How social determinants of health affect your employee benefit program

Low employee participation rates in preventive health care programs, such as fitness programs, employee assistance programs, smoking cessation programs and preventive cancer screenings, results in significant costs to employers. This leads to higher absence rates and reduced employee performance because of decreased well-being.

Many employees don’t participate in these programs even though they are in their best interest. So what’s stopping them and how can employers design benefit programs to change this trend and improve their employees’ overall well-being?

In a recent research review I completed with Emily Stiehl, Clinical Assistant Professor in Health Policy and Administration at University of Illinois at Chicago, we concluded that social determinants of health, centering on socioeconomic status, are significant factors in employee engagement rates in health-related benefits.

Employers—and their employees—will benefit from benefits programs and tactics tailored to address social determinants of health that may affect their employees.

Related: How do social factors affect health?

According to some public health researchers, social determinants of health account for as much as 40 percent of an individual’s health status. Despite social determinants being discussed in public health conversations for many years, their role in the workplace has not been broadly recognized, and therefore, are often not considered when employers design benefits programs.

Defining employee health

Many factors—or determinants—contribute to an individual’s health, including biology and genetics, lifestyle behaviors, social and physical (external) environments, and availability of and access to health services. While lifestyle behaviors are important, a recent estimate indicates they only contribute to approximately 30 percent of an individual’s health status; social circumstances contribute 40 percent, environment contributes 10 percent, and medical care 20 percent.

If employers truly want to improve their employees’ well-being, they need to give all these factors proper attention.

Related: 4 factors driving consumers’ shifting perception of health

Let’s take a closer look at social determinants of health. The World Health Organization defines them as ‘‘the complex, integrated, and overlapping social structures and economic systems that are responsible for most health inequities.’’ Based on published analyses, three primary social determinants of health are income, education and occupation, all of which are interrelated in a decidedly complex manner.

Income is directly linked to the individual’s material resources, which can affect a range of factors that contribute to health outcomes, including aspects of the physical/home environment, dietary habits, lifestyle behaviors, financial well-being and mental health. Education can have an important impact on financial and medical literacy, as well as employment options. And because employment is an important factor for shaping social position, contributing to income, and providing access to healthcare, it is a foundational contributor to social determinants of health, especially since many adults spend a large portion of their time at work.

Employer benefit strategy: The missing pieces

Yet despite this, in the United States, efforts to address workforce health and rising healthcare costs have historically been directed toward the economics of healthcare services delivery, with less attention paid to the value of social services expenditures, much less workplaces as determinants of health. In the past decade, however, the recognition that higher healthcare expenditures have not yielded better health outcomes has shifted the focus toward an increased interest in employees’ social environments and the impact these have on their health, and how they can improve well-being.

By considering social determinants of health when designing benefits programs, companies can more comprehensively and effectively address a diverse population’s health needs—and ultimately, the value of their workforces’ human capital, including knowledge, skills, abilities, motivation and creativity. Indeed, there is growing recognition in research and in practice that investing in well-being programs can benefit employers in terms of business, and employees in terms of overall life satisfaction.

Social determinants for low-wage workers

Recent economic analyses have highlighted increasing wealth disparities among U.S. adults, including those in the workforce. During the past two decades, annual salary increases for low-wage workers have been the lowest of all wage groups. At the same time, the proportion of low-wage workers in the workforce is increasing.

According to 2016 census data, 28.8 percent of adult civilian workers with employer-sponsored health insurance earn less than $30,000 per year, with an additional 13.8 percent earning between $30,001 and $40,000 per year. Employee wage level is associated with health status, with low-wage workers generally experiencing poorer health outcomes.

Compounding the issues for low-wage workers, the overall percentage of firms offering health insurance coverage has declined during the past 10 years, particularly among smaller employers and those with many lower-wage workers. The confluence of structural changes, including continued healthcare cost growth in excess of inflation, wage stagnation among lower-wage earners and increasing employer adoption of higher deductible health plans have created significant financial pressures for low-income earners.

