Wellness Programs Garner Lower Spending

Over the past 20 or more years, the aging population in the United States, coupled with advancements in medical technologies/drugs, combined in a “perfect storm” resulting in continued increases in health care spending in the United States. The cost of treating people with conditions that used to be fatal usually doesn’t end with the initial treatment, either; these people generally require ongoing and expensive care.

Even with the passage of health care reform, employers are seeking an effective means of controlling growing health care expenses. When you consider that a 2008 report from the U.S. Congressional Budget Office states that general health care spending increased from $666 billion in 1985 to $1.9 trillion in 2005, it’s easy to see how this increased spending has affected employers (who often bear the brunt of health care costs).

If employers are to be effective in combating these financial hikes, they must develop and promote programs that reward employee health self-management and preventive care. Wellness programs allow them to do this by providing hands-on programs that benefit the overall employee health. These programs improve the lives of participants because they tend to reduce poor health-risk lifestyles. Long-term health care spending is also decreased when healthier employees develop fewer chronic diseases.

A Proactive Approach
More than 70 percent of all health care spending in the U.S. goes towards the treatment of medical conditions that arise from poor lifestyle choices. By offering employees the opportunity to assess and improve upon their health by making better lifestyle decisions, employers can reduce health problems and the skyrocketing costs associated with treatment of those problems. A report from the Centers for Disease Control and Prevention concludes that preventative care programs and health education can curb an overwhelming number of chronic diseases.

Yesterday’s “wellness” program -“ which simply offered a small segment of the employee population (those already health-conscious) a chance to further manage their health -“ is out. Today, a fully integrated wellness structure encourages employees to take accountability for their lifestyle choices. Old wellness programs were, in essence, “preaching to the choir” in that for the most part, only the already healthy employees participated in events like health risk assessment and free blood pressure screening. Employers now realize that positive health habits can be garnered through creative programs that engage all employees.

A paramount benefit of implementing an incentive-based wellness program is its ability to transform the idea of health maintenance into something meaningful. Dr. Dee Edington, director of the Health Management Research Center at the University of Michigan, found that the average amount of health care spending for low health-risk workers aged 35 to 44 in 2001 was $1,523. Workers who did not have their health screened and assessed via a wellness program spent, on average $2,100, while employees who were labeled “high risk” spent approximately $4,530.

Wellness programs are not just attractive to employers; employees also recognize the benefits of these programs. Many companies have adopted programs and seen enthusiastic employee buy-in. Some employers report that employees have asked for spouse participation, a further measure of the attractiveness of these programs. The positive reaction has helped speed the increase in the spread of wellness programs.

Because wellness programs are now viewed in a more positive light than ever before, companies across the country are integrating programs in their employee benefits packages.

Success Through Employer Implementation
Companies interested in developing and implementing a wellness program are advised to discuss the option with a benefits specialist to gauge and understand how to fully incorporate wellness into their overall benefit design.

Because wellness programs can be as diverse as company employees, there isn’t just one way to implement them. Success is dependent upon changing corporate culture to support and encourage employees to be healthy. Companies that develop policies and procedures that support healthier lifestyle choices will assist employees with taking wellness into their own hands. Wellness programs can range from the simple (i.e., encouraging employees to train for a charity run or hosting a series of healthy cooking classes) to involved (i.e., requiring annual testing for tobacco use, hypertension, obesity and cholesterol levels). Creating an environment that highlights the benefits of adhering to a healthier lifestyle will impact medical costs, lower absenteeism, and create a more productive workforce.

David Zick is the President and Founder of Bingham Farms, Mich.-based Group Associates, Inc., a nationwide leader in proprietary benefit management solutions, offering companies resources to meet their benefit administration and brokerage needs. For more information, please email [email protected].

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Richard Blanchard
Rick is the Managing Editor of Corp! magazine. He has worked in reporting and editing roles at the Port Huron Times Herald, Lansing State Journal and The Detroit News, where he was most recently assistant business editor. A native of Michigan, Richard also worked in Washington state as a reporter, photographer and editor at the Anacortes American. He received a bachelor of arts from the University of Michigan and a master’s in accountancy from the University of Phoenix.