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@example.com 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.