Employee Assistance Program Providers

Special Report: EAPs: Devoid of Data

Employee assistance programs continue to improve quality and services, but while employers are looking for bottom-line data, EAP providers lack research.

June 5, 2014

Employee assistance programs have been popular among employers for several decades, but as more employers demand data to demonstrate how their benefit plans affect their bottom line, the industry is struggling to become a key player in workplace health by funding more independent research.

Experts say that the lack of data on how EAPs can reduce health care costs and increase productivity is undermining the credibility of the industry and making it harder for organizations to shop for an EAP provider. As a result, industry leaders are looking to create benchmarks to help buyers make more informed decisions, mirroring the larger trend toward evidence-based health care.

'Companies realize that they need a more integrated approach, but EAPs have to start justifying the need for their services.'

—Mark Attridge, a social psychologist

Without solid research on the value of EAPs, the deciding factor for employers shopping for a provider is price, not quality, according to Carl Tisone, president of the Employee Assistance Research Foundation, a nonprofit EAP research organization based in Arlington, Virginia.

Hot List June 2014“Purchasers have very few things to look at when choosing an EAP,” he said. “My concern is that employers are paying less and getting less and that means lower productivity in the workplace. We need hard data. All the advances in medicine have taken place after very thorough research, publications and peer review. The EAP industry has never had anything like that.”

Tisone hopes that the Employee Assistance Research Foundation, which was founded in 2011, will help fill that void. Last November, the National Behavioral Consortium, a nonprofit trade association for EAPs and managed behavioral health organizations, released the first independent study of EAPs funded by the foundation. Using comparative data from 82 vendors, the study examines the characteristics that define an EAP, common business practices and measurement strategies. What emerges is how much the industry has changed since the first programs were launched more than 60 years ago to deal with alcohol-related problems.

Many people associate EAPs with a 1-800 number that few employees call, but these programs now include personalized counseling, case management services that track an employee’s progress and organizational programs like training seminars and crisis intervention. EAPs have moved beyond child-care referrals to helping employees deal with more complex problems like drug abuse, depression and debt, reflecting in part the impact of a tough economy. About three-fourths offer these kinds of services, according to the National Behavioral Consortium study, and about half offer wellness counseling.

“Companies realize that they need a more integrated approach, but EAPs have to start justifying the need for their services,” said Mark Attridge, a social psychologist and workplace health expert who co-authored the study. EAPs “get to play in the big leagues more often, but to do that you have to be seen as a legitimate player.”

While only 10 percent of the companies surveyed tap the organizational services offered by EAPs, this is the area poised for the greatest growth, but it’s also the hardest sell, Attridge said. 

“This goes beyond serving the individual to serving the whole organization as a partner,” he said. “It’s working with the benefits department, with wellness, with disease management. But companies don’t want to pay for that. Evidence and best practices from big companies that have super data sets show that the integrated EAP model is dramatically better. The question is how do you manage it and how do you pay for it?”

This is where data and independent research can help vendors make their business case.

“It shows what people actually do as opposed to what they say they are doing,” Attridge said. “The rest of the employee benefits has a lot of data, too much data. Employers are taking health care much more seriously now because it affects productivity and that’s a mental health issue.”

Contrary View

Some providers like Richard Chaifetz, CEO of ComPsych Corp., one of the largest providers of employee assistance programs, disagrees that more research is needed to make the business case for the industry. The best indicator of value, he said, is the number of people who buy the service.

“I think it’s pretty clear that companies understand the importance of EAPs,” Chaifetz said. “I don’t buy the notion that we have to prove it. I think it’s important to show how to make programs more specific to meet specific needs, but the concept of having to prove our worth is archaic. The industry doesn’t grow to this size from niche to behemoth without having proven itself.”

Indeed, U.S. enrollment in EAPs has increased by 285 percent since 2002, according to a 2011 survey by Open Minds, a market research firm based in Gettysburg, Pennsylvania. More than 97 percent of companies with more than 5,000 employees have an EAP and continued growth is expected, according to the Employee Assistance Research Foundation.

Still, the industry faces several challenges, including marginalization after several leading EAPs were gobbled up in recent years in a series of mergers and acquisitions, according to David Sharar, managing director at Chestnut Global Partners, a Bloomington, Illinois, consulting firm that specializes in employee assistance programs.

'I don’t buy the notion that we have to prove it. I think it’s important to show how to make programs more specific to meet specific needs, but the concept of having to prove our worth is archaic'

—Richard Chaifetz, ComPsych Corp.

In 2009, insurance company Aetna Inc. bought Horizon Behavioral Services, which was one of the largest EAP providers in the country, and OptumHealth Inc., a health and wellness company owned by UnitedHealth Group, acquired PPC Worldwide.

Data Bank 1 June 2014Data Bank 2 June 2014“There’s been a tremendous number of mergers and acquisitions in the past decade,” said Sharar, who is also on the board of the research foundation. “Just like independent doctors got rolled up into health systems, EAPs have been acquired by managed care, by insurance companies and wellness benefits companies. Big insurance companies have big marketing engines and they have gotten really savvy. They’ll say, ‘If you buy our health insurance product, you can have the EAP for free.’ It marginalizes what they do.”

These “free EAP programs” typically provide a hot line for individual counseling and little else, he said. Utilization rates for these basic programs are low, about 1 percent, according to some studies.

The industry also faces challenges in addressing the needs of a generationally diverse workforce, according to Shami Sheikh, senior vice president at LifeWorks North America, which is part of human capital management firm Ceridian HCM Inc.

“We have to understand how to address the four-plus generations in the workplace,” Sheikh said. “You can’t favor one over the other. You’ve got a 20-year-old and a 60-year-old and people absorb information differently. One thing that’s incumbent upon us is delivering information in a way that can be consumed. People will look to us to improve engagement in the workplace overall and help establish a better culture.”

And as companies become more global, EAP providers must grow as well, he said.

“The United Kingdom has been very accepting of EAPs; so have other regions in Europe and in Asia, and that can drive growth,” he said.

But the biggest challenge facing the industry is providing data that demonstrates the impact that EAPs have on workplace productivity, engagement and health care costs and outcomes, the employee assistance research foundation’s Tisone said. Without that there is nothing to hold vendors accountable, he said.

“That’s the biggest challenge, and if that’s done the EAP industry will have a long and successful future,” he said. “If it’s not, the industry won’t die — there’s just too much anecdotal evidence that it provides a great benefit to employers — but the lack of data encourages providers to cut corners.”