Good Measures

Evaluating the performance of an EAP is no easy task. But that's not stopping some employers from trying.

As a psychologist in a small town in Minnesota, Leeann Jorgensen has worked with her share of employee assistance programs. Some are great, she says, while others are pulling the wool over their clients' eyes.

"There are EAPs that are ethically and responsibly run; some are not," says Jorgensen of Psychological Resources. What disturbs Jorgensen is the number of EAP firms that promise services with providers they don't even have contracts with or offer programs that anyone could find in the local yellow pages.

"I don't mean to condemn EAPs," says Jorgensen. "I like EAPs (because they help companies) make better decisions about who they deal with."

As EAPs become a standard benefit with many U.S. companies, more and more firms are demanding certain guarantees from their EAP vendor to ensure they get what they pay for. And many EAP firms are now responding to client demands by including such guarantees and regular reviews in their contracts.

Specify Needs

EAPs emerged in the 1970s for a simple purpose--to control mental health insurance claims by providing a frontline evaluation.

Nowadays, EAP vendors go far beyond counseling referrals; they generally offer a wide array of services. Typical packages include: the traditional EAP, which covers mental health and drug and alcohol counseling and treatment; work/life balance programs, which addresses child care and elder care, as well as legal and financial questions; and concierge services, which can include referrals for services such as plumbing, dog walking or party planning. Other special services include critical care, managed behavioral health care, weliness programs and behavioral risk management to help prevent onsite violence.

Besides boosting morale and preventing lost work hours, EAPs have become an important recruitment and retention tool in a competitive job market. The number of employers with EAPs has doubled in the past few years, rising to 48 percent of companies with more than 100 workers. EAP enrollment has increased nearly 80 percent from 1994 to 1998, according to a survey by the U.S. Department of Labor.

"One of the things happening out there now is clients are asking for more information," says Mary Pigatti, director of product management with Ceridian Performance Partners, a major workplace effectiveness service with 6,300 EAP clients that is headquartered in Minneapolis. "The questions are very sophisticated. Clients are looking for customization and flexibility."

Client companies, Pigatti says, are increasingly asking up front for request for proposals, as well as information on utilization, outcomes, and the return on investment to the company. They are also requiring external performance audits.

In addition, many companies no longer want the package deal. Rather, they want to tailor contracts to meet their own culture and complement internal programs.

"Most (EAP providers) have boilerplate programs," stresses Richard A. Chaifetz, chairman and CEO of Chicago-based CoinPsych Corp., a leader in EAPs and workplace resources. "To get a unique program, make your expectations clear up front."

In some cases, companies want a large national EAP vendor that can provide consistent, one-stop programs for employees in all of their offices. Other businesses want an EAP for specific services to integrate with internal programs.

Minneapolis-based Cargill, one of the nation's largest privately held organizadons with 82,000 employees in 59 countries, had an internal EAP, but wanted to add an "outside component" to keep up with its global initiative, so it signed a contract with CoinPsych in May.

"Our company is so large and dispersed, it made better sense to deliver our service through a large national program, according to Keith Tvedten, EAP manager with Cargill, which markets, processes and distributes agricultural, financial and industrial products. "We had some local EAP contracts in various locations; they were decentralized. We wanted more continuity with one vendor."

When American International Group Inc., based in New York, signed on with CoinPsych four years ago, the company insisted on maintaining a hands-on approach to EAP services.

"Many companies really just hand it off to (the EAP). We work as a team," says Linda Bern, a clinician who administers AIG's internal Health Advisory Program. "We've put together our own potpourri. We've been specific. We chose not to do the one-stop shopping thing."

AIG, a leading insurance and financial services organization, had worked with another EAP for years, but switched after that firm was acquired by a larger company. "It couldn't accommodate the requests we had," says Bern. "We were looking for an organization that could hand tailor (our program)."

ComPsych was contracted to provide EAP and work/life services for all employees outside of New York, which is covered by headquarters' Health Advisory Program.

All of the referrals from managers that relate to job performance go through Bern's office before ComPsych is contacted. "Because I work for AIG, I have a good understanding of our culture," Bern explains. "Our managers feel more comfortable talking to me. When we determined what services we were looking for, we needed an organization that would partner with us."

Are Providers in Place?

Psychological Resources' Jorgensen advises employers to make sure that their EAP really does have agreements in place with providers, so it can promptly deliver when the emergency arises.

As a therapist, Jorgensen has an insider's view of what goes on when the call comes for help. "Here's a true example," she says. "An [EAP] company told an agency in town it would provide help with extended family care. (But when a request was made), the EAP called me."

"If the EAP doesn't have a contact ahead of time, it's really not available," says Jorgensen. "When the request from the company comes, they scramble around ... then they try to brush you off."

Jorgensen has reviewed a number of EAP contracts and suggests that companies check out the following promises:

* Providers will be available 24 hours a day, with an appointment available within six hours of the emergency, all at a 25 percent reduction of fee.

If the EAP makes this kind of sweeping promise, find out specifically what organization offers the service and how the EAP pays for it. It's doubtful they have signed agreements, since it's very expensive to keep someone on call 24 hours a day.

