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Corporate Culture of Health: Elusive and Expensive

February 2020 Vol 13, No 1 - Editorial
David B. Nash, MD, MBA
David B. Nash, MD, MBA, is Editor-in-Chief, American Health & Drug Benefits, and Founding Dean Emeritus, Jefferson College of Population Health, Philadelphia, PA.
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When I was recruited to Jefferson in early 1990 as a young assistant professor of medicine, I learned that our employee benefits were approximately 12 cents of every dollar spent on total benefits. In other words, from the university’s perspective, they were paying a reasonable fee for all the relatively rich benefit packages that were available to most employees at that point in history. When I stepped down as Dean of the College of Population Health earlier last year, employee benefit costs were topping out at 37 cents for every dollar spent—more than triple of what they were just 3 decades ago.

Most readers are familiar with the growth in overall healthcare costs, which is the core component of the increase in employee benefit pricing. Some recent new data on the juxtaposition of a growing interest in creating a “corporate culture of health” along with skyrocketing benefit expense, have caught my attention, and I’d like to sort this out here.

A recent article published in the Wall Street Journal highlighted findings from an important report titled the Kaiser Family Foundation 2019 Benchmark Employer Health Benefits Survey.1,2 It surely is a mouthful, but this report highlights several key findings worth reviewing.

First, the average premium for family coverage increased 22% during the past 5 years and 54% during the past 10 years—significantly more than either workers’ wages or inflation.2 We’ll return to that in a moment. Second, the average annual premium for family coverage rose 5% to cross the rubicon whereby the average premium for family coverage is now more than $20,000 annually.

Finally, the report also notes that 28% of all covered workers, and 45% of those in small companies, now have high-deductible health plans with a $2000 or higher deductible requirement. These latter 2 percentages represent significant increases from 2009, when only 7% of all companies and 16% of small company workers had such a high-deductible requirement.2

We have reached a sad state in which healthcare costs for people who are lucky enough to have good employer-based coverage have skyrocketed. I agree with the well-known policy analyst Paul Keckley, PhD, that “For policymakers, the role of employer-sponsored health benefits needs fresh attention: companies that provide insurance to their employees should not be expected to underwrite the costs of care for those lacking coverage or in plans like Medicare and Medicaid that reimburse less than costs. And companies that do not provide health insurance, or those that provide coverage that’s unaffordable to their employees, should contribute funding that’s on par with the needs of their employee population.”3

Dr Keckley concludes by noting that, “What they’re [corporate employers] sensing is that the health system—doctors, drug makers, hospitals, insurers—is ill-prepared to address their concern. They believe our costs are indefensible, much that’s done is necessary, prices are inaccessible, and care is fragmented and uncoordinated. They blame hospitals, drug companies and doctors for waste and see political inaction as complicit.”3

Dr Keckley’s views are widely respected, and the combination of the Kaiser report and his analysis is a one-two gut punch for most employers, large and small. However, at approximately the same time, a very important national survey that examined how companies create a “corporate culture of health” was published in one of our scholarly journals, the Milbank Quarterly.4 Let me summarize this piece of scholarship, and then we will juxtapose the Kaiser and Keckley analyses with that of Kyle and colleagues in the Milbank Quarterly report.

For the Kyle and colleagues’ report, a team from Harvard Business School, the Harvard School of Public Health, and the Stanford Schools of Medicine and Business collaborated to conduct a comprehensive “national survey of more than 1000 businesses of varying sizes and industries to benchmark private sector engagement in employee, environmental, and community health, which we collectively refer to as a corporate culture of health.”4

I believe this is the most current and comprehensive review of corporate energy being devoted to creating a culture of health that I have reviewed, and the findings are sobering.

Many of our readers have been following the evolution of a corporate culture of health for decades and, indeed, the disease management “movement” is now celebrating its silver anniversary. What type of progress have companies made in this relatively amorphous arena of attempting to improve the health of employees in various industries?

Kyle and colleagues note that, “The most common action taken to achieve employee health was to offer rewards or reimbursements for positive activities, such as obtaining fitness club memberships (42%). In contrast, only 14% of businesses-imposed surcharges for unhealthy behaviors, 15% offered financial incentives for healthy behaviors, and 18% required their suppliers to offer health and wellness benefits to employees.”4

In sum, despite decades of work to build and implement the corporate culture of health programs, very few companies have made what I would refer to as evidence-based progress on this front. Sure, there are a myriad of reasons for this lack of progress, including a lack of political will, complex insurance rules and regulations, wariness on the part of employees that Big Brother is watching them, and, of course, our extant national culture that is best characterized by obesity and lack of exercise.

Kyle and colleagues conclude, “Despite significant potential, the value proposition of a corporate culture of health is uncertain and requires further development.”4

I am saddened by the results of this excellent survey from very respectable institutions. I believe the survey was conducted in a comprehensive and transparent manner, and I embrace and accept the survey’s findings. However, the institutions probably have ignored other research, such as that from Fabius and colleagues, which has analyzed a corporate culture of health and its connectivity to improve profitability and a direct link to greater return to shareholders.5 How we reconcile Kyle and colleagues’ survey results with other work, such as that by Fabius and colleagues, will be important to research in the near future.

While employee benefit spending for healthcare continues to increase, companies are struggling with the concept of behavioral economics, and they continue to question their overarching role in creating what we now collectively call a “culture of health.” I am concerned about this disconnect, and these recent publications have heightened my level of concern for the future.

Ultimately, individuals are responsible for their own health. Yet, although our nation remains unique in the Western world for connecting employment and access to health insurance, one can still question, what is the appropriate role for corporate America in improving health? Corporate America has had a largely disjointed attempt at trying to tackle this critically important national policy issue.

As always, I am interested in your views. You can reach me via e-mail at This email address is being protected from spambots. You need JavaScript enabled to view it..

David B. Nash, MD, MBA, is Editor-in-Chief, American Health & Drug Benefits, and Founding Dean Emeritus, Jefferson College of Population Health, Philadelphia, PA.

References

  1. Mathews AW. Cost of employer-provided health coverage passes $20,000 a year. Wall Street Journal. September 25, 2019. www.wsj.com/articles/cost-of-employer-provided-health-coverage-passes-20-000-a-year-11569429000. Accessed February 6, 2020.
  2. The Kaiser Family Foundation. Employer health benefits 2019 annual survey. 2019. http://files.kff.org/attachment/Report-Employer-Health-Benefits-Annual-­Survey-2019. Accessed February 6, 2020.
  3. Keckley P. Survey result: U.S. employers taking health matters into their own hands. September 30, 2019. Keckley Report. www.paulkeckley.com/the-keckley-report/2019/9/30/survey-result-us-employers-taking-health-matters-into-their-own-hands. Accessed February 6, 2020.
  4. Kyle MA, Seegars L, Benson JM, et al. Toward a corporate culture of health: results of a national survey. Milbank Q. 2019;97:954-977.
  5. Fabius R, Loeppke RR, Hohn T, et al. Tracking the market performance of companies that integrate a culture of health and safety: an assessment of Corporate Health Achievement Award applicants. J Occup Environ Med. 2016;58:3-8.
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