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Pacific Gas & Electric

  • Headquarters

    San Francisco, CA

  • Number of Employees


  • Industry


Pacific Gas and Electric Company: Realizing the Power of Program Integration

Pacific Gas and Electric Company (PG&E) is similar to most utilities, with a workforce serving in a wide variety of roles. Call center representatives handle customer service interactions, engineers design safety features, field service representatives battle the weather and household pets, and linemen face dangerous, physically demanding conditions climbing poles to repair electric lines. Like most utilities, PG&E has an aging workforce with ever increasing chronic physical and mental health conditions.

This variety of roles creates unique and challenging circumstances for keeping utility industry employees fit, healthy, and safe at work. PG&E senior vice president of human resources John Simon realized several years ago that taking a traditional human resources approach to benefits and health-related programs would not position the company to meet those challenges. He set out in early 2010 to build an integrated health and productivity department at PG&E.

Promoting a Holistic Health Approach

At PG&E, this integrated approach includes much more than physical health. Health is viewed holistically, so key programs are integrated into the benefits approach to address mental and financial health concerns. For example, employee assistance program (EAP) services at PG&E are provided through a hybrid model, which includes internal program management, contracted counselors available on-site at certain locations, and a variety of behavioral health professionals available to all employees and family members through the Value Options behavioral health network. In an environment where employees frequently face high-risk situations, EAP staff are often brought in to help with critical incident debriefings, particularly following serious injuries or fatalities on the job. On-site EAP staff help build credibility with managers and union officials, leading to earlier identification of potential workplace issues. These on-site staff members have first-hand knowledge of the PG&E culture and organizational systems; therefore, their role extends beyond counseling to include management consultation regarding employee situations, delivery of workshops and seminars, customized training for specific work groups, and program promotion. The EAP has high utilization of the on-site services, which speaks to the EAP’s success, especially in a predominately male culture that often emphasizes self-reliance rather than seeking help.

Integrating by Organizational Design

PG&E began the journey toward integrated health and productivity by bringing all crucial program areas together, including healthcare/benefits, EAPs, wellness, absence, workers’ compensation, fitness for duty, accommodations, and disability management. The company brought on Maria Henderson, PG&E’s senior director of workforce health and productivity, in May of 2010 to lead the newly formed organization.

“With all of the key areas affecting employee health now on the same team with common leadership, we are beginning to realize the power of integration — for example, when our self-administered workers’ compensation staff began evaluating our customized occupational medical provider network, they collaborated with our benefits staff and decided to use the same plan administrators as our group health plans,” said Henderson.

Data showed that the highest cost drivers in medical care (both occupational and nonoccupational) were musculoskeletal-related. Musculoskeletal and pain-related conditions are often correlated with psychosocial conditions (Dersh, Polatin, & Gatchel, 2002). High-quality care addresses both conditions.

“By leveraging the combined buying power and joining forces, we could drive higher-quality care across both workers’ compensation and group health networks and improve the employee experience,” said Henderson. “I don’t think that would have happened before we integrated.”

Integrating Data to See the Big Picture

The data for these comparisons came from the first major initiative PG&E’s workforce health and productivity team took on — establishing an integrated data warehouse. After an extensive review of the vendor market, PG&E chose Human Capital Management Services (HCMS) Group to integrate their data. HCMS used what they call a person-centric “big picture” data model to transform data into actionable information. This big picture included comparison of a variety of data sources (see graphic to the right) including plan designs, policies, and key company programs in order to align incentives and optimize company outcomes.

From the healthcare vantage point, the analysis revealed that PG&E needed to improve both the quality of care employees received and the way employees were seeking care. For example:

  • More than 42% of PG&E employees were treated for a chronic condition, but only 9% of those with chronic conditions were managed to optimal levels.

  • A large percentage of employees did not receive recommended health screenings and preventive services, and some waited to seek medical attention until they had a major event, such as a heart attack, stroke, or diabetic episode.

  • One-third of the medical plan members who were hospitalized also experienced potentially avoidable complications related to their care.

It became clear that PG&E needed to push its health plans to provide a higher quality of care and to incent employees to take more personal responsibility for their health through wellness, prevention, and condition management strategies.

Incentivising Health Through Plan Design Changes

By working collaboratively with union leadership/committees for more than a year, PG&E jointly developed a new plan that incentivizes healthy behaviors. By participating in a health screening and by testing negative for tobacco use (or completing a tobacco cessation program), employees earn credits each year toward health accounts that effectively reduce deductibles to zero.

Initial prediction for health-screening participation was 35% to 60% of the employee population.

After the first six months of the program launch, PG&E had 90% employee participation.

The company increased coverage for preventive care and emphasized the concept of the primary care medical home. The health plan now covers four primary care visits yearly at no cost to employees to encourage care seeking at the primary care level. By January 2014, all PG&E employees will be enrolled in this single health plan, which is highly unusual for a company of this size with three unions.

