Wellness. Well Crafted

Case Study Category: Organizational Design

Jurisdiction: City of Hickory, North Carolina

City Manager: Mick Berry

Please include consider our application for an Innovation Award

Project Leader

Mike Bennett, Administrative Services Director

Administrative Services Department

(828) 323-7471

mbennett@hickorync.gov

PO Box 398 Hickory, NC 28603

Presentation Team Members

Mike Bennett, Administrative Services Director

Claudia Main, Employee Relations Manager

Administrative Services Department, HR Division

(828) 323-7447

cmain@hickorync.gov

Warren Wood, Assistant City Manager

City Manager’s Office

(828) 323-7435

wwood@hickorync.gov

Matthew A. McQuide, RHU

VP/Senior Benefit Consultant

Benefit Controls Companies

(704) 366-1451

mattm@benefitcontrolsnc.com

Synopsis

The City of Hickory, North Carolina is a place for doers and makers seeking a well-rounded community, a bridge between Asheville and Charlotte at the foot of the Blue Ridge Mountains along I-40 where a collective spirit of craftsmanship strengthens any endeavor with detail, artistry and quality. Hickory. Life Well Crafted is our brand that our coworkers have taken to heart and applied in our organizational design, crafting an innovative and ever evolving health improvement incentive wellness program that has resulted in improved health and reduced costs that are easily measurable.

Intent of the program

The challenge local governments face in funding health insurance programs is never ending. Effective wellness programs require a fluidity of ongoing improvement, compliance and incentives that motivate employees to take control of their health with adequate resources. Inevitably, waiting to improve a wellness program when a bad year hits, is too late to make up for lost funds spent on higher cost from health claims already in motion.

In 2012 the City of Hickory instituted a health improvement incentive program with the intent to increase compliance and individual action of employees to improve specific aspects of their individual health. The City has focused on wellness heavily since 2005, experiencing measurable reductions in costs and improvements to the health of the workforce. In 2005, the City opened an onsite health clinic enabling employees to visit a nurse practitioner while on the clock and began conducting annual health risk assessments (HRA). The HRAs measure health risk factors including blood pressure, blood glucose, triglycerides, cholesterol and body mass index (BMI). Results were categorized into low, moderate or high risk categories. In 2006, employees were able to participate in a voluntary onsite diagnostic scan with a $20 copayment that identified a number of serious conditions that were remedied.

To further improve the program, in 2007, the City began requiring employees to visit the onsite nurse practitioner a certain amount of times per year based on HRA results in order to remain on the “Wellness” health plan, as opposed to being placed on a base plan with higher deductibles, copayments and coinsurance. A medication-dedication program was instituted that provided free prescriptions to employees with high risk factors for their high risk areas. From 2007 – 2010 a number of voluntary wellness competitions, trainings and programs were offered to City employees.

Building on the base of our program we had built upon since 2005, and learning not to wait for cost increases to improve the program, we instituted a nicotine surcharge program in 2011, charging a monthly nicotine premium to all employees who use nicotine products and randomly testing those not paying the premium. The base plan was lowered in 2011, for those non-compliant with required nurse practitioner visits. We also began preparing for a major phase to roll out in 2012 that would require employees to make a specified improvement to one of their high risk factors, as reported in their 2012 HRA results by their 2013 HRA. The program sets an annual 5 or 10 percent target decrease to each risk factor. If an employee has one or more high risk factors, he or she has one year to make the specified 5 or 10 percent improvement to the high risk factor of his or her choice. If the employee has zero high risk factors or makes the required improvement to at least one of his or her high risk factors they will maintain a $0 monthly premium for health insurance for the entire plan year. If they do not make the required improvement, they must pay a monthly premium. The program has motivated employees to take full advantage of their required visits with the nurse practitioner, free resources from BCBS, participation in City trainings, programs and wellness competitions and to put forth increased effort to improve their health. Risk factors are color-coded on all communications and monthly wellness calendars are posted with classes and programs each month that focus on each risk factor. Employees can easily identify all resources for the risk factor they are working on by the color coding scheme.

