Organizations are recognizing that improving the health, and therefore increasing productivity, of their workforce can do more than cut costs. Increased productivity leads to an improved bottom line and sustained competitive advantage. Successful outcomes-based wellness programs measure productivity in addition to focusing on medical cost savings. For example, an independent study found that participants of Interactive Health’s programs returned to work sooner than claimants who did not participate – 11 days sooner from worker’s compensation, and 17 days sooner from short-term disability. The implication is simple: by taking a strategic approach to wellness, an organization develops a workforce that is healthier, more productive and more likely to drive value.
Financial Benefits of Implementing Wellness Programs
While companies certainly care about the well-being of their employees, benefits decision-makers admit that a primary reason their company maintains a wellness program is to help curb health care costs, and 59 percent of companies agree that wellness programs can help reduce these costs.
Despite the benefits of wellness program, nearly a quarter (22 percent) of companies do not offer them for their workforce due to the difficulty in quantifying the return-on-investment (ROI). However, a comprehensive analysis of 42 published studies of worksite health promotion programs showed that companies that implemented an effective wellness program realized significant cost reductions and financial gains, including:
- An average of 28 percent reduction in sick days
- An average of 26 percent reduction in health costs
- An average of 30 percent reduction in workers’ compensation and disability management claims
- An average $5.93 to $1 savings-to-cost ratio.
Reasons for Investing
Rising health care costs are unsustainable
- In 2007, national health care expenditures in the United States totaled $2.2 trillion or 16% of its gross domestic product, a 14% increase from 2000
- In 2007, private health insurance obtained through the workplace covered nearly 158 million people under the age of 65 years or 61.6% of the population
- Since 2000, health insurance premiums for a typical family of four have increased by 114%
After adjusting for population age and sex differences, average medical expenditures among people with diagnosed diabetes were 2.3 times higher than people without diabetes. 4.
Health’s impact on worker productivity
- Productivity losses related to personal and family health problems cost U.S. employers $1,685 per employee per year, or $225.8 billion annually
Workforce demographics are changing
- By 2018, nearly 24% of the total U.S. workforce will be age 55 or older compared to 18% in 2008
Effective interventions exist but are underutilized
- In a 2004 survey of 730 worksites of varying sizes and industry, only 6.9% of worksites offered a comprehensive worksite health promotion program