program’s success to efficient plan design and effective communications. They remain firmly committed to continuing to enhance and measure results of the wellness program.