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Wellness Program Reaps Cost Savings for Unionized Workforce

By Stephen Miller  4/15/2006
William B. Bunn MD, JD, MPH

"In a unionized environment, cost shifting for the most part is off the table," said William B. Bunn, vice president for health, safety, security and productivity at Melrose Park, Ill.-based International Truck & Engine Corp. On April 18, he addressed a session of the World Health Care Congress 2006 in Washington, D.C., outlining how a heavily unionized manufacturer launched a comprehensive wellness initiative, resulting in significant health care savings without health plan design changes.

Bad Habits, Bad Health

International Truck, with facilities throughout the Midwest, has 14,500 employees. Demographically, the workforce average age is 45 years. It is primarily male (a 3.5 to 1 ratio), and 62 percent unionizedmostly through the United Auto Workers.

The main health care cost drivers the company confronts are lifestyle-related cardiovascular disease and muscular-skeletal disease (related to production work at the company's manufacturing plants). The leading risk factors have included weight, stress, lack of physical activity and smoking.

International Truck & Engine Corp.: Top Health Costs by Risk Factors

Top Risk Factors

Additional Cost per High-Risk Employee

% at Risk

Total Annual Additional Cost of Current Risk Factor

Weight

$690

28%

$2,801,400

Depression

$2,326

4%

$1,349,080

High stress

$1,435

5%

$1,040,375

High blood pressure

$390

15%

$848,250

Insufficient exercise

$339

17%

$835,635

Tobacco

$447

11%

$712,965

Total

$7,587,705

"Our health care costs were substantially greater than the U.S. average," Bunn said, coming in at around $10,000 per person among blue-collar workers, $6,000 among white-collar staff and about $12,000 for retirees not yet on Medicare. Worse, "Absenteeism and lack of productivity were probably as big or bigger cost factors than actual health care."

"In our situation, we do not have the option of changing our health care plan" for the blue-collar workforce and retirees, which is subject to union negotiations with the UAW every five years. With limited ability to alter the plan design, "the real issue for us is preventing disease," Bunn said. "We have to influence health behavior, because we're not going to have a lot of cost-sharing kinds of strategies."

The 'Vital Lives' Program

In 2003, the company launched an aggressive approach to reducing costs through prevention and disease management. By 2005, "our costs were actually down for our active populations, slightly up for retirees and overall essentially flat."

How do you go from above national average to flat costs? "The key has been Vital Lives, a wellness program that extends beyond the usual wellness program," Bunn said. Its vision is "to promote employee accountability to be smart, be healthy, be safe and be responsible."

Through Vital Lives, employees can participate in health screenings, work out in several on-site fitness centers, receive in-season flu shots and more. A key message: Behavior does impact health, and ultimately behaviors will determine how healthy you are, how productive at work, home and in retirement.

The program is implemented through a corporate wellness council and wellness teams in every operating site. The aim is for "multiple interventions to support employees to change unhealthy behaviors and make better health care decisions."

Each local cross-plant team is made up of union and management volunteers and has an executive sponsorusually the plant manager. The executive approves the budget and local programs. Corporate-sponsored programs such as health risk appraisals and disease management programs are paid through the health plan.

"The local programs are picked by the site guys," Bunn said. "They decide what they want to do over the course of this year to improve the health of the employees."

Participation has been increasing every year. "This is due to local teams communicating the program and local plant management supporting their efforts," Bunn said, noting the importance of support from both senior management and local unions. "If you can get support of the local union, you get a lot of support. It's top-up and bottom-down."

New ideas come from the results of data collected from the health risk assessments and wellness screenings, employee surveys and post-participation evaluations. Each work site also undergoes an annual health and safety audit. The health promotion section of the audit, which makes up 10 percent of the overall score, is based on the Wellness Councils of America (WELCOA)Gold Well-Workplace standards. International Truck & Engine has won the WELCOA gold award seven years in a row, and received the platinum award the previous year.

