Good health is good business. Nearly
70 percent of the U.S. work force is
overweight, and each of those employees costs American businesses an additional
$500 to $2,500 in medical expenditures and
work loss for a total of $45 billion in annual
costs related to obesity alone.
As health care costs escalate exponentially,
employers are implementing wellness activities. They know that keeping employees
healthy with preventive programs can dramatically impact the price of health benefits.
Smart Business spoke to Barry Arbuckle,
Ph.D., president and CEO of MemorialCare
Medical Centers in Orange and Los Angeles
counties and chair of the California Hospital
Association, to learn more.
Why are wellness programs so important?
The work force is just as critical to your bottom line as the quality of your products and
services. Low-cost wellness and incentive
programs not only reduce costs but help
recruit, retain and increase employee productivity. According to the U.S. Department
of Health and Human Services, companies
that implement wellness programs save from
$1.49 to $4.91 for every dollar spent.
A study by the University of Michigan
showed that the health care cost of a 45- to
54-year-old who is considered at low risk for
health problems is $2,081. A high-risk worker’s cost more than doubled to $5,813, and
that doesn’t include absenteeism, loss in productivity and other business costs.
What is the employer’s cost?
The business cost to implement wellness
programs can be minimal — anywhere from
$50 per employee annually to as much as
$500 per person or more plus any costs associated with financial rewards for improving
one’s health. While some employers institute
exercise programs and wellness and education on-site, others subsidize memberships in
fitness centers or weight loss programs or
reward staff for improvements in reaching
healthy milestones, like reduced blood pressure, improved cholesterol numbers or
weight loss. Many are also using their
intranet and Web site to offer individualized
health and wellness records that help employees track their progress. And others
are crafting disease management programs
to help stem the costs and effects of diabetes,
heart disease and other chronic conditions.
Do financial and other incentives work?
A 2007 National Business Group on Health
study revealed that almost half of large
employers currently offer financial incentives to encourage healthy behaviors.
Workplace health programs resulted in lower
cost for sick leave (five times); long-term disability (four and one-half times); short-term
disability (four times lower); and general
health coverage (three and one-half times).
Those same companies experienced corporate financial gains, such as 20 percent higher revenue per employee. The market value
of the company was 16.1 percent higher, and
shareholders had 57 percent higher returns
during a two-year period.
In addition, many employers offer monetary and other rewards (extra time off, gifts,
etc.) to encourage long-term involvement in
healthy living like stopping smoking and regular participation at a fitness center.
Health care providers like MemorialCare
can offer their physicians and other clinical
staff to conduct health assessments and present programs on healthy living and preventive medicine at the worksite or in a location
convenient to the company’s employees. We
also can help tailor a wellness program that
best fits the profile of your work force and
not only promotes healthy habits but also
lessens the risk of accidents and injuries.
Can being unhealthy cost you?
With U.S. health spending estimated at $2.2
trillion this year and business premiums rising, more and more companies are penalizing employees with health risks. Annual
physicals and health risk assessments help
determine if employees are in an acceptable
range for such factors as body fat, cholesterol
and blood pressure measurements. Penalties
come in the form of insurance surcharges,
higher deductibles, more out-of-pocket payments and reduced paychecks.
Where can an employer start?
Begin by establishing an employee wellness committee to plan your initiatives with
guidance from local health professionals and
assure that personal privacy is protected.
Start with simple diagnostic tests that make
employees aware of their blood pressure,
HDL and LDL cholesterol numbers, weight,
nutritional habits, smoking and fitness levels.
Give employees a pedometer and offer a
mealtime walking program and sessions that
share advice, activities and coaching to reach
and maintain goals. Identify employee advocates who can motivate others to follow their
lead. Whenever possible, engage the employee’s family (who are typically included in the
health coverage) to extend healthy habits at
home. And partner with every community
resource available — from the local public
health department and hospital to community-based organizations like the American
Heart Association, American Cancer Society
and American Lung Association.
BARRY ARBUCKLE, Ph.D., is president and CEO of MemorialCare Medical Centers (www.memorialcare.org) and chair of the California
Hospital Association. Reach him at [email protected] or (562) 933-9708. MemorialCare Medical Centers include Saddleback
Memorial Medical Center in Laguna Hills and San Clemente, Orange Coast Memorial Medical Center in Fountain Valley, Anaheim
Memorial Medical Center, Long Beach Memorial Medical Center and Miller Children’s Hospital in Long Beach.
