Journal of Employee Assistance Vol. 48 no. 2 - 2nd Quarter 2018

Feature Article
Project 95-Broadbrush: Lessons for Today – Part III

By Jim Wrich

In the final installment of a three-part series, we continue to show the evolution of employee assistance into the EAP of today. The entire series can be read here

Trouble Brewing in Paradise
The field of addictions treatment was coming under attack. Free-standing residential programs like Hazelden and the Caron Foundation (Chit Chat Farms) charged between $75 and $100 per day for treatment, or $2,000 to $3,000 for a 30-day stay. However, the hospital-based programs were charging about $250 per day and addictions treatment suddenly became a god-send for hospital administrators. The “Baby Boom” had been followed by a “Baby Bust” and hospitals all around the country had empty maternity wards.

An enterprising organization, Comp Care, stepped up to solve two problems: the increasing numbers of empty hospital beds and the insufficient numbers of alcoholism treatment services. They developed a “turn-key” addiction treatment program that they sold to hospitals for $65 per bed per month, including staffing, the treatment protocol, training, supplies, and profit. Within 3 months a hospital could have a fully operational addictions treatment program that might otherwise take a year or more to develop.

Equally important, they could sell a service that cost $65 a day for $250 to $300. And, because they were a hospital, insurance companies readily paid the tab while often denying reimbursement to the free-standing residential programs. 

As the commercial EAP industry developed, commercial addictions treatment chains also sprang up. In addition to Comp Care, companies such as Parkside Medical Services developed national chains of rehab programs using the Lutheran General program founded by Dr. Bradley in Park Ridge, Illinois. But these companies could not develop new treatment programs fast enough to dominate the industry so they bought up existing free-standing programs and by 1988 grew to more than 2,000 beds nationwide.

In the acquisition process layers of bureaucracy were added to what had been reasonably priced services, driving up the cost of care without necessarily adding value or improving outcomes. To their credit, some conducted outcome evaluations on their patients, but the results at $8,000 were about the same as Hazelden had found under Dan Anderson in the early 1970s. (This was before it had been accredited by JCHA and was charging only $28 per day.)

By the late 1980s, many larger employers had become self-insured, and the benefit managers who had become more directly responsible for containing costs were not happy with the price escalation. With very few reasonably priced free-standing programs still in existence after all the mergers and acquisitions, typical residential addiction treatment costs passed the $10,000 mark and a few soared over $30,000. Benefits managers rebelled. Today, many cost double that amount. In the meantime, residential recovery centers such as the Retreat in Wayzata, Minnesota, were getting comparable outcomes for $5,000 to $7,000.

For years overall health care costs had been increasing at 2 to 3 times the rate of inflation and represented an ever-increasing share of the Gross Domestic Product. In 1985, our firm began comparing health care costs to corporate profits and by 1988 the total net income of the Fortune 500 Industrials was eclipsed by their employee health care expenses. Many group insurance plans had only recently begun covering treatment of addictions and mental health and, with a baseline of near zero, quite naturally these claims increased at the fastest rate. They represented the low-hanging fruit for the cost cutters.

Benefit managers began to realize that health insurance companies had a vested interest in cost escalation because their administrative expense and profit margins were pegged as a percentage of claims. Many had already enlisted Health Maintenance Organizations (HMOs), which assumed the risk at a fixed, multi-year fee. But an HMO’s scope was limited to medical-surgical care, and unlike alcoholics or those suffering from depression, beneficiaries complained loudly when the service they needed was cut back. 

The New Treatment Boss
In the early 1990s a counterpart to medical HMOs came on the scene that carved out mental health and addiction treatment: the Managed Behavioral Health Organization (MBHO). MBHOs also accepted contracts at risk. Studying a company’s claims data, they calculated the total cost for mental health and addictions, agreed to a firm fixed priced contract at roughly 70%, and took over the assessment and treatment. With one of the most expensive components being the standard 30-day residential care for addictions, our own retrospective audits disclosed a non-random pattern of denial of treatment for alcoholism and drug addiction.

