Policy

Wellness programs can put state health plan costs on a diet

Wellness programs that encourage workers to stop smoking or lose weight are showing up in more health insurance plans, state health plans included. But North Carolina’s State Health Plan took a different course this year. A comprehensive wellness plan introduced in 2009 was eliminated. Instead, the more than 664,000 teachers, state employees and retirees in […]

Wellness programs that encourage workers to stop smoking or lose weight are showing up in more health insurance plans, state health plans included.

But North Carolina’s State Health Plan took a different course this year. A comprehensive wellness plan introduced in 2009 was eliminated. Instead, the more than 664,000 teachers, state employees and retirees in North Carolina must pay more for their share of healthcare coverage.

Changes to the plan were implemented last year as the state looked for ways to cover a budget shortfall. Rising healthcare costs affect everybody, but state governments face challenges that the private sector does not. Mark Duggan, professor of business and public policy and healthcare management at the University of Pennsylvania’s Wharton School of Business, said that private sector employers deal with rising costs by scaling back coverage or even eliminating it altogether. States don’t have that option.

But Duggan added that there are ways states can see a greater bang for their buck from wellness initiatives measured against private employers. Wellness programs reduce healthcare costs in the long run. Compared to the private sector, public employee turnover is low. That means that a state worker who gets healthy and stays healthy will save state healthcare costs over a longer period of time.

“These benefits are going to accrue; the longer the better,” he said.

If a new wellness program or other changes to the state health plan come, they won’t originate with the Legislature. Oversight of the state health plan shifted last year to the North Carolina Department of State Treasurer and a board of trustees. Treasurer Janet Cowell has been participating in meetings across the state to hear concerns state workers have about coverage. Cowell’s department also coordinated a symposium held at North Carolina State University last week that included representatives from seven states, each of them bringing a different perspective on how to address healthcare costs. Cowell spoke with MedCity News after the symposium.

Q. Are there any unique challenges for North Carolina’s state health plan?

A. Everybody thinks they’re unique. But frankly, there’s a lot of commonalities. The fact that these costs are hitting states more because there are a lot more public employees, chronic illnesses, how do you get people healthy … to me, there are a lot more commonalities than differences.

Q. Are there ideas from other states that would work particularly well here?

A. I think the problems, the challenges are common. What sorts of solutions we have, you’ve got a board and a legislature and you’ve got budgets. Obviously we have a very noneffective wellness program. This plan is not structured well at all. Certainly with high co-pays, people are not going to the doctor; they’re avoiding getting preventative care because of the way the plan is structured. I would say we’re out of the market even more so than any of these plans and we’re further behind on that area. Which of those wellness initiatives would work best? I think we’ll work through all that as a board.

Q. What are the next steps in making changes to the state health plan?

A. We did a listening tour. We’ve done this policy forum. At our next board meeting, we are probably going to contract with Segal, who is our benefits consultant and actuarial consultant to start facilitating a strategic plan for the board … There are a lot of states that are further down the road. One of the presenters said her presentation should be trying to keep up with Susan (Susan Rodriguez is deputy personnel administrator for the State of Rhode Island, which is seeing savings from its state worker wellness program). There’s a lot of things that we have not done here because it was run out of the Legislature and you have 170 people and they were running in so many different directions. I think we’re further behind, especially on that wellness piece, than other plans.

Q. Was there anything presented that came as a surprise?

A. There’s a ton that’s new. You have the medical professionals on the board who obviously know a lot about healthcare and are probably more familiar with some of these concepts. But even getting familiar with the specifics of a state health plan and how that works and dealing with a public sector population, I think that’s very new to them … I don’t think the outcome of this was meant to say we’re going to start narrowing down the funnel. We’re still on the open part of the funnel. There are all these ideas. It will be interesting to hear at the next board meeting how they digested this, what their reactions were.