Employee wellness programs: An effective method to reduce healthcare cost
By: Scott Johnson
The cost of health care is significantly impacting the bottom lines of many Utah businesses. According to Health Insurance Online, health care premiums in Utah averaged a yearly increase of 9.2 percent from 1999 to 2007. Employee paychecks and business profits are simply unable to keep up with this astonishing inflation in health insurance premiums.
One of the goals of the Healthy People 2010 initiative – a government program designed to improve the health of Americans – is for 75 percent of worksites to develop a comprehensive wellness program. In fact, the federal government offered grants to help small businesses establish a qualifying comprehensive wellness program as part of the recent healthcare reform legislation.
A qualifying comprehensive employee wellness program involves four parts:
- Programs that help employees become aware of their current health level
- A work environment that encourages healthy living
- Supportive services to help change unhealthy lifestyles
- Initiatives that maximize employee engagement.
But do wellness programs work? And are they cost effective? A wealth of data exists that says the answer to both questions is YES.
According to a report in the February 2010 edition of Health Affairs, employers realized a $3.27 reduction in medical costs and a savings of $2.73 in absenteeism costs for every $1 spent on employee wellness programs. This suggests spending money on employee wellness provides a significant Return On Investment.
In September 2000 The American Journal of Health Promotion reported that 25 to 30 percent of medical costs are associated with potentially changeable behaviors linked to increased risk of cardiovascular disease and stroke. According to the U.S. Department of Health and Human Services, approximately 5 percent of the population accounts for almost half of the total healthcare expenses in the United States.
Assisting high-risk employees in modifying unhealthy behaviors can have a significant impact on these staggering statistics.
In an effort to improve employee health and well-being, Johnson and Johnson implemented a comprehensive wellness program aimed at changing unhealthy behaviors. Remarkably, they were able to achieve a reduction in 8 of 13 disease risk factors among 4,586 employees, as reported in the May 2002 edition of the Journal of Occupational and Environmental Medicine.
Providing an adequate incentive is essential to maximize employee engagement and wellness program effectiveness. A 2010 study by the Kaiser Family Foundation described a 14 percent increase in employee wellness program participation when an incentive was offered to employees. Incentives can range from something as simple as recognition in the company newsletter to a monetary bonus.
These results present a compelling argument that companies who implement a comprehensive wellness program could realize a reduction in healthcare expenses and ultimately increases in profits.
Scott Johnson is a professional health and fitness writer and author of “Nutrition: A Word of Wisdom.” His work has been featured on LiveStrong.com, eHow.com, Examiner.com, Yahoo and other print and web media sources.He holds a doctorate in Naturopathy and specializes in health, fitness and disease management. Read more of Scott’s published work at http://www.examiner.com/holistic-health-in-salt-lake-city/scott-johnson. Follow Scott on Twitter @DocScottJohnson.