01/ 17/ 2008
by Charles R. McConnell
Much is said about the ever-increasing cost of health care, growing from year to year by multiples of the so-called "normal" inflation rate. When one asks what's causing such galloping increases, fingers point at various "culprits"—hospital rates, some care providers' incomes, costly diagnostic equipment and procedures, complex and exotic surgeries, the so-called malpractice "crisis," the layer of bureaucracy that absorbs some of the resources and, quite prominently at present, the spiraling cost of pharmaceuticals. Yet the fingers rarely point toward the greatest single source of health care waste and inefficiency: the general population. The United States spends as much as 25 percent of its health care budget on medical care resulting from unhealthy habits and other modifiable behavior.
The unhealthy habits of many workers cost employers significant amounts of money. Many of the costs related to employee behavior are hidden so they don't often receive a great deal of attention. However, studies have shown that the cost to organizations of poor employee health habits and excessive work pressure amounts to at least $3,000 per employee per year.
An increasing number of companies are providing incentives for employees to pay more attention to their health. But while this is happening, many of these same companies are shifting more of the rapidly increasing costs of health insurance to employees. Employers and insurers, including health maintenance organizations, are paying more attention to primary care and preventive care, recognizing that the best way to reduce or control health care costs is before they happen. They are recognizing that high treatment costs can often be avoided by financing illness prevention.
Why pay more attention to employee's health habits? Take smoking, which has long been regarded as the number one health risk in the population (although obesity is rapidly closing in on it—an overweight worker can add as much as $1,500 per year to a company's health care costs). It's estimated that smoking costs the United States more than $150 billion per year in health-related economic costs. There are also problems presented by alcohol and drug abusers, which are estimated to make up as much as 10 percent of the population. Employment statistics have shown that, compared with other employees, substance abusers are three times as tardy or absent, account for more than five times as many workers' compensation claims and have more accidents. So promoting healthy habits isn't simply something nice to do for employees; rather, a focus on wellness and wellness programs is beneficial to the company's bottom line. In addition to increasing costs, unhealthy employee behavior leads to losses in productivity and ultimately contributes to increased employee turnover.
A well-rounded employee wellness program is likely to include most of the following activities:
Smoking cessation programs. These are usually an initial or early element of a wellness program, since smoking is a visible problem and one for which significant gains are possible. An employer might pick up the entire cost, or might make a cost-splitting arrangement with the employees' health insurers.
Weight control programs. These are sometimes made available at an employer's facility or at some external agency under an arrangement with the employer.
Nutrition information and education. This may or may not be integrated with weight control activities. It may consist of the option to take classes, or simply the distribution of nutrition information. Some companies have taken this to the extent of providing a range of healthy choices in their cafeterias.
Substance abuse counseling and referral. This is often addressed under the auspices of an employee assistance program (EAP) that provides confidential referrals to the appropriate sources of help. An EAP will not only generate savings but can also help salvage otherwise valuable employees who may be lost if not assisted.
Exercise and fitness facilities and instruction. Many employers provide fitness facilities, some on premises and some off site, for employee use at little or no cost.
Stress management training. Often going hand-in-hand with time management education, stress management applies in two important ways. First, the education of individuals in addressing the stresses encountered on their jobs and in their lives; second, special education for managers concerning stresses they may be creating for employees.
Blood-pressure clinics and cholesterol screening and referral. These are not especially costly or difficult to set up, but they're early-warning precautions that can help head off serious illness.
A comprehensive company wellness program might also include: CPR training, accident prevention and general safety education, organization-wide events such as health fairs and posters, fliers, and other forms of literature.
A well-organized wellness program that enjoys a high rate of active participation can generate about $3 in returns for every dollar spent. Since both the employees and the bottom line are healthier as a result of the program, everybody benefits.
