The Case for Employee Wellness Programs

Wellness programming means different things to different corporations. Effective wellness initiatives  can be as simple as bringing baskets of fresh fruit into break rooms to encourage better eating. They  can be as extensive as building fitness facilities onsite or paying for obesity treatments.

A driving factor behind the push toward wellness spans corporations of all types, sizes and cultures:  that is, health care expenses are spilling over the organization belt buckle. The annual cost of  medical services in the United States is increasing at seven times the rate of inflation. And the rise  in medical costs is one boom pundits expect our economy to sustain.1

This trend makes it increasingly challenging for corporations to maintain current levels of insurance  coverage. In 2003, health care inflation forced 65% of corporations to increase employees’ share of  health costs.

Seventy-nine% of large firms said they will increase workers’ share of health costs in 2004.2 But with  lost benefits and increased financial burdens come lost morale and productivity.

Companies are searching for another way. While corporations cannot control many of the supply-side  elements contributing to increasing health care costs—malpractice insurance rates, the nursing  shortage—they can help curb demand. That’s why efforts are being redirected from illness to wellness.

The case for Employee Wellness Programs is supported by an ever growing body of evidence demonstrating  the high costs associated with controllable health risks:

• One research study reports that obesity raises health care costs by 36% and medication costs by 77%.
• Michigan officials estimate physical inactivity cost the state nearly $8.9 billion in 2002, a cost  estimated to be largely borne by corporations through insurance premiums and lost productivity.
• The not-for-profit National Committee for Quality Assurance reports that the estimated average cost  for postnatal care for women who did not receive prenatal care was $2,341 more than for women who had.  And the indirect costs of unhealthful behavior can be just as high.

Information shows that healthier employees are more productive, spending more time at work and showing  increased “presenteeism,” or productivity, while there. Further, healthier employees use fewer medical  services. The five leading causes of death in the United States — heart disease, cancer, stroke,  chronic obstructive pulmonary disease and diabetes —  are directly linked to unhealthy lifestyles.  Clearly, encouraging healthful habits presents an opportunity to improve employees’ well being, reduce  the need for health care services and help control costs.

Offering worker wellness benefits — large or small — represents an intersection between organization  social responsibility and responsibility to stakeholders. Between worker health and corporate health.  It’s often the right thing to do for employees and corporations.

Research by Traveler’s Corp. shows a $3.40 return for every dollar invested in Employee Wellness  Programs. For many corporations, the choice to offer worker wellness benefits is easy—one where  conscience and pragmatism align.

The challenge arises in selecting the initiatives that will deliver the most impact based on trends in  your employees’ health risks and medical claims costs. From large corporations to the corner deli,  employer owners welcome ways to boost productivity, reduce absenteeism and cut costs. Likewise,  Employee Wellness Programs can range from modest to elaborate.

In deciding where to focus a employer’s limited resources, looking at benefits, costs and best  practices is a good starting point. This section profiles six aspects of wellness and explores their  benefits to employees and corporations.