The improvements have been identified by medical professionals as realistic improvements for an average person to make in a given year. This avoids the possible scenario of penalizing an employee for improving, but not being able to make an unrealistic improvement that could be unhealthy in a given year. It also allows the program to be ever evolving, challenging the workforce for continuous improvement and rewards.

Costs/Savings

From 2007 – 2010 the City averaged a 3 percent annual decrease in health claim costs when trend was around 15 percent increases. Anticipating the rise in cost that inevitably comes without continued improvement to the program, we have been able to curb the high trend annual increases since 2010 with minor 3 – 5 percent increases in claim costs while maintaining our goal of no cost employee premiums and no reduction to our plan benefits since 2007. During this time we were able to create a health insurance reserve from nothing to the equivalent of a year’s total plan costs. We saved $750,000 in the FY 2011-2012 budget and were able to budget the same amount in FY 2012-2013 as the previous fiscal year. The total cost per employee for our health insurance plan decreased in 2010 to the level it was at in 2003. All savings have been after factoring in the added costs for our program.

Employees with multiple high risk factors have decreased each year. The program has resulted in a 16 percent reduction in all risk factors. Visits to the emergency room have dramatically decreased.

Innovative Characteristics/Improvements

The City of Hickory’s Health Improvement Incentive Program is based on compliance and rewarding improvement. Unlike the typical, progressive wellness program that penalizes an employee until they reach a specific, ideal measurement, employees are challenged to make realistic improvement targets within a given year in order to receive an incentive and avoid a penalty. In fact, an employee may make the target improvement and receive the incentive while remaining in a high risk health category. The key is healthy improvement equals reduced claims. The innovation is the rate at which employees improve when facing realistic goals they have the resources, motivation and knowledge to achieve. This concept in action has transformed our wellness program from one of monitoring health risk measurements to that of action focused on improving health risk factors.

Obstacles

Change can be difficult for employees to accept, particularly when they feel the organization is prying into their personal lives. Charging employees for nicotine use and/or having to pay more for health insurance than employees who make a target health improvement created mixed emotions among the workforce.

Attention to the details and communication of the program was also a particular challenge. Unifying the communication and procedures of all HR employees, management, nurses and our contracted consultants required relentless attention to detail for many months prior to the roll out of the program. With at least 20 percent of the workforce skeptical of the program, minor mistakes had major negative impacts. Some of the mistakes that created obstacles we had to overcome that we will share included nicotine testing performed incorrectly, results letters with minor mistakes and misinformation from our nurses to employees.

Applicable Results and Real Practicality

All organizations face the continued challenge of rising health costs, the desire to provide high level benefits and often the frustration of having no control over the costs. Cities and counties of all sizes will be able to learn from our experience specific ways they can take control of curbing rising health costs and improving the health of their employees. Having presented our program to the North Carolina City/County Managers Association we are prepared to share ways in which organizations of all sizes can implement similar programs of on site clinics, annual health assessments combined with our formula of the compliance-based health improvement incentive program.

Private Consultant

The City is self-insured with 650 full-time employees. Blue Cross Blue Shield administers our plan and we contract with Benefit Controls as a benefits consultant. Benefits Controls’ primary duty is to negotiate our costs with BCBS. Benefit Controls also assist in our development and progression of our wellness program by providing ideas, research and support. The City also contracts with Healthstat to provide our onsite clinic and nurse practitioner and annual health risk assessments.

Presentation Style

In order to assist attendees in understanding how the program works, each attendee will receive hypothetical results to an annual health risk assessment as if they were City of Hickory employees. Using Prezi to visualize the data, program design and process, attendees will be able to personalize and fully understand the tenets of our wellness program. This will enable our group to involve attendees in an activity designed to elicit innovative ideas for education, improvements to the program and adaptability to their organizations. Time will be devoted to cover the obstacles we dealt with and offer advice to avoid and/or overcome similar obstacles. Seeing that this is the Transforming Local Government Conference, additional props, prizes, entertaining real life stories and high energy presenters will be included.
Exhibits

Exhibit A: Health Risk Factor Results Letter

Exhibit A cont.: Health Risk Factor Results Letter

Exhibit A cont.: Health Risk Factor Results Letter

Exhibit B: Compliance Summary

Exhibit C: Wellness Calendar