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Totally Alive Workers Trim Costs For Firms What are the costs of unhealthy employees to business? • Job stress is estimated to cost $200-300 billion annually.
• At least 100 million workdays are lost each year to lower back pain, costing employers about $20 billion.
• Annually, on average, it costs employers $1,300 for each employee who smokes.
• Workplace alcohol, tobacco, and other drug use costs businesses over $100 billion each year. For many companies, medical care costs can consume half, or more, of company profits. On a national level, health care spending topped $1.1 trillion in 1998, up 5.6% from 1997. And, by 2007, health care is projected to double according to the National Coalition on Health Care These spiraling expenditures have mandated a reduction in employer heathcare costs. Primary attention is being given to the idea that prevention and/or management of disease may hold the key to cost containment . Since the majority of Americans spend more of their waking hours at work than they do anywhere else , businesses realize that new ways of thinking about healthcare costs are clearly necessary. Not only is it evident that a well-designed health management initiative impacts health risk factors at the worksite but also clearly impacts the bottom line. Health management, disease prevention, and health promotion are critical in producing healthy employees, resulting in a good investment for the dollars spent. The trend is for companies to be involved in their employees’ lifestyles. By encouraging healthy habits, employers are saving dollars and cents with typical ROI’s of 2-3:1 or more. When your employees feel healthy, balanced, and connected internally they produce extraordinary results externally for the organization. The evidence is mounting that lifestyle interventions have enormous paybacks for the employers and employees. However, even when we know what we need to do to be healthier and less stressed, it does not always mean we do it! Surgeon General, Richard Carmona, M. D. says “While employees can gain great information from health fairs, screenings, and health risk assessments, they need regular reinforcement and education on how to translate that information into actions with follow through.” A health management program like Totally Alive not only raises the individual’s awareness about health risks but also empowers them to follow through with actions. The outcome of such in-depth strategies is profound. Not surprisingly, the resultant health status improvement in employees has been shown to directly influence a company’s overall healthcare costs, recruitment/retention replacement costs, and productivity/innovation output. In an effort to check spiraling health costs, Hughes Electronics, a parent of DirecTV, has provided basic disease-management services to its 7,000 employees, and the plan is showing impressive financial results. "It has consistently produced an almost 3-to-1 return on investment," says Pamela Hymel, vice president of human resources. "As we move forward, we want to offer more than disease management," Hymel says. "We want to offer health management. Our ROI studies show that the program is a good investment, not only for our company’s bottom line, but also for our employees’ health, productivity and performance. With our enhanced program, we can have a much greater impact." A Hewitt survey of large employers with an average of 11,875 employees shows that almost three-quarters now offer or plan to implement disease-management services. Almost two-thirds of employers say that disease management has helped control their health-care expenditures, with an approximate 2-to-1 or higher return on investment Studies show employee absenteeism is reduced when wellness programs are implemented. In a study at Prudential Insurance, disability days were 20 percent lower and disability-per-capita costs were 32 percent lower after implementing a wellness program. In addition, annual medical costs fell by 46 percent. According to a study of a wellness program at Providence General Medical Center, per-capita workers' comp costs were reduced 83 percent and other savings were realized in reduced sick leave and health-care costs, thanks to implementation of a wellness program. FedEx offered a wellness and disease management program to its over 200,000 employees that resulted in cumulative five-year medical benefit cost savings of about $579 million. Additionally, six year cumulative cost savings related to decreases in medical-related lost time from work were estimated at approximately $497 million. FedEx Fitness Program participants reduced their overall benefit costs from $1,210 to $1,021 (16%) in the year following program enrollment, while non-participants' total benefits decreased from $2,104 to $1, 947 (7%). Dick Davidson, CEO, Union Pacific Railroad echoes the research by saying "We spend about $550 million a year on health care. It's a huge number. We've had several outside experts estimate that our wellness program saves us about $40 million. It’s one hell of an investment!” Health management and wellness programs represent a hot trend in corporate benefits. With fewer medical claims, prevention of specific conditions, and programs with follow through for lifestyle change, companies are finding that these and other benefits make wellness worth more than any dollars spent At a time of reduced job security, wellness programs provide a spark of good will and foster the all-important message of self-responsibility. Wellness programs also help to recruit and retain the most effective, productive employees. Studies show a correlation between employees who seek out corporate wellness programs and the most productive workers. Morale is another benefit of a wellness program. These programs are inexpensive ways to show employees the organization is interested in them as total persons. This is truly an idea whose time has come. By benefiting both employer and employee while containing cost, wellness programs embody the quintessential “win-win” philosophy for individuals and companies alike.
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