In today’s tough economic environment employers are searching for every cost-cutting opportunity they can find. Organizations who still view wellness as a frivolous, nice-to-have benefit might be tempted to cut back on wellness spending, but now is not the time to make those cuts.
If we do, we’ll all pay the price in the long run. Rising health care costs are a significant risk to business growth, profitability and competitiveness. Creating and maintaining a healthier workforce by seeing healthcare professionals like dr robert macarthur more often is more important than ever in containing those costs. Unhealthy workers cost time and money.
- The unhealthiest workers have the highest medical costs.
- The unhealthier the lifestyle the greater the cost drain on the company.
- As unhealthy workers age their health costs increase.
- Smokers have higher medical costs.
- Smokers are more likely than non-smokers to miss more than a week of work because of health reasons.
- Inactive employees spend more time in the hospital and call in sick more often than those who exercise.
- Workers with severe weight problems are more likely to have medical claims exceeding $5,000 in one year.
- Most unhealthy people have more than one health risk factor, meaning even higher costs to the company.
- If employers could get employees to lead healthier lives the number of risk factors would decrease and so would health costs.
Even during a financial crisis, investing in human capital is good business, say industry experts.
“CFOs have always viewed health care as an expense, but rarely as an investment,” said Jerry Ripperger, director of consumer health at the Principal Financial Group. “But improving the health of your employee base, rather than simply providing reimbursement, is an exercise in risk management with a true ROI.”
To save more money on health care in the future, companies must spend more money on health care now. Studies show that for every dollar spent implementing an employee wellness program, employers see an average reduction of $2.45 in medical claims.
Getting the most our of your wellness dollars
When considering how wellness dollars should be spent, doing an annual health risk assessment (HRA) can be the most effective way to identify and provide intervention for health risk factors. A good HRA includes a health survey with questions that address health and medical history, lifestyle, and a biometric screening.
Self reported biometric results are acceptable but an actual screening that includes a blood draw is the most accurate and informative. While some employees may have concerns about participating in these screenings, studies show that completing a health risk assessment ranks among the most popular workplace wellness activities.
Once they’ve been through the process, most employees find the annual event informative and helpful in making improvements in their health. With rising deductibles and co-pays many employees see the HRA as a cost savings, using it as a pre-screen to a clinic visit, and then sharing those results with their physician.
For others, the HRA is their only form of preventive care. They only go to the doctor when they are sick. By then the progression of disease has reached a more serious, more costly level. The HRA provides preventive care, often detecting undiagnosed health risk factors like hypertension and diabetes.
Comparison reports show that employees who participate in repeat annual health risk assessments gradually decrease the number of health risk factors and improve their overall health scores. Getting employees to participate can be challenging in some environments. Nearly half of employers offering health risk assessment offer rewards for completing them.
The most effective incentives in getting employees to participate are financial, with discounts on health insurance premiums having the highest motivational impact. Some companies are even requiring participation as a condition of enrollment in the medical plan.
The return on investment
A 2008 study by the Aon Consulting Group shows that although employers face a 10.6 percent health care cost increase in 2009, it is the smallest increase over the past six years, and health care industry experts believe that employers’ actions to improve employee health are paying off. The study attributes the decrease in the medical trend rate to more employers and employees taking advantage of wellness, health promotion and consumer driven programs.
“But more must be done to truly stem the tide of rising health care costs,” said Bill Sharon, senior vice president with Aon Consulting and director of the study. “This includes greater senior management support for these program, better employee communications and more consistent cooperation from the medical community.”
Wellness is getting attention on Capitol Hill as well. A collection of health care groups calling itself the Health Reform Dialogue recently issued a set of recommendations aimed at governing the debate over restructuring health care.
In a March 27 Wall Street Journal Health Blog, Laura Meckler wrote, “The Health Reform Dialogue included a long list of ‘wellness and prevention’ ideas, most of which have wide support, such as better coverage for prevention services, investments in health information technology, eliminating disparities in health, and helping people improve their own health.”
We are experiencing the toughest economic conditions in our lifetime, resulting in a fiercely competitive marketplace, losses of thousand of jobs and uncertainty about the future. Employees are being asked to do more with less, increasing their risk for illness, injury, and stress related illness. It is more critical than ever to maintain the health of the existing workforce. Not only do wellness programs reduce health risks, they improve overall health, they create more loyal and engaged employees, improve job satisfaction levels and improve long term retention.
