While there's no shortage of competitors in its world, E4 Health, founded in 2011, is snapping up rivals, forming alliances and attracting venture capital.

In other words, it's taking an aggressive stance in a corner of the human resources field that doesn't often see gobs of innovation.

“Behavior is driving 75 percent of the health care costs in this country,” noted E4 CEO Bill Mulcahy. “Our vision for the company from the very beginning was to build a business that combined the short-term behavioral changes of EA with the long-term behavioral changes of wellness.

According to CrunchBase, a database that tracks financing among entrepreneurs and start-ups, E4 Health received a $3.5 million investment last year from Mansa Capital, a Boston-based private equity firm specializing in high-growth health care companies.

It also landed an undisclosed amount from Kinderhook Industries, a private equity firm headquartered in New York City.

The money has allowed E4 Health to make a few acquisitions including:

• St. Louis, Mo.-based People Resources Inc., a provider of EAPs, managed mental health services, and university student coaching and counseling services.
• Sobel & Raciti Associates, a Providence, R.I., work counseling practice.
• Wellness Corp., a Shrewsbury, Mass., firm specializing in EAPs and post-secondary education, counseling and coaching.
• Corporate Family Network, a New York City-based provider of EAPs and work-life services.

At the moment, Sheriff said, E4 Health has 85 full-time employees and a network of 17,000 clinicians in the U.S. and Canada.

The company has a physical presence, which E4 Health refers to as “centers of excellence,” in Dallas, Providence, New York City, St. Louis, and Shrewsbury, Mass.

“The overwhelming distribution of health care is delivered by 20 top brokers and consultants in the industry,” Mulcahy said in offering an explanation for the firm's rapid growth. “We know these people, and they're our distribution channel.

“Because of our background in the industry,” Sheriff said, “we also know the best and brightest clinicians, and that's allowed us to build a solid and extensive EA network.”

“We're trying to move the needle on health care costs,” Mulcahy said, “and while for the most part clients understand what we're trying to do, it's still a paradigm shift. We're saying to brokers and companies that you're missing the boat: you've got to manage employees' lifestyle choices; it's the primary driver of health care costs.”

Of course, some employers do get that. But it's still early days for this sort of thinking.

“I don't see too many EAPs with a wellness element right now,” said the director of HR at a large East Coast chemical supply company, “but more employers are beginning to want both parts, and EAPs are just now beginning to respond.”

The trend was, in fact, part of a presentation two years ago by benefits giant Aon/Hewitt. Citing a 2002 academic paper, Aon noted that among the study's 950 respondents, most felt there needed to be more “collaboration between EAP, work, life, and wellness programs.”

The study predicted that over the following 10 years “all three areas of services would be provided under one umbrella department.”

E4's growth is perhaps the result of early recognition of that trend and the ability to craft it into a viable business model.

E4, which stands for “evaluate,” “engage,” “empower,” and “effect,” offers clients—among them Jet Blue, Estee Lauder and Interpublic Group—the following programs:

• LifeScope is E4's employee assistance service. As with any EAP, employees whose personal or professional problems are affecting productivity or jeopardizing their job can be directed to credentialed coaches, counselors and consultants who can help with a host of problems—big and small, anything from addictions and financial or legal issues to bereavement and troubled teens or retirement planning. Employees of client firms have access to help 24/7, via telephone or online chat.
• LifeChoice adds the wellness component. Employees take a health assessment survey that reveals behaviors and chronic medical conditions that need to be addressed. Employees can create their own health management goals, track their progress, and create individualized incentive plans through a suite of cloud-based wellness software. LifeChoice also provides client employees with a host of educational seminars as well as counseling for emotional problems. Employers can assess their return on investment from the wellness program with E4 Health's ROI calculator and progress reports.
• LifeLync rounds out E4 Health's approach with a set of metrics dedicated to finding and managing treatment for workers with chronic health problems, often those employees responsible for most of a company's medical costs. The idea is to identify these people and then focus limited organizational resources on them to improve and manage both their physical health and the associated psychological issues that often increase company medical costs and affect productivity.

“Our programs build onto each other and work together,” said Sheriff, “but we believe the foundation of developing healthy habits is employee assistance. So if you buy LifeChoice or LifeLync, you also get LifeScope, the EA component.”

Sounds good, of course, but skeptics will wonder: does it really work?

The jury might still be out regarding wellness. But there's little doubt that EAPs help employers and their workers. To wit:

A 2004 study published in The Journal of Employee Assistance, “EAP Impact on Work, Relationship, and Health Outcomes,” tracked nearly 60,000 federal employees from 1999 to 2002, measuring the following factors: 1) productivity as affected by emotional health; 2) productivity as measured by physical health; 3) work and social relationships.

In each of the three categories, employees showed improvements after using EAP services.

In particular, dramatic gains were made among employees who said they had experienced difficulty in doing their job because of emotional problems. At the end of the study, “only 8 percent of clients reported this level of difficulty—a 73 percent reduction in the number of cases with low productivity due to mental health issues.”

Absenteeism and tardiness also went down significantly. At the conclusion of the research, respondents who used EAP services reported being late or absent from work an average of one day in the previous 30 days, compared with 2.37 days at the start of the study, a “62 percent drop in lost time away from work.”

Researchers calculated that among the 60,000 respondents in the study 87,140 whole or partial workdays were gained over the three-year period of inquiry.

It all adds up and trickles down to the bottom line.

For every dollar spent on EAP, notes the U.S. Department of Labor, there's a savings of $3 to $15.

Illustrations by Matthew Hollister