"Can you imagine a car dealer responding to this request?" Jorgensen asks. "Say I might want to buy a car, would you hold one for me in case I want it, and then I would like a 25 percent discount if I should choose to get it, and I want it available the day after I order it?"

* Offering a single counseling session. Find out what is provided and if a diagnosis is made. It is unreasonable to have the therapist counsel a client and make a diagnosis in only one session. Most of the time would probably be taken up with paperwork alone.

* Offering services that are already available in the community. EAPs should by definition do more than provide names and referrals. Their job is to assure that providers are licensed and match the clients' needs. They should also ensure that the contact was successfully made and appropriate follow up was offered.

Measuring Utilization

One of the first steps before signing an EAP contract is to set detailed performance standards and arrange to review them with the provider on an ongoing basis, reports Linda Panszczyk, an attorney and senior benefits analyst with CCH Inc., a national resource on business and employment law based in Riverwoods, Ill.

"As is true with any benefit, a long-term relationship is ideal," says Panszczyk, who recommends that companies work out problems with their vendor instead of switching to another one. "If the performance standard isn't met, alert the vendor and get important measures taken."

The primary measure is utilization. Get a guarantee of utilization up front and use it as a gauge of effectiveness, says ComPsych's Chaifetz, who insists that utilization is the responsibility of the EAP vendor.

"We believe it's our responsibility to run (the EAP) effectively," says Chaifetz. "What frequently happens with companies taking advantage of employees is they sell them a contract and utilization is anemic, 1 percent or less."

Other performance indices may include quality of service based on user feedback, response time for crisis services and response to claims.

"We frequently put the vendor under guarantee to refund their money if we don't meet those indices," says Chaifetz. "We take full ownership of the program. It's our responsibility to make the program work."

"There is a utilization percentage we expect the vendor to meet," confirmed Tvedten, with ComPsych client Cargill. "If it doesn't hit the target--an estimated 10 percent--we would withhold some fees."

Utilization is generally measured against a national norm. "Quite frankly, our utilization is higher than the national norm," says Larry Cunningham, vice president of human resources for Centocor, a biopharmaceutical company based in Narberth, Pa. "We don't view that as a bad thing ... due to the fact we emphasize (the EAP is) there." Horizon Behavioral Services provides the program for 1,350 Centocor employees in the United States.

Cunningham suggests that utilization at Centocor is high because its staff mostly consists of highly educated employees who tend to use these services.

Centocor reviews the EAP contract each year and measures utilization quarterly. "We focus on the value to the employee," Cunningham says. "We think it's a good value in the total scheme. It's a very small cost. People talk about managed care and HMOs, but this is true preventive medicine. It's definitely at the beginning of the food chain in terms of prevention and health awareness."

Return on investment is also an important measure of effectiveness. Ceridian, which provides a quarterly utilization report, has developed an ROI Calculator software tool that evaluates services according to five categories: time saved, productivity, absenteeism, retention, health and disability.

User Satisfaction

Anyone involved with an EAP will tell you that it is hard to evaluate the quality of services because of client confidentiality. But that doesn't mean user satisfaction can be ignored.

Be wary, says Jorgensen, if an EAP says usage information is off limits because of confidentiality. EAP vendors have a number of ways to evaluate client satisfaction, from statistically significant user surveys, to follow-up calls by phone or survey cards.

For example, Ceridian asks all employees who use a service if they would participate in a survey to rank the quality of service. "How do they feel it's impacted them personally?" asks Pigatti. "Was it helpful? Was it valuable? Were they less likely to lose work time, less stressed? Would they use it again?"

Nationwide, EAPs and work/life service providers appear to be doing their job, and keeping clients satisfied.

"Despite the costs, EAPs normally save money in the long run," reports the "2000 U.S. Master Employee Benefits Guide," published by CCH.

"In fact, one consultant at Price-waterhouse-Coopers estimates that EAPs have shown a payback of between $4 and $7 for each dollar invested. What's more, unlike other types of benefits such as health insurance, high participation is a sign of a successful program and results in a greater return on investment to the employer."

On a more subjective level, one New Jersey-based benefits consultant reports that her clients seem pleased with their EAPs. "Most of my clients are happy with the results," says Harriet Hankin, president of the CGI Consulting Group Inc. in Cherry Hill.

"When they do a cost/benefit analysis, they don't find it terribly expensive," she reports. "I don't hear a hue and cry, 'Why are we spending this money?'"

Evaluating Your EAP

The "2000 U.S. Master Employee Benefits Guide," published by CCH Inc. In Riverwoods, Ill., suggests that employers ask far the following when evaluating an EAP:

* The number of calls or visits;

* The nature of the calls (i.e., the type of problem);

* The recommendation for care;

* The amount of time spent with each individual;

* The time of day of the call or visit;

* The follow-up with the individual or supervisor who refers the employee;

* What price differentials exist that influence the decision.

Also, though cost savings are difficult to measure, companies might want to consider performing before and after reviews of the following:

* The number of lost workdays;

* Number of accidents and errors;

* Morale and productivity;

* The number and amount of health care insurance claims.

COPYRIGHT 2000 Axon Group
COPYRIGHT 2001 Gale Group