Mind the gap: aligning employer health goals and employee health needs

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Apr 28, 2022

Almost half of the people in the United States have health insurance through an employer. What began as an incentive to attract workers during World War II is now an influential aspect of employee hiring and retention. Health insurance typically covers a range of medical expenses. However, given that only 10-20% of health status is attributed to medical care, the primary focus on medical expense coverage as “health care coverage” is not sufficient to better the health of employees and their families. 

Keeping in mind their goals to improve employee health status and decrease health care costs, many employers implement wellness programs. Before COVID, over half of small businesses and more than 80% of large businesses offered such programs. These benefits range from workplace fitness programs and challenges, such as walking contests between employees, to bringing in healthy foods for lunch, to offering access to health assistance programs such as smoking cessation. 

More and more, studies find that wellness programs do not help make employees healthy, nor do they lower costs for employers. This is because, overwhelmingly, participants in workplace wellness initiatives are already invested in their health and tend to be living a healthier lifestyle than their more at-risk coworkers. Additionally, these programs frequently shift costs onto employees who do not participate, which concerningly tend to be individuals and families who are more at-risk of incurring higher health costs and tend to have a lower socioeconomic status. In short, corporate wellness programs seem to be doing little to address employers’ goals around lowering health care costs and improving employee health.  

If wellness programs don’t lead to desired results, what can employers do to achieve their goals? They can address drivers of health. Drivers of health (DOH) encompass the social, environmental, and economic systems that influence how people live, work, play, pray, and age, including the circumstances in a person’s life that affect their health and quality of life status. Further, research shows that DOH play a role in how employees interact with medical services, if they interact at all. If employers want to help make their employees healthier, research suggests that addressing drivers of health through employee benefits is a better solution for addressing employers’ goals than providing a benefit that only a small percentage of employees use.

Based on existing research, two key components are required to implement a drivers of health program for businesses: robust data and partnerships with community-based organizations. Demographic data—gender, race, ethnicity, age, salary level, and more—when overlaid with health care data enables employers to gain insights into specific risk factors impacting their employees. Developing relationships with community-based organizations then allows employers to offer initiatives that help employees gain the support and assistance they need to address their specific DOH-related needs. 

Putting these insights into practice, a few examples are as follows: 

  • Several companies, such as CitiBank and Fidelity Investments, offer varying degrees of childcare for employees with young children, mitigating the stress caused by lack of reliable childcare and giving parents a greater opportunity to excel at work. 
  • Meal kit company Freshly launched Freshly for Business in 2020, allowing employers to ensure their employees received healthy meals while isolated during the first COVID spike. 
  • Many other companies, such as New York Life, offer employees student loan assistance, to help alleviate both the physical and mental toll student debt takes on employees, such as increased stress levels and higher blood pressure.

These benefits address underlying issues that impact an individual’s health outcomes and can provide an improvement in the employee’s health and quality of life.  

Medical care is only responsible for up to 20% of health outcomes. To better address employee health, while making sure costs are allocated wisely, employers should turn their attention to the drivers of health. In offering benefits that address the drivers that directly impact health outcomes, employers could take a significant step in both lowering their health care costs, and helping their employees’ health.

Jessica is a research associate at the Clayton Christensen Institute for Disruptive Innovation, where she focuses on business model innovation in healthcare, including new approaches to population health management and person-centered care delivery.