Joseph Cabral, senior vice president, human resources, NS-LIJ
Lasting change starts from within. That’s the philosophy of North Shore-LIJ Health System (NS-LIJ) as it transforms its approach to employee health care. Through benefit plan redesign, data analytics and new wellness programs, NS-LIJ is improving the health of its 46,000 employees while controlling benefit costs.
Numbers help tell the story. Since NS-LIJ introduced innovative wellness programs and a new structure for employee health benefits, increases in the system’s cost for employee health claims have been significantly below the market average: 2.2% versus an 8.2% market average in 2011, and 2.2% versus a 5.2% market average in 2012. Even more important, workforce health has improved: Data show a meaningful drop in chronic conditions among employees, and employee participation in wellness activities has surged.
The focus on employee health is an outgrowth of NS-LIJ’s mission. “Improving the health of the communities we serve is what our work is all about,” said Joseph Cabral, NS-LIJ senior vice president of human resources. “We also try hard to ensure that our employees have the best possible health care, without breaking the bank.”
Launching a Transformation
A review of the system’s health offerings by NS-LIJ leaders found significant room for improvement. “Employee health was deteriorating, and that was negatively affecting staffing and productivity,” said Joseph Molloy, vice president for total rewards at NS-LIJ throughout the project. “We offered very rich health benefits, but our employees weren’t aware of their full value. Just as troubling, neither of our two health benefit plans included incentives to either use NS-LIJ providers, or become or remain healthy.”
NS-LIJ enlisted Towers Watson to help the system transform its employee health program. Together, the team set out to build a health and wellness approach that would include:
- Incentives for employees to use NS-LIJ providers and facilities
- Mechanisms for the detection and treatment of pre-chronic conditions
- Very limited or no cost sharing with employees that use NS-LIJ providers
- Inducements for employees to participate in wellness activities
- Flexibility for modifications in response to changing employee needs and medical advancements
The Towers Watson team presented NS-LIJ leaders with several plan design and program alternatives, and projected the financial impact of each option on both the system and employees. The plans reflected NS-LIJ’s unique culture and took into consideration Towers Watson’s assessment of health benefits offerings at other hospital systems, including NS-LIJ’s regional competitors.
NS-LIJ decided to offer two new health plans: the Value Plan and the Buy-Up Plan. Coverage and employee contributions vary between the two, but both steer participants to NS-LIJ services by providing full coverage with only small copays when employees use any of NS-LIJ’s 16 hospitals or its 7,000 physicians, imaging centers and labs. Employees’ out-of-pocket expenses grow significantly if they use providers outside of the NS-LIJ system, as their deductibles increase and the percentage covered by the system declines.
Wellness Programs Promote Health
The transformation included more than just plan design. A new wellness program not only helps employees take charge of and improve their health, but also provides members of the Value Plan with a powerful incentive to engage in wellness activities. Value Plan members who make and keep three wellness-related commitments each year eliminate their monthly health care premiums.
Joseph Molloy, vice president, managed care benefits/direct contracting,
NS-LIJ, (right) with Towers Watson account director Mark Murray
Communicating effectively with employees was integral to the plan’s success. NS-LIJ’s communication initiative included:
- An internal blog that encouraged employees to ask questions
- An internal magazine called Transforming Your Care
- Training for call center representatives
- Collaboration with HR partners throughout the system
By all accounts, the new approach has made a significant difference for the workforce and the organization. NS-LIJ has seen:
- Fewer plan members with chronic conditions
- Improved adherence to medication regimens among plan members with diabetes, hypertension and depression
- Nearly universal employee participation in wellness activities, with 85% taking advantage of incentives for tobacco abstinence, flu shots, health assessments and identifying a primary care physician
- A slowing of health care cost increases, with the trend now significantly below market
- 70% enrollment in the Value Plan — a percentage that exceeds the team’s initial goal
- A higher NS-LIJ hospital utilization rate for employees — increasing from 68% in 2009 to 78% in 2012
Best of all, employees are happy with the new benefits. “Most people love the plans’ structure and transparency. And they understand what they can do to influence their health and their costs,” Molloy said. “They also appreciate that we did all of this without shifting costs to them.”
Gregg Nevola, vice president, total rewards, NS-LIJ, (left) with senior Towers Watson consultant Stacey Thaler and Towers Watson actuary Tommy Yu
NS-LIJ isn’t stopping there. The transformation has gone so well that today Molloy has a new role: vice president, managed care benefits/direct contracting. In partnership with area employers, he forges provider agreements that allow organizations to designate NS-LIJ facilities as their own in-system providers. NS-LIJ is also providing wellness programs to outside organizations. “The model we developed with Towers Watson’s guidance has been so successful that we want to help other businesses take a similar approach,” Molloy said.
NS-LIJ leaders share suggestions for other organizations looking to strengthen employees’ engagement in their personal health and wellness:
- Stay focused. Whenever you undertake an employee health initiative, there will be challenges. If you’re really committed to engaging employees in their health, just stay on target and keep moving forward.
- Build consensus. NS-LIJ involved 18 leaders in the planning, including the executive directors of most of the system’s hospitals. The consensus building proved essential to a smooth rollout because the message that the changes were in employees’ best interest was consistent and came from the top.
- Speak plainly. Don’t lapse into “benefit speak” and assume that employees will readily understand terms like “in-system,” “in-network” and “plan deductibles.” Health care literacy starts with the basics.
- Focus on the positive. Most employees assume that any change will be for the worse. Stress that the change is about improving employees’ health and reducing the risks of chronic illness.
- Adapt and grow. Periodically tweak processes and offerings to meet employees’ changing needs. Review plan offerings at least annually.