Get Wired for Wellness
The programs more than pay for themselves, but it can take three years to realize the financial benefits.
- By Craig Halls
- Jul 01, 2005
HOW many employers or employees were faced with the following scenarios in the last five years: a change in health plan vendors, a decrease in benefits coverage, or increased cost sharing for the insurance premium? If you were employed by a traditional American company, you probably were subjected to one of the three solutions employers have used recently in an attempt to manage health care costs.
The problem with these three solutions is they are not really solutions; they were cost-shifting measures that had a short-term impact but were not designed to make a significant, long-term difference. One solution that is growing in popularity and has been proven successful is the workplace wellness program.
What exactly is wellness? Some would say wellness is the concept of early recognition and early intervention. More specifically, the purpose of a wellness program is to identify potential risk factors (obesity, cardiovascular disease, high cholesterol, high blood pressure, etc.) and intervene early before these risk factors become chronic, long-term health issues. Some might say wellness is prevention. After all, it is well documented that prevention makes sense, or in the case of a 2003 report from U.S. Department of Health and Human Services, prevention makes common "cents." Yet others claim wellness simply refers to helping individuals become healthier.
Regardless of the definition, there is no denying the fact that wellness programs are growing in popularity and probably will continue to do so as companies attempt to implement programs designed to make their bottom lines better and their workers healthier. This is evidenced by the Wellness Councils of America, which indicates more than 80 percent of employers with 50 or more employees have some form of health or wellness program in place.
Employers have a vested interest in wellness programs for their employees for a multitude of reasons. Poor health habits affect a company's health costs, injuries, and productivity. The University of Michigan released a study in 2001 that showed workers who have high health care costs also have high worker's compensation costs. The study found that only 4.9 percent of low-risk workers filed worker's compensation claims, compared with 5.4 percent of the medium-risk and 8.2 percent of the high-risk employees. In terms of actual dollar amounts, total worker's compensation costs increased from $2,178 per person among low-risk employees to $15,162 per person among high-risk employees.
Additionally, because employees spend roughly half of their waking hours at work, it makes sense to implement health and wellness programs at the workplace.
Elements of a wellness program vary greatly. In the initial stages of a wellness program, a company may opt to provide basic health promotion activities such as a walking club, distribution of literature, or a health fair. Other wellness program ideas include:
* flu shots
* smoking cessation program
* on-site seminars
* employee assistance programs (EAPs)
* on-site exercise classes
* on-site massage therapy
* injury prevention education
The ideal starting point for a wellness program is the health risk appraisal (HRA). The HRA usually consists of an individual completing a health history and lifestyle questionnaire along with a biometric screening (measurements of cholesterol, blood sugar, body fat, body mass index, and blood pressure).
Nowadays, health care professionals will go to an employer's site to provide the HRAs and biometric screenings, while in the past the blood sample for the biometric screening would be obtained by using a syringe and sending the sample to a lab for the results.
Improvements in technology have made it possible to obtain the blood sample through a painless fingerstick method. This sample is then placed onto a slide and the results are available within five minutes. The results from the biometric screening and the health history questionnaire are mailed to a company that compiles the data into various reports. With the data from the screening and questionnaire, a confidential report is mailed directly to the individual's home, and the company receives an aggregate report or summary of the company's status on a variety of health risk factors.
The aggregate report is of tremendous value because it provides information on troublesome areas for the company and offers direction on where the company should focus its wellness initiatives. For example, if the aggregate report indicates a company has a high population of employees with elevated cholesterol, it would be cost-effective for the company to implement a cholesterol management program consisting of literature distribution and guest speakers.
The following statistics provide insight into the importance, both medically and financially, for reducing health risk factors:
* A 10 percent reduction in body mass index will result in a financial savings of $2,200 to $5,300 per person.
* Per capita medical expenditures totaled $13,243 for people with diabetes and $2,560 for people without diabetes.
*Lost productivity caused by high blood pressure is estimated at $10.8 billion.
Return on Wellness Investments
Wellness programs are faced with the challenge of constantly justifying their existence and cost effectiveness. Usually the impact of a wellness program is not immediate. Typically, there is a one- to three-year lag from the initiation of a wellness program until the financial benefits are realized.
A review on the return on investment for worksite wellness programs found benefit-to-cost ratios ranging from $1.49 to $4.91 in benefits per dollar spent on the program, with a median of $3.14.
Regardless of the size of the company or the magnitude of the wellness program, companies can benefit greatly from wellness programming. A case study by Motorola found that for every $1 invested into wellness benefits, $3.93 was saved. The wellness offerings at Motorola are numerous and include disease management (asthma, cancer, depression, diabetes, infectious diseases), flu immunizations, cancer screenings, smoking cessation, health screenings and health risk appraisals, 24/7 nurse telephone line, health fairs, back care, on-site/external wellness centers, children's aerobics and nutrition, stress management, and shift work wellness. Motorola's programs have also resulted in a 2.4 percent increase in annual aggregate health care costs for employees participating in the wellness program compared with an 18 percent increase for non-participants.
A smaller-scale wellness program was analyzed at DaimlerChrysler. It found that for every participant who had a health risk appraisal and performed one wellness activity, there was a $200 savings realized.
Wellness programs have been tested and time after time have been found to be cost effective. Regardless of the size of the company or scope of the program, effective wellness initiatives are smart business decisions. As employers seek solutions to the continuing problems of obesity, unhealthy workers, and higher insurance premiums, workplace wellness programs make financial sense as well as common sense.
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10. U.S. Department of Health and Human Services. Prevention makes common "cents." Available at: http://aspe.hhs.gov/health/prevention/.
11. U.S. Department of Health and Human Services. Prevention makes common "cents." Available at: http://aspe.hhs.gov/health/prevention/.
12. U.S. Department of Health and Human Services. Prevention makes common "cents." Available at: http://aspe.hhs.gov/health/prevention/.
This article appears in the July 2005 issue of Occupational Health & Safety.
This article originally appeared in the July 2005 issue of Occupational Health & Safety.