In one case, a large employer was on a path to spending 10% of its total employee health care costs, or $20 million, over the following two years for mental health and addictions treatment. The MBHO accepted a contract for $14 million and proceeded to spend a little over $5 million for actual care.
Virtually no one in a group of 50,000 was referred to residential or inpatient chemical dependency treatment. The outcry from the unions and employees led some employers to conduct audits, but most were satisfied to weather the storm of criticism and enjoy the short-term gains.

For a period of time, EAPs and MBHOs competed directly in the workplace, with the MBHO vetoing EAP referral decisions. But that ultimately went by the boards. In building their businesses, MBHOs accelerated growth by rapidly acquiring commercial EAPs, securing their customers, and upselling them managed behavioral health products at a much greater cost but with the promise of reducing overall mental health expenditures.

Two of the largest commercial EAP firms — Human Affairs International and PPC – were swallowed up along with several others. In justifying denial of care practices the MBHOs touted studies that purported to prove that outpatient care was as effective as residential care for addictions treatment. This wasn’t what the research of Hoffman and others showed, but it was welcome news to benefit managers and independent practitioners.

It was true that few alcoholics needed 30 days in an acute care hospital. More typically, at UAL we found that about 40% of participants suffering from addiction needed primary residential care. Unless there was a serious co-morbid physical or psychiatric issue, the free-standing programs were at least as effective and cost less than half as much.

Of the remaining 60%, intensive outpatient, small group therapy, one-to-one counseling, and sometimes just AA alone secured excellent outcomes, such as: 72% first-time recovery for ground employees; 84% for flight attendants; and better than 90% for pilots and senior management. These recovery rates were far above average and began by providing the right care the first time.
Beyond that, the intensity and length of the continuing recovery protocol and family involvement accounted for most of the difference in these outcome rates from the norm. Unfortunately, valid outcome data in the fields of both EAP and treatment began to shrink to nearly nothing as the MBHOs took over. The principal measurement was cost reduction, not recovery, and they certainly achieved that goal largely through denial of appropriate care as the percentage of health care costs represented by substance use disorders and mental health was cut by more than half. 

This Stuff Should be Easy, Too
Compounding the issue further was the Reagan Administration’s response to the growing concern about illegal drug use. At a political rally Nancy Reagan picked up on a placard held by a young school girl that proclaimed, “Just Say No!” When the Reagan Administration turned it into a national mantra to fight addiction, both the disease and its treatment were trivialized. It led many to wonder whether treatment was even necessary. The need for drug testing was also stressed.

The message was clear: “Use willpower to solve your alcohol or drug problem, and if you don’t our drug testing will weed you out.” Employers were in a bind: if an employee caused harm or injury in the workplace while under the influence of drugs, the absence of a drug-testing program could be used against the company in a liability suit. 

Not Only Easy, but it’s Gotta be Cheap
Staffing an EAP with Assessment and Referral (A and R) professionals who did face-to-face interviews represented a price to employers that generally ranged from $1.50 to $3.00 per employee per month, less than 1% of the cost of health care benefits at that time. At UAL the preponderance of our assessments were face-to-face but because about 10% of our employees worked in remote areas we also needed to conduct some assessments over the phone.

Our data showed that about three times as many telephone referrals came back to the program within a year for a different problem than was the case with the face-to-face participants, and a disproportionate number of these re-entries turned out to be chemically dependent. 

In the 1990s the “Telephone Model EAP” became popular. One large commercial EAP service built a major part of its business through acquisitions of local and regional EAP providers who conducted face-to-face interviews. After an acquisition, they went to the customers and offered to reduce the price by 50% to 70%, and then converted the A and R process to a phone model, which yielded much greater profits than the face-to-face model. Referrals for alcohol and drugs became rare.

But the ability to read body language – something that can only be done in person – is important in differentiating primary from secondary issues. Because addiction will seldom be the presenting issue, it can be difficult to recognize even when the person is sitting in front of the A and R professional. Over the phone, chances are diminished even more. However, when an HR manager was led to believe they could have something at $8 to $10 per year per employee instead of $20 to $30, it seemed like a no-brainer. Besides, no one was keeping score when it came to penetration and recovery rates.

