With health care dominating the national conversation in 2013, it would be easy to view cost reform as a top-down proposition mandated by the federal government and forced on a reluctant market.

But in Middle Tennessee, companies were working on bending the cost curve long before Obamacare grabbed headlines.

Call them wellness programs on steroids, but innovative new corporate health strategies being pioneered here are more comprehensive and personalized than ever before – and could reshape the health care industry while yielding dramatic cost savings for employers.

That’s what happened for Calsonic Kansei, an auto parts manufacturer with three plants in Middle Tennessee.

The company reduced employee health costs by 10 percent between 2011 and 2012, a time when most employers saw double-digit increases.

The company expects to continue its savings over subsequent years.

Calsonic did it by implementing a health management program designed by Murfreesboro startup Employer Advantage Health Care Solutions.

The program puts high-quality physicians at the worksite, with the focus on keeping high-cost, at-risk workers healthy through active engagement.

“Ultimately, we believe that improved care management coordination at the primary care level is what’s going to make the biggest impact,” says Jed Constantz, chief operating officer of Employer Advantage.

“The point we make is that wellness programming belongs in a clinically valid environment such as the primary care practice – instead of the HR department.”

It was a change of thinking that Calsonic, which has plants in Smyrna, Lewisburg and Shelbyville, was willing to make.

Calsonic is the largest supplier of automotive components to Nissan in the U.S. In September, company officials announced plans to invest $109 million and create 1,200 new jobs in Middle Tennessee by December 2015.

Employee buy-in

The company had managed to hold its health care costs flat during the previous six years through a combination of strategies that included tweaking health plan designs, shifting more costs to workers through higher out-of-pocket expenses and establishing on-site clinics and pharmacies at its plants where workers could receive medical care.

But those strategies can only go so far. Enter Employer Advantage.

The first step was getting Calsonic employees to take a health and behavior assessment that identified more than 700 “at risk” employees – those with chronic conditions such as high blood pressure, diabetes and pre-diabetes.

That strategy is based on the principle, supported by insurance claims history, that 12 to 20 percent of covered members (employees and covered family members) account for 80 to 85 percent of a business’ health care costs, with much of that money going to hospitals.

By identifying the highest-risk employees, primary-care physicians can intervene to help them manage illnesses that, left untreated, could escalate into acute episodes and expensive trips to the emergency room.

The Employer Advantage program is based around a patient-centered medical home (PCMH) model that gives primary care physicians responsibility for coordinating and monitoring a patient’s health.

Constantz

It is a “high-touch” concept in medicine that is at the heart of federal health care reform and is being used to transform care and physician payment models for all patient populations including those covered by Medicare and Medicaid programs as well as the commercially insured.

Four ‘pillars’ of health

Primary-care doctors who remake their practices into medical homes typically receive an additional payment per member, per month to compensate for the additional work, and often receive bonus payments for quality services based on measures such as improved patient health, outcomes and satisfaction.

Likewise, the Employer Advantage concept identifies and contracts with primary care physicians who rank high for both quality care and value provided. The practice establishes offices on or near the employer campus to coordinate care for the employee population.

Programming is built around four pillars – stress, diet, exercise and sleep – that contribute to an employee’s holistic health picture.

Changes in those metrics are measured for the employee population as a whole, with individual information protected in accordance with federal privacy laws.

“You have to have an employer with the correct mindset,” Constantz says of Calsonic’s willingness to innovate.

“It’s exciting that we’re on the cusp of something that could prove to be important in this whole conversation, and make communities more affordable for businesses to set up shop in. It has a larger opportunity to lower the cost of employing people.”

Calsonic employees who participate in the program and get their care from the favored physicians pay no deductibles or co-pays. Those who choose to use a different provider aren’t penalized but utilize the regular insurance plan administered by Cigna.

Recruitment and retention

Along with reducing costs for both the company and employees, the program has enhanced Calsonic’s business in other ways, says Bob Masteller, vice president for human resources and legal for Calsonic.

“The strategy of the (company’s) benefit plan is to have a top-tier benefit plan,” he says. “This strategy has enhanced our ability to recruit and retain high quality team members.”

The Employer Advantage model is based on a program developed in 2006 for Cornell University, the largest employer in Ithaca, New York, with about 10,000 full- and part-time faculty and staff.

Constantz, who was working for Cayuga Medical Center at the time, recalls being approached by Cornell’s benefits director, who told him spending on benefits was out of control.

Constantz worked with Cornell’s insurance carrier, Aetna, to develop a network of high-value medical care providers and a wellness program called the Cornell Program for Healthy Living, a data-driven, primary care physician-focused customized benefit plan design that engages employees and their families through an initial risk assessment tool that helps them set health improvement goals with their physician.

Cornell employees who enroll in the program cost the university about $1,500 less per year than those who do not.

“The business model has application all across the country,” says Constantz, who has also helped develop more cost-effective care management systems for the Medicaid population.

“You have to have a right-minded employer and the right type of primary care capability that genuinely wants to be held accountable for delivering on the triple aim for a defined population of patients.”

Major employers get in act

Dileo

While wellness programs aren’t new, federal regulations that went into effect Jan. 1 might encourage more employers to implement them by increasing the allowable value of the rewards businesses may offer employees for adhering to health-contingent wellness programs.

Such programs require employees to meet a health-related standard to receive a reward, either by engaging in an activity or achieving a desired outcome such as quitting tobacco or lowering body mass.

