Many employees don't realize they have diabetes until it's too late. Employers are taking a proactive stance, but many hurdles remain.
When Ron Pilkowicz was diagnosed with Type 2 diabetes six years ago at age 45, it rocked his world -- and not in a good way.
"It was scary, very scary," says Pilkowicz, a technical training lead specialist at Stamford, Conn.-based Pitney Bowes. "When I initially found out, it was very stressful, and it still is. Every day is a battle with the disease."
It turns out taking on diabetes isn't just a hassle for those diagnosed with the disease. It's an ongoing -- and expensive -- challenge for the companies that employ them. About 24 million Americans have diabetes, with 90 percent or more having Type 2, according to the Centers for Disease Control in Atlanta.
It's estimated another 57 million are "pre-diabetic," with many clueless about the chronic condition that's fast becoming a global epidemic and is referred to as a "stealth scourge" because it slowly and silently confers its destruction.
As the population ages, the number of diabetics is predicted to climb precipitously -- and so will the costs of treating them.
The American Diabetes Association estimates 1 in 5 healthcare dollars are spent caring for someone with diabetes. The cost of diabetes care rose by an average of 9 percent annually from 1996 to 2007, the last year for which figures are available, according to the Altarum Institute, an Ann Arbor, Mich.-based nonprofit research firm.
Large organizations, which have been on their heels for years while confronting escalating healthcare costs, are getting the message. More than seven in 10 large employers are targeting diabetes this year, making it the No. 1 health condition they are focused on, according to The Road Ahead, a survey released in March by Lincolnshire, Ill.-based Hewitt Associates. That compares with 46 percent in 2008, according to the survey.
"We know diabetes is our No. 1 cost item among all our [employee] health issues," says Keith Clark, a human resource manager for Ann Arbor, Mich.-based Affinia Group, a 10,000-employee company that provides industrial-based products and services. "We think we can get the biggest bang for the buck if we can do something about it."
Employers are using a variety of approaches to tackle diabetes, which is linked to several serious health conditions -- including heart disease, stroke, kidney disease, blindness and nervous system disease -- and is a leading cause for amputation. But it's no small matter to address the illness, which is the seventh-leading cause of U.S. deaths.
Diabetes-management programs can be expensive. And, while there is the promise of a significant return-on-investment long-term, it's hardly assured. Moreover, motivating employees to become more engaged in addressing their Type 2 diabetes remains a critical ongoing challenge.
"Not everyone is ready to make a change (in their lifestyle). Some are afraid the change will be too great," says Elysa Jacobs, manager of health-improvement programs at Pitney Bowes, a 33,000-employee global leader in customer communications technologies.
The Power of the Workplace
Although diabetes has long been a significant driver of healthcare costs in U.S. workplaces, most executives have had a minimal or sketchy understanding of that. However, a variety of relatively recent reports and studies show just how expensive the disease is -- while illuminating the potential for major cost savings.
In what some consider a landmark report (published in 2002 in the New England Journal of Medicine), a diabetes-prevention program funded by the National Institutes of Health and the CDC demonstrated that a pre-diabetic making lifestyle changes and a modest weight reduction could prevent the disease or markedly delay its onset.
Meanwhile, numerous studies on so-called "value-based insurance design" have demonstrated that by waiving co-pays for diabetes medications and certain supplies and offering counseling from a specially-trained pharmacist, among other things, clinical outcomes can improve and employers can save $1,100 annually per diabetic employee.
When you consider that an analysis by Minnetonka, Minn.-based UnitedHealthcare Group showing the annual estimated cost of a diabetic surpasses $22,000 annually -- or about 13 times more than the average cost of a "healthy" employee with no chronic conditions -- any cost-savings are bound to grab employers' attentions.
It's not just that diabetes is draining healthcare dollars from organizations; indications are the disease is also sapping productivity.
In writing a 2008 Diabetes Care article, The Lewin Group, a Falls Church, Va., healthcare policy research and management consulting firm, estimated that the two work days lost annually by diabetics due to the disease expanded to 14 days lost yearly when "presenteeism" -- in which employees show up for work while impaired by an illness -- is taken into account.
As it turns out, large organizations are ideal venues for trying out ways to mitigate Type 2 diabetes. They typically have the infrastructure and resources necessary for administering diabetes prevention, education and treatment programs.
