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Prevention Works

 

Businesses are now facing a common threat that is draining their profits regardless of product sales volume.  Nationwide, employee health care costs are cutting into company profits.  Insurance premiums are rising at an alarming rate and are a major factor in operating costs.   Every year, companies small and large struggle with how to manage the cost of providing their employees with basic health care services.

 

The key to lowering employee health claims and insurance premiums is implementing a prevention program.  Preventing individuals from becoming sick or detecting a health issue before it worsens can save a company an enormous amount of money on medical and pharmaceutical costs.  Healthy workers do not file claims and do not miss work due to being sick.  Hence, companies have a stake in keeping their employees healthy.

 

Companies need to invest in prevention for the following reasons:

 

  • The typical American worker is unhealthy, despite the rising amount of spending on health care.
    • Our nation’s population is largely sedentary.  Sixty percent of adults do not exercise on a regular basis.
    • Obesity is reaching monumental proportions.  One in five is individuals is considered obese.
    • Despite overwhelming evidence, tobacco use continues to be popular.
    • The World Health Organization describes stress as a “world wide epidemic.”
    • High-risk alcohol consumption silently takes its toll on American’s health.
    • Chronic health conditions, such as diabetes and high blood pressure continue to plague the American population.

 

  • Most diagnosed illnesses could have been prevented.
    • Ninety-five percent of the financial resources that companies spend on employee health care claims were on illnesses that were preventable.
    • Seventy percent of treament costs could have been avoided with preventative care.
    • Fifty percent of the more than two deaths that happen every year were due to preventable illnesses (tobacco use, poor diet and exercise and alcohol)

 

  • Healthcare costs continue to rise.
    • Over $1 trillion is spent on health care and this figure is projected to rise to $2.1 trillion in the year 2007.
    • In the United States, medical coverage per person costs about $4,000 per year.
    • As health care costs rise, the number of individuals who can afford it lowers.  In 1997, 16 percent of the population or 43 million people did not have health insurance.

 

  • The best place to implement and monitor wellness programs is in the workplace.
    • Two-thirds of the US population is employed.
    • The majority of a typical person’s time is spent at work.  On average, a US worker has a 10-hour workday and often works on the weekend.
    • It is in an employer’s best interest to promote health and wellness in order to have a workforce that does not overtax its health coverage and raise premiums.
    • Unhealthy workers cost businesses billions of dollars every year in health care and lost productivity.

 

  • Studies show that wellness programs can improve a company's population health as well as lower medical costs and show a return on investment.
    • In a 1997 review of worksite wellness programs by Steven G. Aldana, Ph.D., results showed a large decrease in medical claims and absenteeism when health programs were promoted and implemented.
    • A review of 30 articles focusing on worksite health concluded in 28 of the articles that wellness programs would be financially beneficial to companies and their employees.
    • Studies showed that smoking cessation programs on average saved companies $6 for every $1 spent.

 

  • As businesses are realizing the cost-effectiveness of wellness programs, the programs are now more prevalent than ever.
    • Union Pacific Railroad implemented a health initiative among their employee population of 57,000 that resulted in reducing the risk of high blood pressure by 45 percent, high cholesterol by 34 percent, weight issues by 30 percent and smoking reduction of 21 percent.
    • Lab Safety Supply’s wellness program for their workers included educational programs, fitness workshops, medical screenings and health fairs.  These initiatives produced a 97 percent decline in absenteeism.  Their smoking cessation program resulted in an 80 percent participation rate, and of that percentile, 68 percent remained non-smokers after six months.
    • Lincoln Plating is a small to mid-size company that earned an estimated $800,000 return on their $85,000 investment on their health initiatives.  With wellness in place, their insurance premiums, absenteeism, turnover rate, workmen’s compensation claims, and injuries decreased while productivity reached new highs. 

 

For a long-term solution to health care problems, companies must invest in a wellness program.  The dividends of this investment will be a healthy worker population that will be more productive and less of a financial strain on the organization.

 

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