Employees who are happy at work not only perform better, but also cost less. That's the conclusion of a six-year study conducted by health insurance company Humana and the University of Michigan's Ross School of Business. The insurer studied not only its 42,000 employees, but also their impact on patients at its more than 320 medical centers and 270 worksite medical facilities. The results of that research informed the design of the Humana Integrated Total Wellbeing platform, a new product that the company is currently rolling out to employers.
It's good timing for such a product, as businesses are becoming more interested in employee wellbeing as a way to boost everything from retention rates to productivity. Perhaps more importantly, the US Affordable Care Act is putting a major focus on prevention, a first for the US healthcare system. In most cases, it will become costlier for employers to provide employees with health services and access to healthcare – which means that there will be financial incentives for them to keep their employees happy.
For Humana, the economic value of employee happiness starts with a simple equation: happy nurses keep patients healthier. In a study of its 33 nursing teams, the company found that patients working with its happiest (or in Humana parlance "most engaged") nurses have 40% less paid in claims, 70% fewer visits to the ER, and 91% fewer visits to urgent care clinics. In turn, Humana pays 24% less per patient.
But the impact of employee happiness isn't limited to Humana's nursing staff; the company credits its "engagement strategy" with improving everything from sales to internal talent retention. It has deployed its proprietary Wellbeing Index, which assesses wellbeing at an organizational level, across all departments, even those with no service component. In the process, it has gained numerous useful insights, including the realization that the degree to which employees feel that their work has purpose accounts for almost half of their productivity.
Internal policies become external products
Tim State, vice president of human capital strategy and performance at Humana, points out that, like any large company, the insurer is interested in the health, wellbeing and productivity as its workers. "But especially as a company with our mission, it goes one step further,” he says. “As a health and wellbeing company, we wanted to build the capability to give to our customers what we aspire to for ourselves. We can incubate and nurture a lot of ideas and approaches inside our own population and take those learnings out to consumers."
Humana's Integrated Total Well-being platform is a good example of how the company's predictive research can have an impact on healthcare costs. Using an employee happiness survey developed by the University of Michigan, Humana is able to predict health metrics like blood pressure and cholesterol levels with 99% accuracy. In so doing, it can reduce the frequency of employee physicals, which cost an average of $150 per employee. For a company of 50,000 employees, that adds up to meaningful savings.
According to Kim Cameron, the University of Michigan researcher who developed the survey, an increase of one point on the survey equates to a savings of $2,552 in medical costs per year per employee. With those kinds of savings, even a company with 100 employees might find such a strategy worth deploying.
Encouraging healthy employee choices
Humana's not the only company making the connection between health and happiness. Whole Foods Market, for example, recently launched a B2B company wellness program called Full Spoon, which helps employees in participating companies develop practical, sustainable habits through educational seminars, easy online and mobile tracking, and healthy eating incentives like employee contests and discounts on healthy foods.
Employees at companies that participate in the program get a virtual discount card that they can use at Whole Foods Market. They can also enroll in various contests, and are given access to the Count It platform, which tracks diet and exercise. Each month, participants earn points for being physically active and shopping for and eating healthy foods. By “swiping” their virtual discount cards when buying groceries, participants earn points, along with a 20% discount on groceries marked as "healthy" by the Full Spoon program.
Full Spoon is only being offered through Whole Foods' San Francisco and Reno stores today, but the company has plans to expand to other stores slowly throughout the year.
"That incentive has really worked to shift the composition of people's baskets, and that's a metric we can show the companies we work with," explains Caesare Assad, Full Spoon program director. Assad and Full Spoon program designer Sarah Ahern were Whole Foods team members when they came up with the idea for Full Spoon.
"We looked at the wellness industry and saw huge demand and not a lot of engagement with existing programs,” Assad says. “[Ahern and I] had personal experiences with the positive health impact of real food and saw this as place where we could really make a difference, so we put our heads together, came up with a plan and pitched the idea to Whole Foods."
The metrics of wellbeing
With the support of Whole Foods behind them, the two began working with social network LinkedIn and electric car company Tesla Motors to test their program and figure out what worked best, both in terms of health results and employee engagement. So far, they have an engagement rate of 27%-38%, which Assad claims is well above the industry average.
"When we started out, we had this vision of on-site education, and we wanted to do hands-on cooking and have folks come to 30- to 45-minute classes, do lunch, and learn," Ahern says. "But in working with Tesla and LinkedIn, we saw that really we needed to give sound bytes and tidbits in 5-minute, 10-minute, and 15-minute chunks. That got us to re-work our thinking and develop programs that could be impactful and engaging in a short amount of time."
Assad adds that employees at both companies were very interested in connecting with farmers, so Full Spoon built out a network of farmers they could incorporate into the program as well. "Now we're connecting farmers directly with people, which both sides love," she says. "We've really seen it build into this ecosystem around healthy eating, which we hadn't anticipated happening."
Ultimately, employers that really want to get serious about employee wellbeing will need to avail themselves of multiple tools and take a top-down approach.
"Anything you measure and focus people on tends to get better when complemented by a leader example," John Schriber, director of associate engagement at Humana, says. "We are lucky to have a CEO who firmly believes in this and is really walking the talk. I can't tell you how much the culture has changed since starting to focus on wellbeing."
Amy Westervelt is an Oakland, California-based freelance reporter who covers the environment, business and health
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