Wellness programming is already a major feature of the benefits packages at many large companies, such as Franklin-based Nissan North America, which has about 6,000 employees, and Gaylord Opryland Resort & Convention Center, which has about 4,500 employees it calls “STARS.”

Gaylord’s on-site medical clinic is the “crown jewel” of the company’s multi-faceted approach to wellness, says Theresa DiLeo, director of human resources for Gaylord Opryland and Attractions.

“The whole objective of wellness is preventative,” Dileo says. “It’s convenience, but it’s also preventative so people don’t get into a situation where they find themselves in an advanced disease state or taking ongoing medication.”

Gaylord’s plan gets high marks

The Gaylord clinic opened in March 2012 and provides urgent care, primary care and preventive care such as flu shots and yearly exams for employees and their dependents and guests.

An onsite pharmacy dispenses common drugs. Employees and their dependents may use the clinic with no out-of-pocket expense.

It is staffed by nurse practitioners and medical assistants from Vanderbilt University Medical Center and operated by Vanderbilt Corporate Health Services.

Gaylord also offers periodic health-focused days, free blood pressure checks, smoking cessation programs, support groups, workout group, a running club, sports clubs, a 24-hour gym, a cafeteria with healthy food choices and, this year, Weight Watchers.

Going beyond physical health, the employee assistance program can even help STARS work through personal financial issues, a major cause of stress and anxiety.

Gaylord’s generous benefits package gives it high marks among employees and favorable reviews on company-ranking sites such as Glassdoor.com and The Vault.

“We believe that happy, healthy STARS translates to great quality service for our guests, and that means greater profitability. It’s really a great business model,” Dileo says.

“Every business owner knows the cost of turnover is astronomical, when you think of the cost of recruiting, hiring and training. We more than recoup that with our high retention rate.”

Wellness as investment

More businesses are starting to see the link between their bottom line and all factors that affect employees’ ability to perform, according to Franklin-based Healthways, a health management company which champions a holistic, multi-faceted approach to employee benefits.

“Our business is evolving from a wellness platform to well-being – not just defined as physical health, but the intersection of physical, social and emotional health for an individual,” says Janet Calhoun, senior vice president for strategy, innovations and solutions at Healthways.

“The program starts with the recognition that this is really a business performance investment, not a health benefit cost. Wellness focuses on just the hard medical claims space. Employers need to get the most out of their employees, and you do that by helping them with all elements of their life that intersect with each other.”

When employers add on the Healthways program to their benefit package, it starts with an initial assessment of five aspects of well- being: physical, social, emotional, community and purpose. Then, personalized individual programming is offered.

“If someone is worried about losing their job or not having enough money for the mortgage, they don’t want to have a conversation about exercising. They’re not exercising because they’re stressed out about other things,” Calhoun notes.

The company has partnered with leading names such as Dave Ramsey on financial programs, Blue Zones author Dan Buettner on programs related to longevity and happiness, and Dr. Dean Ornish on chronic disease and lifestyle management.

“We’re bringing to the market a platform that addresses populations holistically on all sides of those well-being elements,” Calhoun says.

“We have demonstrated the relationship of improved well-being to reduced absenteeism, people showing up and being more present at work and certainly lower health care dollars as well.”

The reception from employers has been “very positive,” she says.

Blue Cross Blue Shield of Tennessee, which offers wellness plans that augment and support its commercial health insurance plans, says employers want to encourage workers to take more ownership of their health.

Kasie Plekkenpol, director of new product strategy for the insurer, Tennessee’s largest, says employers are looking to move beyond basic incentives such as gift cards to more outcomes-based incentives such as reduced premiums and deductibles for achieving and maintaining good health metrics, says

“Premium differentials are the top request,” she says. “It’s a great way to put teeth in the program and have individuals be more responsible for acting on their health, and that can help pay for health management programs employers put into place.”

While the Affordable Care Act allows for premium differentials - discounts or surcharges - for those who do not meet certain health standards, legal experts writing for the American Cancer Society’s advocacy group have called into question the privacy of health information obtained from health-risk assessments.

Information collected by insurance companies is subject to HIPAA rules; if collected by employers or disease management companies it may not be. They also say such differentials based on wellness could also provide a loophole whereby employers can discriminate against the unhealthy by making insurance unaffordable for those with poor health status, and subsidizing discounts for the healthy with the cost savings, according to Sabrina Corlette, writing for the American Cancer Society’s Cancer Action Network.

Aligning incentives

With hard data and impressive results to report from Calsonic, its first client, the Employer Advantage approach is getting attention.

New clients in several states including municipalities, private employers and institutions of higher learning have signed on to implement the program this year.

“We’re still a startup,” Constantz says. “The work we accomplished at Cornell and Calsonic is why we’re getting this reaction from folks.”

Constantz credits Employer Advantage’s success with addressing fundamental flaws in the health care system that, ideally, the federal reform act is supposed to address.

Essentially, it boils down to pay for volume of service versus pay for quality of service.

“Hospitals are stuck in Medicare medicine – the sicker they are, the more they get paid,” he says. “Insurance companies benefit from higher premiums. And there’s no entrepreneurial spirit in the primary care practices.”

Over the long term, he says there is a larger opportunity to lower the cost of employment for businesses while improving employees’ health. And with employer money at stake, why it happens may be less important than how.

Constantz says Employer Advantage is about to start negotiations with a New York-based firm that represents equity-based companies.

“They need to maximize the value of the companies they own and want to use this strategy to reduce the cost of employing people and make them more profitable. If it results in improved population health, so be it,” Constantz says.

“We align everyone’s incentives.”