There’s no question it’s in everyone’s best interest to have healthy, engaged employees. Employees who avoid illness see lower healthcare costs, while employers see lower absenteeism rates.

But there’s a problem with the quest for healthy workers: Over the last decade, employers have largely focused on wellness programs to help their employees get and stay healthy, rather than looking at chronic conditions. That’s resulted in mixed results for wellness programs. Sure, there are some success stories, but more often than not, employers are finding that their wellness programs don’t move the needle on rising healthcare costs.

Rather than focus attention — and dollars — on getting people well and having minimal impact, employers are beginning to zero in on helping employees manage chronic disease.

It’s a smart decision: About 86% of healthcare dollars are spent on chronic and mental health conditions, and 59% of Americans have at least one chronic health condition, according to the CDC. And there’s a lot of evidence that shows chronic disease management programs work. They can improve outcomes in people with diabetes, heart failure, COPD, high blood pressure, anxiety and depression.

But the way an employer runs a disease management program varies greatly depending on the funding mechanism. Self-funded employers are at an advantage because they can carefully review claims data to see how to track chronic conditions and measure ROI.

On the other hand, fully-insured employers have less access to data and likely would turn to their insurance carrier’s program, which is already embedded into the coverage. Here’s how it works: Carrier programs typically focus on employees with asthma, COPD, breast cancer, diabetes, heart disease, arthritis, depression, end-stage renal disease or women with high-risk pregnancies.

When a condition is diagnosed, the health insurance carrier works closely with the employee, providing tools and support to manage the illness. The carrier may provide access to counseling, nurse on-call resources and other high-touch services.

The goal is to help the employee:

1. Understand the condition and health risks
2. Understand the doctor’s instructions, test results and course of treatment
3. Stay motivated in the treatment
4. Maintain compliance with taking prescribed medication

Unfortunately, a carrier can’t provide detailed information to the employer, such as diagnoses or prognoses, about who is participating in any program. Employers are hard-pressed to gain any more than the percentage of employees participating in disease management programs.

If participation rates are low, employers can offer incentives; this is normally a cash award, a decrease in the required employee premium contribution, or reduced copays and deductibles. Some employers also use on-site coaching, which requires a commitment from the company to allow employees time away from work to participate. A few companies are even limiting plan design options based on participation in the program.

Other important components of a successful disease management program include:

1. Clearly communicating the benefits of the program often
2. Gaining support for the program from senior management
3. Creating a culture of health
4. Providing employees with the ability to participate in workplace health programs.

In addition to carrier programs, some larger employers with fully-insured plans may outsource certain disease management needs to further manage healthcare costs. For example, a company with a large population of younger workers may want to provide a more intensive maternity-focused program to prevent hospitalizations and other complications that would impact claims.

Although disease management programs do appear to improve quality of life, physical and mental health outcomes and lower hospitalizations, as well as long-term cost savings, have yet to be proven. One reason? Many fully insured employers are not fully credible. Therefore, even by reducing hospitalizations, which can save the plan money, employers are still relying on claims data from a carrier’s entire book of business.

Despite this obstacle, it’s worth noting that disease management has been proven to help employees get healthier, which could impact engagement and absenteeism. This is an important metric for fully insured employers that are considering whether to move to a self-insured model.

Employers struggling to contend with the rising cost of healthcare can turn to disease management to help employees get healthy — and create a better workplace.

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