As advocates for the best interests of workers, unions have a logical reason to be concerned with and involved in employee health management (EHM) strategies and tactics used by employers. Unfortunately, because employers often use health benefits as a “stick” to promote employee involvement in and behavior/health status changes as part of their EHM tactics, unions more often than not are involved as adversaries.

The California Nurses Association, representing nurses in disputes with hospitals, is taking on Sutter Health at its Alta Bates Summit Medical Center in Berkeley and Oakland over “punitive” elements in the hospitals’ EHM program. It also takes issue with the health risk assessment (HRA) used in the program, deeming it an invasion of privacy. The nurses’ association has been joined by six other labor groups to fight another wellness program, offered by the University of California system at its campuses, arguing that the 70,000 workers they represent will not participate in the program during 2008. [M-A. Hogarth “Wellness: Labor’s New Bargaining Chip” East Bay (CA) Business Times Jan 18, 2008 (eastbay.bizjournals.com)]

Concerns that the confidentiality and security of individual health information will not be protected, and the potential that employees may be penalized in terms of benefits of out-of-pocket health costs drive unions’ objections. Of course, many employees and their dependents are eligible for wellness programs offered by the health insurance plans, such as Kaiser Permanente. Other employers in California as well as throughout the U.S. offer wellness incentives, and promised rewards have been shown to dramatically increase worker participation in both HRA and targeted health improvement efforts.

Safeway, one of many such employers, pays for the first $1000 of healthcare cost deductibles, finances preventive services and offers free wellness programs. It reports that its program reduced healthcare expenditures by 13% in 2006, with most employees who participated producing a 25% or greater reduction in costs. The newspaper article, however, cites growing skepticism about whether such programs are as effective as claimed by the EHM industry.

Unfortunately, it cites as one reason for such skepticism a 2007 Rand study published in the American Journal of Managed Care on the disappointing and mixed results in 317 studies of disease management (DM) programs. [S. Mattke, et al. “Evidence for the Effect of Disease Management: Is $1 Billion a Year a Good Investment?” American Journal of Managed Care Dec 2007 670-676] While skepticism regarding effects may be true for the federal government and about DM, the same is hardly true for employers about EHM.

DM is limited in most cases to the sickest patients, and involves what are often the most expensive methods for managing patients. While physicians at one primary practice managed diabetic patients at a cost of only $104 added costs per patient per year, for example, [P. Mohler & N. Mohler “Improving Chronic Illness Care in a Private Practice” Family Practice Management 12:10 Nov/Dec 2005 50-56], DM suppliers in Medicare demonstration projects charged between $960 and $5328 per year for their programs. [R. Brown, et al. “The Evaluation of the Medicare Coordinated Care Demonstration: Findings for the First Two Years” Mathematica Policy Research, Inc. 2007]

Moreover, the Rand study, like so many similar skeptical results, involved only direct medical care cost savings, totally ignoring the dramatically higher financial benefits, usually two to five times as great, of worker productivity and performance improvements linked to improved health. The privacy of information is bound to be an issue in EHM, though most employers outsource both HRA and intervention programs to specialty suppliers, including healthcare organizations such as Sutter Health Partners and the Mayo Clinic, which insulates the data from the employers.

The issue of incentive payments will undoubtedly be a bone of contention between unions and employers, since it can mean that some employees become financially worse of than their peers, simply because of health reasons. Since incentives are typically paid for effort, rather than healthy status, this should not be a major difficulty, as long as the incentives add to the compensation rates agreed to by the union. And since the incentives add to that compensation, though the addition is limited to no more than 20% of the health benefits costs by federal law, the “carrot” approach may be more acceptable than the “stick”.

One approach to soothe unions’ concerns, and that of the workers represented, may be to create a “gainsharing” approach to EHM, where workers will benefit in much the same way as they do with profit sharing plans and other schemes where workers share in the performance of their employers. Since EHM saves employers money, often hundreds, even thousands of dollars a year per employee who is either healthy or actively participating in EHM efforts designed to empower them to be healthier, sharing such savings makes sense from both a union/employee relations and an incentive perspective.

When EHM deliver results, this is mainly because of employees’ (and dependents’ plus retirees’, where applicable) efforts, not merely those of the employer and specialty EHM suppliers. It is arguably only just that employees share in the financial benefits they are largely responsible for delivering. Depending on how egalitarian unions choose to be, the gainsharing may apply to the entire workforce, equally, to employees based on their current compensation level, differently to those in particular units, or teams, even to specific individuals, based on their health performance improvement.

As long as the net effect of EHM efforts is to increase the health or workers, and their compensation as well, an EHM program may be more acceptable to unions and their membership – only time will tell. The key will be to ensure that the overall costs of such programs, and the share of savings that employers will demand for themselves, leave plenty of room for employees to share in the gains as well. This will undoubtedly mean that the full range of employer financial benefits, including gains due to increased productivity and improved performance will have to be measured, or at least estimated on a validated basis, in order to yield sufficient gains.

This could make it in the best interests of unions for them to participate actively in the development of measurement or estimation methods, to increase both their use and their accuracy/credibility for both employers and employees. In this way, unions need not function in an adversarial capacity so much as a partner in seeking better health and compensation for their members, as well as the financial gains for employers that will make these possible.