Popular get-and-stay-healthy activities at International Truck & Engine include:

 

1. Trucking Across North America (TANA). A 13-week exercise program and team competition with incentives for success.

 

2. Spring Tune Up. A six-week intervention program in which participants set goals for exercise and nutrition and receive incentives based on making their personal goals.

3. Weight-4-Me. A team-oriented incentive program to motivate and counsel individuals to achieve their personal weight-loss goals in 12 weeks, followed up by a 90-day maintenance phase.

Assessing Health Risks

Annual health risk assessments, which are voluntary and confidential, are a key part of International Truck's initiative. The intent is to channel:

Healthy employees into exercise/nutrition activities to keep them healthy. "If you're healthy, we offer physical fitness programs, which 25 percent join," Bunn said. These include team competitions that involve senior management, and so provide "leadership by example."

At-risk employees into behavioral change interventions, such as those for smokers and the overweight.

Employees confronting health challenges into disease management programs.

"For the employee, it gives a snapshot of his or her current health status and ways to improve or maintain it," said Bunn. "For the company, it gives overall information to help develop future health promotion strategies that will improve the overall health of employees."

Managing Disease

For those now dealing with health challenges, the company provides disease management programs, some in association with health care provider Caremark, and others run independently, through government agencies or in partnership with pharmaceutical firms.

The voluntary disease management programs address conditions including asthma and pulmonary disease, heart conditions, diabetes and ulcers. The goal is to help employees take an active role in their own care.

As an example, for the company's diabetes management program, intervention was through one-on-one consultations, with on-site education, telephonic coaching and individual evaluations. Of participants in a pilot program, after eight months:

  • 50 percent increased their level of exercise.
  • 40 percent increased self-glucose monitoring with the meters given to them.
  • 30 percent increased or began physician monitoring and compliance.
  • 27 percent lost weight.
  • 20 percent decreased blood pressure and blood glucose.
  • 20 percent avoided incidents of low blood sugar.

Another success is the firm's allergy program. The firm's research shows that employees in the high-severity allergy group were 3.2 times more likely to have an accident and to be less productive overall than healthy employees. "Allergies can have major-league impact," Bunn noted.

Of an identified at-risk population of 10,000 employees, some 6,000 volunteered the first day. "We did have an incentive," Bunn noteda free T-shirt. But there was one problem: "We discovered you can't give out T-shirts from China to a unionized U.S. population. So we sent back a lot of T-shirts."

On a more serious note, the project resulted in reviews of International Truck's drug formulary, development of a step therapy protocol for non-sedating agents and a communication-awareness campaign for all employees.

Among other health initiatives: International Truck has established occupational health clinics in all but two of its manufacturing facilities, and is extending clinical services at three of its facilities to include non-occupational care.

The chart below presents current and future cost savings attributed to International Truck's initiatives:

International Truck & Engine Corp.: Cost Avoidance Savings

Programs

2004 Participation
(unless 2003 indicated)

2004 Savings
(unless 2003 indicated)

Projected Savings Based on 100% Participation

Disease management

12%

$699,228

$5,826,900

Flu campaign ('03)

42%

$509,250

$1,212,500

Health club subsidy

22%

$156,500

$711,364

Health risk assessments/wellness screenings ('03)

20%

$1,125,5000

$5,625,000

Self-care program (Healthwise)

44%

$2,420,000

$5,500,000

Smoke-free International

1.4%

$70,626

$565,455

Trucking Across North America

16%

$267,288

$1,670,550

Total

$5,247,892

$21,111,769

"These are numbers that were comfortable taking to our CFO," Bunn said. "It's about $5 million to $6 million a year that we can quantify. When we get the participation we want, we project $20 million to $30 million, year on year."

More than cost savings, International Truck has improved the health of employees and their families, reduced absenteeism and turnover and enhanced productivitywhile working with a unionized workforce to ensure the program's success.

Stephen Miller is the editor/manager of SHRM Online's Compensation & Benefits Focus Area 


 SHRM Video:
Wellness Efforts and Unions
Neil Gordon, M.D., chief medical and science officer for Nationwide Better Health, offers tips for effectively promoting wellness in a union environment.
 View this video

 

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