"The rationale is pretty simple" for addressing diabetes in the workplace, says John Buse, Division of Endocrinology chief at the University of North Carolina and former president of the American Diabetes Association's medicine and science group. "People spend more time at work than any other place except home."
Pitney Bowes has taken pride in offering some sort of wellness initiative since the mid-1990s. But the company was surprised in the late 1990s, when it discovered -- through questionnaires, screenings and other means -- that about half of its domestic employees were plagued with chronic illnesses, including Type 2 diabetes.
"That's when we realized we needed to do a lot more work," says Elysa Jacobs.
One key change the company made in 2001 was to relieve some of the financial burdens its diabetic employees dealt with in treating their disease. So-called Tier 3 and Tier 2 medications, in which employees paid 50 percent and 30 percent of the cost, respectively, were shifted to Tier 1, where workers contributed just 10 percent.
By assuming most of the burden of these higher-cost drugs, Pitney Bowes addressed a major impediment to improving employees' medication-adherence rates.
Financial incentives are critical, says Dr. Deneen Vojta, a senior vice president at UnitedHealth Group.
"It's these out-of-pocket expenses, where people with chronic diseases feel it more than those without," she says.
After implementing the changes in 2001, Pitney Bowes found that medication compliance had already risen by 6 percent in 2004 while the annual cost of employee diabetes care dropped by 6 percent. But the really big news was that costs for diabetes-related disabilities -- including heart disease and kidney or eye issues -- decreased by a whopping 75 percent.
Educating workers is a key element of diabetes management. At Pitney Bowes, one-on-one counseling sessions are available at its seven onsite medical clinics. In these 15- or 30-minute sessions, about 80 employees talk yearly with a nurse, nurse practitioner or dietician about the disease's impact; how to test for blood sugar; nutrition and exercise; preventing and managing long-term complications; and even stress.
Pitney Bowes' pharmacy-benefit manager -- Woonsocket, R.I.-based CVS/Caremark -- provides phone and in-store counseling to workers about their medications and contacts the physicians of noncompliant patients. Some of this outreach is also performed by health plans, says Andy Gold, PB's executive director of global benefits planning.
The Adherence Challenge
PB offers other measures as part of a comprehensive effort to prevent and manage diabetes. For instance, it promotes its on-site fitness facilities and encourages walking clubs and sponsors an annual Walk Day. The company also offers 12-week weight-management programs (which include team weight-loss challenges several times a year).
"We want to reinforce that even modest changes can make a really big difference in reducing long-term complications," says Jacobs, whose office teams with HR in sending out regular e-mails and mailings on wellness. "It's important for employees to know [diabetes] is manageable."
Employees who complete an online "Learn and Earn" program that promotes healthy practices, including modules on diabetes management and prevention, receive $100.
Additionally, Jacobs says, the company is offering healthier foods at several onsite cafeterias and at many vending machines. Healthier cafeteria foods are discounted, and the typical candy-and-chips impulse purchases by the cash register have been replaced with more-healthful fruits, nuts and other items.
All told, says Jacobs, "What we really do is approach employees with several different options, so they can determine what will help them. We also want to remove barriers to make it easier for them."
Still, challenges remain for Pitney Bowes -- and other large organizations.
The medication-compliance rate among Pitney Bowes' diabetic employees is now a very respectable 81 percent. At the same time, there are fewer high-cost claims related to diabetes. But Gold isn't satisfied. He knows improved adherence leads to better clinical outcomes and even lower medical costs.
Research underscores the importance of medication compliance, according to CVS/Caremark, showing that for every dollar spent on medications for diabetes treatment, $7 is saved in diseases-related costs.
But medication adherence is often an ongoing struggle, especially for Type 2 diabetics. A March 2010 American Journal of Managed Care article reported that, among other things, this may be due to inadequate education and understanding among diabetics; the fact that many are depressed; insufficient funds to pay for out-of-pocket costs; the difficulty of making lifestyle changes such as eating healthier and exercising more; and problems following complex, inconvenient medication regimens. Not to mention inadequate coordination of treatment.
"Employees have a lot of competing priorities in their lives," says Jacobs. "We want to catch their attention and get them to prioritize their health now because that will benefit them in the long run."