PG&E also reduced plan administrators from four to two, in order to leverage the ability to purchase higher-quality care and streamline administrative costs. The company set up a one-stop shop for health advocacy and wellness that provides employees with an array of key services:

  • Health advocacy: Help in navigating the complex health care system and identifying quality providers and centers of excellence

  • Health screenings: On-site group events or employee-scheduled concierge services, where the screening will be performed at the employee’s home or work site, removing any barriers to ease of access

  • Robust wellness services: Telephonic, on-line portal, and local programs and discounts.

In addition to the data analytics supporting this total population foundational work, the data prompted the team to focus on two key subgroups that needed additional resources: 1) the top 5% of healthcare/benefit users, and 2) linemen.

Complex Health Management

Many employers try to identify the small group of employees who are driving the majority of their healthcare costs, so they can provide additional services and interventions. Through the HCMS analytics PG&E was able to identify a different top 5%—a small group of employees who were utilizing more than just healthcare. These employees used multiple benefit programs in the same year and had high absenteeism rates from use of workers’ compensation, sick time, and disability.

PG&E decided to assist this group through a pilot intervention with KnovaSolutions (a clinical services intervention provided by HCMS). Information and decision-support services were delivered telephonically to a study group of the more complex cases. Clinical staff, including master’s-level nurses and pharmacists, coached participating employees and dependents to take ownership of their health and medical decisions. Voluntary enrollment was higher than expected, with 85% of those contacted choosing to enroll, so the pilot proceeded with 263 engaged in the service. Results after the first year were promising, with high employee satisfaction scores, overall cost reductions (7% lower than the control group), and marked reductions in emergency-room visits, diagnostic tests, inpatient days, number of unique medications, and providers. The pilot will continue another year to measure effects over a longer term.

Profile of the Top 5% of Healthcare/Benefit Users

  • 1,000 employees drove 48% of total benefit costs at $55,700/person/year

  • Had an average of 16 diagnoses, 13 unique prescriptions, 12 providers, and 33 medical tests in a single year

  • Averaged 73 lost days/person/year, compared to 44 days for others

  • Were three times more likely to have workers’ compensation claims

Industrial Athlete Program for Linemen

Each employee group in a utility company offers distinctive and contrasting health challenges that require individualized approaches to encourage healthier behaviors. Linemen have physically demanding and often dangerous jobs. They may lift up to 112 pounds overhead in their work, sometimes in pouring rain and high winds. The position requires a great deal of training and on-the-job experience over a seven year period to reach journeyman status. The company’s training investment in these employees and the high-risk tasks validate the need to focus on this employee group. Because of the rigorous and challenging nature of the training and the job itself, these employees develop a close-knit co-worker culture that may reinforce both healthy and unhealthy lifestyle behaviors.

PG&E has focused on mitigation for high-risk behaviors among linemen by implementing the following:

  • Post-Job-Offer Physical Assessment To ensure that new employees coming into the job are physically fit for duty, which reduces the risk of injury during the initial training phases, a comprehensive post-offer physical assessment was established.

  • Health and Fitness Curriculum A full-day class was added to the pre-apprentice lineman-training curriculum. The class focuses on fitness and nutrition strategies that reduce the risk of cumulative wear and tear, which ensures success over an expected 20-year career. Additional information is in pilot testing for delivery to more tenured linemen.

  • Impact of Tobacco Usage Data revealed that linemen have a higher incidence of tobacco-related cancer, compared to the rest of the PG&E physical workforce. Rates of lung and esophageal cancer are particularly high, occurring at six times the rate among other employees. A closer look revealed a high rate of tobacco chewing. To combat the issue, the union collaboration committee focused on providing tobacco-free incentives through the health plan and ways to increase awareness and encourage use of the free tobacco cessation programs.

Encouraging Results

PG&E expects that their well-integrated focus on health will result in an organizational culture where employees take personal responsibility for health, both for their own benefit and for the safety of employees working with them. Having key business metrics in place has allowed the PG&E health and productivity team to show specific positive results to senior leadership. For example, comparison of 2011 to 2012 data showed a marked decrease (-10.4%) in health-related lost workdays. From a workforce management perspective, their data suggest that the new strategies have resulted in more productive employee time at work and that the health barometer is moving in the right direction.

About Pacific Gas and Electric Company

Pacific Gas and Electric Company provides electric and natural gas services to 15 million people in northern and central California. Incorporated in 1905 and based in San Francisco, the company is one of the largest utilities in the United States. PG&E has a culture of commitment to its core value of public and employee safety and to its other core values of open communication, operational excellence, customer and community service, accountability, teamwork, diversity, and inclusion.

Nancy Spangler, PhD, OTR/L, president of Spangler Associates, Inc., and consultant to the Partnership for Workplace Mental Health, is a prevention and health management specialist in the Kansas City, Missouri area.


  • Dersh, J., Polatin, P., & Gatchel, R. (2002). Chronic pain and psychopathology: research findings and theoretical considerations. Psychosomatic Medicine, 64(5), 773-786.

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