Benefits Column

Brilliant Mistakes

Does sound HR leadership have a greater impact on employee health, absence and performance than wellness programs? If the unexpected results of a particular research project are any indication, the answer is an unequivocal "Yes."

Monday, June 3, 2013
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I've been fortunate to have numerous mentors throughout my career -- subject matter experts of one kind or another who altered how I considered a problem or treated a patient. Robin McKenzie was one such influencer.

McKenzie, a physiotherapist from Wellington, New Zealand, stumbled upon one of the most effective and influential methods for the nonsurgical prevention and treatment of back pain.

As McKenzie tells the story, a patient by the name of Mr. Smith came in for treatment of his ongoing back pain. McKenzie sent him to a treatment room and instructed him to lie face down on an articulated medical bed. When he arrived five minutes later to begin the session, McKenzie was aghast to find his patient lying face down, despite the fact that the head of the bed had been left raised after a previous patient, so he lay there with his back arched backwards. In 1956, positioning a patient in this manner went against every recommended back-treatment approach.

McKenzie maintained his composure and made the first of many intelligent decisions. He elected to listen to the patient and simply asked Mr. Smith how he felt. The patient stood up and said his back pain was significantly reduced.

McKenzie went on to treat Mr. Smith and other patients in the same manner - going against all current medical advice. After 10 to 15 years of using this treatment approach, McKenzie found that such extension helped 80 percent of back-pain patients improve or become completely pain-free.

McKenzie made what Paul Schoemaker would call a "brilliant mistake" that eventually changed the course of back treatment in more than 27 countries worldwide.

I made a mistake of my own several years ago that transformed the direction of how I view health and wellness.

For most of the time that I've spent working in insurance and employee-benefits consulting, I've touted the paybacks of health, wellness and prevention. This belief is a natural extension of my background as a physiologist.

Many healthcare forecasters project that, if Americans simply ate better, exercised more, drank fewer alcoholic beverages and didn't smoke, we could reduce chronic disease and healthcare costs by 75 percent.
So, many of us -- myself included -- spent a lot of time speaking and writing about the potential impact of behavior change on healthcare costs in general and employer-related health and productivity costs specifically.

A few years ago, several employee-benefits-consulting groups took me -- and the insurance company for which I worked -- at our collective word. They proposed an arrangement whereby the benefits consultants would implement state-of-the-art health-management and wellness programs with selected employers in exchange for discounts from my company on short- and long-term disability insurance rates.

If you want to capture an insurance company's attention, ask them for a discount.

Before we agreed to the arrangement, we negotiated an actuarial exercise where we studied the impact of the proposed wellness programs on disability incidence. What we found was an enormous disappointment for all: The wellness programs had absolutely no impact on employee-disability incidence.

We had several theories as to why this was the case, but the one that held up the best was that, while employees could change their behaviors for a period of time, they couldn't sustain the changes long enough to impact the disability rates.

Our disappointment in the study's outcomes allowed us to move forward and test a separate hypothesis we had kicked around for about a decade.

Fortune magazine listed a number of our employer clients on the 100 Best Companies to Work For ranking every year. We knew from our research that many of these companies reported lower healthcare costs than those competitors that did not make the list. The theory we decided to test was that these top-ranked companies would also have lower disability incidence rates than similar companies we insured.

We first completed a cursory study of the companies of interest compared with our book of business. The results caught our attention. The Fortune-selected employers exhibited disability rates that were 50-percent lower than our book of business. The actuaries had never seen a result like this.

Our second and third studies were more rigorous and the overall trend held up. The outcome was a decision that we could offer any employer that landed on the Fortune 100 list (that was not experience-rated) a 10-percent discount on their disability rates.

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Several of the key people involved in this research left the company not long after the initial three studies ended, so we never were able to finish our work. But all of us believed our mistake in overvaluing the potential impact of wellness programs on employee disability and absence rates led us to a larger realization. Employee satisfaction -- what some label as happiness -- had a statistically significant impact on employee absence.

The Great Place to Work Institute, the consulting company behind the Fortune 100 list, defines a great workplace as one in which employees trust the people they work for, have pride in the work they do, and enjoy the people they work with. The Institute also lays out how relationships between employees and managers play out in five dimensions: credibility, respect, fairness, pride and camaraderie.

My belief that came out of my "brilliant mistake" is that, if HR executives invested more time in the classic principles of good HR leadership, companies could potentially have a greater impact on employee health and productivity than they could implementing any wellness program.

I was reminded of my theory recently when I read an April 2013 New York Times article on workforce science, or what is more commonly known as "big data meets HR."

One of the key points that jumped out at me was this: ". . . the communication skills and personal warmth of an employee's supervisor are often crucial in determining the employee's tenure and performance," the writer reported.

"In fact, recent research shows that the quality of the supervisor may be more important than the experience and individual attributes of the workers themselves," the article states.

Is employee satisfaction that results from a worker's relationship with his or her supervisor one of the holy grails behind employee health and performance? And, if HR leaders could improve this variable, would the results outperform health, wellness and prevention programs?

My experience tells me yes.  Which is why, in the spirit of Robin McKenzie, I encourage you to "carry on" with this work.

Carol Harnett is a widely respected consultant, speaker, writer and trendspotter in the fields of employee benefits, health and productivity management, health and performance innovation, and value-based health. Follow her on Twitter via @carolharnett and on her video blog, The Work.Love.Play.Daily.


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