Spending time and energy on wellness is generally cast as a long term strategy with long term results. But not every group has long term health issues.  And most groups would be better served by focusing on shorter term problems.  
How can that be? Isn’t everyone a potential long term health problem in the making? Indeed, every person gets older every year, but a group of employees does not age in the same way. A group of employees could stay the same average age or even get younger. It all depends upon the company’s turnover. A better measure than turnover is the employees’ average tenure.  
For example, imagine Company A has a workforce with an average tenure of five years and an average age of 38. For Company A, heart disease likely is not a priority issue.; childbirth and after-work accidents are more likely to be the cost drivers. Complications from chronic disease, such as diabetes or asthma, also are not likely to be significant as such a population hasn’t been alive long enough to develop those problems.  
Granted, heart disease and chronic disease complications may become important in the future.  Yet, keep in mind: Company A is paying for the events that happen during the five years that the employee is enrolled. If it wants to make a dent in costs, working on long-term issues will not do anything.  
Having a short-term focus does not mean ignoring long-term problems. However, it does mean that employers can attack the problems that are plaguing them today and eating this quarter’s profits. Rather than being the poor stepchild of “real” wellness, short-term tactics could be seen as savvy, effective and capable of delivering measurable results.  
Large insurers — who have a profit motive — tend to focus on long-term health problems, which might lead employers to believe that long-term health problems are where the money lies. But what is true for an insurer is not necessarily true for its clients. An insurer, especially if it dominates a market, will have a longer relationship with Company A’s employees than five years. An insurer that has 70% market share will have that employee for most of his working career, no matter what company he works for. Since the insurer has a different time horizon, its cost drivers do not match Company A’s.  
Employers, on the other hand, looking to make a meaningful difference in health costs need to look closely at their workforce, illness patterns and appropriate timeframes. While an insurance carrier may have similar goals in trying to reduce costs overall, its priorities and tactics are not designed to address a single employer’s current cost concerns. For that, company leaders need to take on the task themselves.  

Please welcome back guest blogger Linda K. Riddell as she addresses whether a short- or long-term approach to cost-containment is best for your organization. Read on and share your thoughts in the comments. —KMB

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Spending time and energy on wellness generally is cast as a long-term strategy with long-term results. But not every group has long term health issues. And most groups would be better served by focusing on short-term problems.  

How can that be? Isn’t everyone a potential long term health problem in the making? Indeed, every person gets older every year, but a group of employees does not age in the same way. A group of employees could stay the same average age or even get younger. It all depends upon the company’s turnover. A better measure than turnover is the employees’ average tenure.  

For example, imagine Company A has a workforce with an average tenure of five years and an average age of 38. For Company A, heart disease likely is not a priority issue.; childbirth and after-work accidents are more likely to be the cost drivers. Complications from chronic disease, such as diabetes or asthma, also are not likely to be significant as such a population hasn’t been alive long enough to develop those problems.  

Granted, heart disease and chronic disease complications may become important in the future.  Yet, keep in mind: Company A is paying for the events that happen during the five years that the employee is enrolled. If it wants to make a dent in costs, working on long-term issues will not do anything.  

Having a short-term focus does not mean ignoring long-term problems. However, it does mean that employers can attack the problems that are plaguing them today and eating this quarter’s profits. Rather than being the poor stepchild of “real” wellness, short-term tactics could be seen as savvy, effective and capable of delivering measurable results.  

Large insurers — who have a profit motive — tend to focus on long-term health problems, which might lead employers to believe that long-term health problems are where the money lies. But what is true for an insurer is not necessarily true for its clients. An insurer, especially if it dominates a market, will have a longer relationship with Company A’s employees than five years. An insurer that has 70% market share will have that employee for most of his working career, no matter what company he works for. Since the insurer has a different time horizon, its cost drivers do not match Company A’s.  

Employers, on the other hand, looking to make a meaningful difference in health costs need to look closely at their workforce, illness patterns and appropriate timeframes. While an insurance carrier may have similar goals in trying to reduce costs overall, its priorities and tactics are not designed to address a single employer’s current cost concerns. For that, company leaders need to take on the task themselves.  

 

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