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Motorola Wellness Center Produces ROI=$3.93:$1 Motorola Wellness Center Study ANALYSIS SUMMARY A. MEDICAL CLAIMS EXPERIENCE FOR LIFESTYLE DIAGNOSES Evaluation of medical costs for employees participating in Motorola’s Wellness Initiatives revealed lower annual increases in per-employee medical costs for lifestyle-related diagnoses compared with non-participants. Total savings realized from Wellness Center [$4,646,282] and Wellness Center Reimbursement Program (external) [$1,833,391] participation in 2000 was $6,479,673 for medical costs including inpatient, outpatient, prescription, claims and administration. B. DISABILITY CLAIMS EXPERIENCE FOR LIFESTYLE DIAGNOSES Evaluation of disability direct costs for employees participating in Motorola’s Wellness Initiatives over the two-year period of 1999 and 2000 revealed lower per-case costs for lifestyle-related diagnoses than non-participants. Direct savings realized from Wellness Center [$3,326,456] and Wellness Center Reimbursement Program (external) [$1,218,504] participation over the two-year period of 1999 and 2000 was $4,544,960 for disability costs including costs for both claims and administration. Indirect hidden savings realized from disability costs related to these disability incidences totaled $5,910,349. Total direct and indirect savings attributable to Wellness Center and Wellness Center Reimbursement Program (external) participation was $10,455,309 for disability costs. C. HEALTH SCREENING AND HEALTH POWER PROFILE PROGRAM EXPERIENCE Wellness Center and Wellness Center Reimbursement Program (external) participants scored better on measures of blood pressure and total cholesterol biometrics as well as employee statements about frequency of aerobic exercise and tobacco use. D. WELLNESS CENTER EXPERIENCE Based on 1997-2000 data, the medical cost for lifestyle-related diagnoses for Wellness Center participants is increasing at a rate of 2.5% while medical cost for non-participants’ is increasing at a rate of 18%. V. 2000 WELLNESS PARTICIPANT VS. NON-PARTICIPANT ROI $ 16,924,982 Medical and Disability Cost Savings ($6,479,673 + $10,445,309) $ (3,141,623) Motorola Wellness Center Operating Costs $ (1,170,240) Wellness Reimbursement Program Costs $ 12,613,119 Net Savings Return on Investment = $3.93:$1 VI. COST-BENEFIT PROJECTIONS – 5-Year Plan Wellness Participants vs. Non-Participants ROI Projections Assumptions: Medical costs for lifestyle-related diagnoses are increasing at a rate of 2.5% for Wellness Participants; 18% for Non-Participants. Disability cost savings are stabilized at $10.4M each year. Motorola Wellness Centers membership increases 5% each year. Wellness Center Reimbursement Program (external) participation is stable across years. Wellness Participants vs. Non-Participants Per Employee Medical Cost Projections Assumptions: Medical costs for lifestyle-related diagnoses are increasing at a rate of 2.5% for Wellness Participants; 18% for Non-Participants. Net savings realized for Wellness Center participants from the Wellness Reimbursement Initiative is approximately $12.6M. For the five-year period of 2001 to 2005, these same savings are estimated to reach in excess of $56M. Indications point to successful reduction of long-term healthcare costs. VII. SUMMARY This study does not address the employee relations value of the Wellness Reimbursement Initiative. Instead it takes a strictly economical approach in demonstrating that the program pays off for Motorola. For each dollar spent on the funding employee membership in either on-site or external fitness facilities, nearly four dollars are returned to Motorola in the form of reduced healthcare costs.
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