Where Do We Go From Here? Improving Value and Pricing in EAP.

Author:Sharar, David A.
Position:Cover story
 
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Foreword

One of the key expectations of purchasers and providers of EA services is that those services will be high quality in design and implementation, comprehensive in delivery, and performed at a reasonable cost. Moreover, purchasers and providers expect that these services will be easily accessed by the user, and there are both stated and implied benefits for all parties involved.

Most of the field has been working without common definitions of what constitutes quality, comprehensive services, easy accessibility, or reasonable cost.

The missing link that can promote our field lies in measuring the outcomes of EA services. We concretely need to demonstrate the results of our efforts. If results are not measured, they are merely impressions or opinions.

If impressions or opinions are the basis for EA business, then we subject ourselves to the whims of the marketplace, and the latest cost pressures from benefits consultants. We cede control of the EA narrative to others when we fail to measure our own effectiveness.

We have a fundamental challenge in the EA business: pricing for EA service delivery is low (for many reasons); yet we have a tough sell because we don t establish the value of our services in ways that are tangible. The value of EA services (and our future) is absolutely linked to the ability to measure the outcomes of our activity.

The following article by longtime EA colleague David A. Sharar, PhD, is simultaneously infuriating (how did we get to this point?) and invigorating (there is a path forward). Let's collectively read, absorb, react, discuss, and do what we do so well in the EA profession: intervene, assess, and move to resolve problems. In this case--our own.

Gregory P. DeLapp. MHS, CEAP

CEO--EAPA

Why are many EAP practitioners reluctant to change when change is crucial to the survival of our profession? But my intent in writing this article is not to be negative or overly critical, but rather to realistically and truthfully confront the current state of the employee assistance profession. Rather than just addressing our problems, I will also propose solutions later in this article.

PEPM Rates

Per-employee-per-month (PEPM) rates for Employee Assistance and Work-Life have significantly decreased over the past three decades. The once standard internal EAP--where EA staff are full or part-time employees of the employer sponsoring the EAP service --has largely been replaced by external programs or outsourced vendors (Frey, Pompe, Sharar, Imboden, and Bloom, 2018). Many longstanding internal programs have been downsized or eliminated in favor of cheaper external providers.

The continued push for vendor consolidation (acquisitions & mergers) has moved the field towards "product parity". In other words, external EA vendors tend to look similar in terms of program features and services.

This makes it difficult for EA service providers to differentiate their services from the features and offerings of competitors. Price increases are generally viewed by EA vendors as significant threats to contract retention and by employer customers as expenses to be suppressed or avoided.

Marginal service providers typically receive about the same rate as "optimal" ones due to the "invisible" nature of the way EAP cases are handled and managed. Service quality is highly variable and some EAP clients receive optimal care but many do not.

We lack common definitions and agreed upon markers of success so that buyers can accurately compare vendors and program models using the same "yardstick". As a field, our approach to metrics and measurement tends to be blunt, simplistic, and even at times exaggerated or distorted.

Many employers don't know a good performance measure from a bad one. Unlike the early days of EAP, there now seems to be a high degree of apathy and lack of senior management engagement in selecting and supporting EA vendors.

Decision-making around EA purchases, particularly for large employers, has migrated to purchasing departments and benefit consultants who frequently consider buying decisions from the myopic perspective of low cost. Trying to penetrate a different center of buying influence in today's workplace benefits labyrinth is filled with constraints.

"Free" EAPs

Buyers of workplace services are generally incentivized to drive down price and reduce higher level value propositions to the lowest common denominator. There is even a clear trend for certain insurance and disability carriers to bundle EAP into their core insurance products and offer it for "free" (Sharar and Burke, 2009).

Of course the so-called "free" EAP is not really free, but the buried low price of the program allows the insurer to easily absorb the EAP expense into their overall plan fees. Put another way, the EAP is sold at or...

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