When Affinia Group first offered annual health screenings in 2004, it was an eye opener for many employees. They had never before had their health checked at work, let alone seen a doctor there, says Keith Clark, human resource manager at the company's Gastonia, N.C., facility, where the self-insured organization is in the midst of a pilot program of sorts evaluating diabetes management and prevention among 1,300 employees.
"You wouldn't believe the number of people who didn't have a clue they had diabetes," says Clark.
The prospect of qualifying for markedly lower health insurance premiums served to motivate many Affinia workers to answer a questionnaire and take a blood test measuring their blood sugar and cholesterol. Financial incentives remain a bulwark of the firm's programs to manage diabetes.
Those incentives have ramped up with Affinia's involvement in the Diabetes Health Plan, a preventive-care benefits plan from UnitedHealthcare that's aimed at controlling the treatment costs for diabetic and pre-diabetic employees and their families while encouraging healthy behavior. The DHP, offered as a pilot program in 2009 at Affinia and two other companies, had -- as of late summer -- been extended 30 large employers.
The DHP's emphasis on financial rewards is clear at Affinia: Diabetics and pre-diabetics voluntarily enrolled in the DHP at three Gastonia facilities receive $200 in their health- reimbursement account just for signing up. Their qualified spouses receive another $200, which is put into a combined account.
If Gastonia's eligible employees complete a diabetes-education program -- offered over the phone by UnitedHealthcare or at a Gastonia Family Health classroom -- they receive another $200 for their HRA. Same for their qualified spouse.
Furthermore, if eligible employees and spouses get a yearly eye exam, visit a doctor or nurse practitioner twice annually to check their blood pressure, blood glucose, hemoglobin and cholesterol and participate in some type of weight management program, they receive yet another $200.
While appealing, another portion of the DHP may be even more financially attractive, says Clark. That feature includes some free diabetes supplies and diabetes-related prescription drugs. Clark, who hopes the free meds and diabetes education will negate any need for tracking medication compliance, estimates those out-of-pocket costs could easily top $1,000 or more annually.
"Financial incentives make a big difference," he says, adding that approximately 100 Gastonia employees and covered spouses participate in the DHP.
Another issue Affinia employees pay attention to is their privacy. That's why Clark says he's glad Affinia has outside parties administer the health screenings and DHP. They help ensure Affinia meets regulations involving the Americans with Disabilities Act and the Health Insurance Portability and Accountability Act, he says.
"I have no idea who has or doesn't have diabetes unless they voluntarily tell me," says Clark.
Affinia's other diabetes-related efforts extend to offering up to another $200 into the HRA if any domestic employee and covered spouse use a fitness facility. Weight-loss challenges are also offered at many company venues and healthier foods have been introduced at several Affinia locations.
Starting in 2012, Clark says, he anticipates offering another financial incentive to further encourage healthy behavior among all employees. If they are tobacco-free and maintain certain body-mass indexes and blood-pressure levels, they would get another $400 placed in their HRA. Same for eligible spouses.
It will be conceivable, then, for a diabetic employee and covered spouse to score up to $2,400 annually in their HRA account. While that seems generous, Clark notes that the HRA funds will offset anticipated increases in employees' insurance costs.
Clark says he is fortunate in that one diabetes-management challenge confronting many organizations -- collaring the attention of senior leaders -- is a nonissue at Affinia. But the company struggles, like most other organizations, in encouraging employees to take ownership of the disease.
Clark suspects many more diabetics and pre-diabetics could benefit from Affinia's programs. In part, he hopes to lure them in by making their involvement less daunting.
"Our programs can be hard to understand, so we try to communicate and communicate them," says Clark, adding that his efforts include one-on-one conversations, group meetings with employees, home-mailings and e-mails and in-plant posters and brochures. "We're trying to make it as easy as possible."
Looking toward the future, it's clear that more organizations should try to get ahead of the curve by focusing on pre-diabetic employees. After all, UHC studies estimate the average annual cost for treating a pre-diabetic patient at $5,000, compared to $30,000 for a diagnosed diabetic with complications.
PB's Jacobs foresees her company becoming increasingly proactive, not just with diabetes but with all chronic conditions.
"There's a certain percentage of the population, when they come across a health issue, they will take action right away," she says. "But other people need extra encouragement, and that's what we hope to do. Unfortunately, diabetes is not something that will go away completely. It's really an important area to focus on, and that's something we will continue to do."
As will many other large employers. They have little other choice.