And Here We Are
There has been an ebb and flow with EAPs over the years, and they did not all end up the same. Some still do outcomes, follow professional standards, and have good utilization rates for addiction. Some try to be “everything to everyone” and have lost sight of the purpose for which EAPs were established. Others offer little more than casual counseling for an array of issues that endear the staff to employees but do not tangibly address the tough issues people face, especially addictions.  

It would be easy to simply criticize these developments, especially the monetization of EAPs and treatment. But the truth is, the evolution of EAPs has been like any other movement with a mix of positive and negative results. Today, upwards of 200 million Americans have access to assistance through EAPs that didn’t exist when the “Thundering 100” first gathered in 1972. Millions have received help that they would not have had if not for an EAP. 

It is highly doubtful this could have happened by serially implementing in-house programs. While far more alcoholics and drug addicts could have been helped – and perhaps should have been had there been better training of staff and fewer compromises in program designs and objectives – the fact is that, all told the results have been significant.

What’s Next?
The current leaders in the EAP field, especially EAPA and EASNA, need to decide whether or not addiction is still important. If so, there are lessons to be learned and the following points might be considered:

* Until health education institutions, especially schools of medicine and social work, get serious about addiction, and include comprehensive instruction for their students in how to recognize the disorder and effectively refer patients for a professional assessment and treatment, late-stage identification will continue to be the norm and the personal and public costs will continue to mount unabated. 

* Until insurance companies acknowledge that effective recovery can be delivered by free-standing recovery programs at less than $7,000 for four weeks, and reimburse for it, treatment costs will continue to escalate beyond anyone’s ability to pay.

* Since few health professionals are ready made for Assessment and Referral positions, appropriate training is essential. If an A and R cannot distinguish between an early to middle stage alcoholic who shows signs of depression due to ingesting a depressant drug, and someone who is clinically depressed and just drinking too much, they cannot competently do the job. 

* Unless EAP practitioners are trained to effectively inquire about alcohol and drug use with every referral, assess addiction, bring it to the attention of the afflicted and their families, and refer them to the most appropriate care, the penetration rates for addiction will continue to languish at a level that makes a positive benefit to cost ratio nearly impossible.

* In moving the needle to improve a person’s life and safeguard the employer’s vested interest, industry standards need to be enforced by employers, audited by qualified representatives of either EASNA and/or EAPA, and an honest outcome evaluation system must be part of any EAP.

* The words of Dan Anderson many years ago still hold true: “You have to love alcoholics in order to work effectively with them.” Some EA professionals are capable of this love, but others are not. An honest self-assessment is required.

Addiction is more than just a code in the DSM. Today, as was the case in 1972, it is a killer that ruins lives, exacerbates a host of other health disorders, fills prison cells, and robs society of its greatest treasure – a fully realized human life. However, as millions of recovering people will attest, addiction can be successfully addressed.

An A and R position is more than just a job that offers a clinician a chance to work for an important employer instead of a non-profit social service agency. It is the heart of a life-saving workplace system that can be as lonely as it is rewarding.
An EAP is more than just another feel-good HR program. It is often the best hope an employee or family member has of breaking free from a life-destroying condition.
We need not regret the past nor shut the door on it. Conversely, neither does it help to exaggerate our achievements. As always, we need to honestly reflect on where we are, what we have done, who we are, and what will be required of us to do better going forward. Millions are still out there and they need us.

Jim Wrich is one of the pioneers of Employee Assistance Programs (EAPs) - one of the original Thundering 100 who launched the modern EAP movement through Project 95-Broadbrush. In 1972, Jim implemented some of the first EAPs in the country. An early member of ALMACA, (later the Employee Assistance Professionals Association,) he served as First Vice President and was the founding President of the Employee Assistance Society of North America (EASNA). Since 1987 he has managed his own firm, J. Wrich & Associates, LLC. (JWA), a health systems performance company, which provides a broad range of consulting and cost analysis services to businesses and unions.