As a result, these individuals may be challenged to allocate scarce financial resources between basic necessities (food and housing) and medical care. Low-wage earners may also be less likely to enroll in employer-sponsored health benefits because of competing financial priorities. And recent analyses of treatment compliance have provided clear evidence that lower-income earners are more likely to forgo or delay necessary care than their higher-earning counterparts.

And yet, despite efforts by some employers to make health benefits more equitable for lower-wage workers through employer-provided wage-based insurance subsidies, most companies have been largely unaware of the influence of socioeconomic status on health benefits utilization and health outcomes. Indeed, more than 95 percent of employers continue to embrace consistent benefits design and cost options for employees and family members, regardless of wage group.

Provision of wage-based health insurance subsidies and other measures designed specifically for low-wage workers must be given priority if employers are to improve the well-being of their employee base.

Looking at overall well-being

Interest in well-being as a more holistic view of individual health status has prompted some employers to expand their scope of benefits offerings to include financial literacy, resilience and career advancement programs. These initiatives provide some evidence of employer awareness of the implications of social determinants of health for workforce well-being.

But the current employer well-being framework of health, wealth and career still falls short in addressing employee social determinants of health concerns.

For instance, programs designed to encourage financial literacy may not improve financial well-being if the employees receiving the training do not also earn enough to improve their financial situation or have opportunities for career advancement. Low-income earners may also be exposed to income risks due to just-in-time work scheduling, uncertain job security and emotional stress due to the demands of their work, and may also not have access to paid sick leave. As a result, employers may want to broaden their view of well-being to encompass other considerations.

Incorporating social determinants into employer strategies

So, what steps can employers take to reframe their benefits offerings with social determinants of health in mind? With respect to the workplace as a unique determinant of health, review of organizational policies and practices, determinants of workplace culture, compensation framework, and employee perceptions can inform strategies to promote a more worker-friendly and supportive workplace environment.

Such an evidence-based approach would help to address unique employee needs, rather than provide a ‘‘one-size-fits-all’’ benefits offering, with the seemingly naïve hope that most employees will engage. By so doing, employers will appreciate more meaningful and lasting healthcare cost containment, as public health researchers have shown that comparatively small expenditures to address social determinants of health priorities can lead to significant reductions in overall healthcare costs. Given the health disparities that exist among income groups, specifically targeting low-wage workers’ health could yield even greater results.

As an illustrative example, some employers have recognized that healthcare costs can eat up as much as 20 percent or more of a low-wage worker’s income. These employers have provided financial subsidies in the form of premium or other subsidies for these individuals to make healthcare more affordable.

Where is the best place for employers to start? At an operational level, employers interested in expanding the impact of well-being initiatives can survey employees regarding perceptions of work in relation to social determinants of health. This process can help identify workplace practices, policies or culture that are a detriment to employee well-being. Too often, as benefits professionals, we tend to design benefits for people like ourselves, and risk losing sight of what may be important to others.

With these insights, employers can then work to address identified workplace social determinants of health concerns in addition to implementing employee behavior change programs. For instance, organizations wanting to implement healthy eating campaigns could similarly assess the availability and affordability of healthy food options at work. These efforts can extend to communities where employees live. There, employers can support healthy environment initiatives that target community-based social determinants of health priorities. In this way, attention to social determinants of health effectively extends to incorporate corporate social responsibility considerations.

As more research creates a growing knowledge base of insight into the association of social determinants of health with key human resources indicators, refinements in measures of these social determinants can then be implemented. I believe that workforce social determinants of health measures can also be evaluated in relation to business performance, including work quality, safety, efficiency and customer satisfaction.

Insights from these data can ultimately be used to inform thoughtful review of employer policies and practices that can both improve employee well-being and pay dividends to the employer that benefits from a healthier workforce.

Read more: 

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• Is sacrificing health care equality necessary for progress?
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Bruce Sherman is medical director, population health management at Conduent.