The benefits of a healthy workforce are well documented. When employees are healthier, they are more engaged in their jobs and tend to perform better overall. For the most part, employers understand this relationship and as a result, offer wellness benefits at no extra cost to the employee. Yet employer healthcare costs continue to rise, and the increase in high-deductible health plans has pushed a substantial financial burden onto employees and their families.
Low-wage workers are the ones most impacted, in part because they have the highest prevalence of unhealthy lifestyle behaviors and chronic conditions. This group of individuals, earning less than $40,000/year, represents nearly half of the U.S. adult workforce, and is challenged by high out-of-pocket costs.
A recent study of more than 40,000 employees currently enrolled in RightOpt®, the Conduent Human Resources Services private exchange, offers strong supporting evidence. Following adjustment for differences in demographics and chronic condition prevalence, low wage workers appear to be most negatively impacted. Low-wage workers use healthcare differently than their higher-paid counterparts. with a more reactive approach to healthcare. Individuals in the low-wage category used preventive care half as often as their higher paid peers, and notably, were significantly less likely to participate in incentive-based programs to learn about their health.
As a result, low-wage workers:
- Had nearly twice the hospital admission rate
- Experienced more than four times the rate of preventable hospitalizations
- Had more than three times the rate of emergency department visits
Low-wage workers also had higher healthcare costs, averaging $4,835 per year, in comparison to moderate-wage earners, who averaged just under $4,000/year, and about the same as workers in the highest wage category (over $70,000/year), where healthcare costs averaged just over $5,000/year.
Healthcare costs generated by low wage workers appeared to be driven primarily by high-cost services use, including hospitalizations and emergency department visits. In contrast, the high total costs seen among high wage earners were primarily due to high outpatient care use.
How can we reverse the trend?
One of the best ways to help these employees regain control of their wellbeing and healthcare costs is education. While broad-based incentive programs have not shown as much success in engaging this group, the study suggests that targeted messaging directly to low-wage employees may have a greater benefit. The study also concludes that despite rising costs and increased deductibles, now may be the time to develop novel benefit designs to reduce the cost barriers to appropriate care for low-wage workers.
If identifying a problem is the first step in creating a solution, this study, released recently in Health Affairs, does just that. As companies look for ways to better support their employees’ health and well-being, and in turn, create a more productive workforce, innovating thinking in both communications and benefit designs may be the key.
Editor’s note: The full article published in Health Affairs, by lead author, Bruce Sherman, MD of Conduent Human Resources Services, is available here.