Magazine article Risk Management

Corporate Wellness: A Healthy Return on Employee Investment

Magazine article Risk Management

Corporate Wellness: A Healthy Return on Employee Investment

Article excerpt

Sixty-one percent of adults in the United States are overweight or obese, according to the Surgeon General and the Centers for Disease Control and Prevention. These numbers have steadily risen, with obesity figures alone tripling since 1980. Overweight individuals are at an increased risk for a wide range of conditions, including heart disease, diabetes, stroke, cancer, breathing problems, arthritis and psychological disorders such as depression. Even more importantly, obese adults have a 50 percent to 100 percent greater chance of premature death, with an estimated 300,000 deaths a year attributed to obesity.

The problem is compounded by an increasing tendency of Americans toward other unhealthy lifestyle choices. The Surgeon General reports that less than one third of adults get the recommended amount of physical exercise while 40 percent are not active at all. Many continue to abuse tobacco and alcohol. And in 1996, the American Journal of Health Promotion reported that 72 percent of Americans experience frequent stress-related physical or mental conditions.

The financial impact of these unhealthy lifestyles is enormous. For example, in 2000, the total direct and indirect cost of the United States' weight problem was $117 billion. The Washington Business Group on Health reported that obesity costs American businesses $12 billion a year from higher health care utilization, lower productivity, increased absenteeism and elevated insurance premiums.

The United States already spends more on health care than any other country in the world. Of the $585 billion that private payers spent on medical services in 1997, $348 billion (60 percent) went to purchase health insurance. Yet much of this money is being used to treat conditions that are preventable.

Enter corporate wellness programs. By keeping employees healthy, these programs can not only reduce health care costs and increase productivity, but improve the company image, facilitate recruitment, and reduce turnover, absenteeism and job injuries as well.

Award-Winning Programs

Each year the C. Everett Koop National Health Award is given to an organization to recognize its wellness program for achievement in improving health and decreasing medical costs. Winner of the 2001 award, Citibank's health management program was designed to lower health-related risks and costs for high-risk participants. It focused on a variety of risk factors and included health awareness education, behavior change and risk reduction components, and used on-site medical clinics and a travel health program. Citibank's Healthtrac Program, a major part of the overall effort, used health risk appraisals to determine those employees who were most likely to incur high medical costs in the future so that a more intensive health program could be focused in their direction designed to help change their behavior.

The program led to healthier behavior with regard to fat and salt consumption, fiber intake, exercise, seatbelt use, stress and smoking. Citibank documented a financial return on investment from lowered medical expenses of $4.50 for every dollar spent on their health program.

Motorola also has a successful, Koop Award-winning plan. The company focuses on education, prevention, wellness strategies and support including disease management programs, flu vaccinations, cancer screenings, smoking cessation programs, a twenty-four-hour nurse telephone line, back care, on-site wellness centers, stress management and children's aerobics and nutrition programs.

While health care costs for participants still increase each year, participating Motorola employees see only a 2.5 percent increase compared with 18 percent annual increases for non-participants. For every dollar invested in its wellness programs, the company found that it saves $3.93 in medical expenses. This translated to almost $6.5 million dollars in the United States alone in 2000. …

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