Study: Wellness Programs Decrease Health Care Costs

The paper examines existing research and case studies to assess the state of workplace wellness incentives and their supporting ROI data, and makes recommendations for determining what rewards are most effectively used in wellness programs.

How can employers and governments encourage individuals to practice healthier behaviors? How can companies get their workers to stop smoking, watch what they eat, consume less alcohol, take their medicine, and change their diet? One of the most promising methods is to offer incentives within corporate-sponsored wellness programs, according to a new study from the Incentive Research Foundation (IRF). The study highlights the positive role of workplace wellness incentive programs—important findings in light of the forthcoming 2014 implementation of the Patient Protection and Affordable Care Act's provisions that increases the potential funding of wellness incentives to equal as much as 50 percent of the per worker total health care premium.

In "Energizing Workplace Wellness Programs: The Role of Incentives, Rewards & Recognition," the IRF examines whether workplace wellness programs can play a significant role in reducing the largely preventable conditions brought that escalate U.S. health care costs.

The paper examines existing research and case studies to assess the state of workplace wellness incentives and their supporting ROI data, and makes recommendations for determining what rewards are most effectively used in wellness programs.

"The U.S. is spending about $2.5 trillion per year on health care. As much as 75 percent of that is spent on preventable conditions, so the potential savings through preventative health care measures that include workplace wellness programs could be as high as $1.9 trillion per year. And this doesn't even consider productivity gains or worker quality of life improvements," said Rodger Stotz, IRF chief research officer.

IRF President Melissa Van Dyke said the study shows that corporate wellness programs have shown savings-to-cost ratios of more than $3 saved for each $1 invested. She also cited organizations like Johnson & Johnson with estimated savings of $9 to $10 million per year as a result of its wellness program.

"Less than one in five employees will participate in wellness programs that do not offer rewards. This changes dramatically when incentives are offered—four in five will participate. Clearly all businesses should consider this when looking at their wellness efforts," concluded Stotz.

To view the paper, go to http://www.theirf.org/.6078727.html.

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