Employee Wellness Programs are proven to improve productivity and decrease
health care costs. For a business, that makes a difference in the bottom-line.
Today, more than 81% of America’s businesses with 50 or more staff members have
some form of Employee Wellness Plan with the most popular being exercise, tobaccos
cessation classes, back care programs, and stress management. Most businesses
offer Employee Wellness Programs simply because they think the benefit is worth
the cost. Yet business leaders continue to ask themselves how to control huge
annual increases in medical insurance premiums and health care costs.
For many organizations, medical costs can consume half of business profits
or more. Some employer’s look to cost sharing, cost shifting, managed care plans,
risk rating, and cash-based rebates or rewards. But these methods merely shift
costs. Only Employee Wellness Programs stand out as the long-term answer for
keeping staff members well in the first place.
Employee Wellness Programs are an example of health care reform that works.
Results from America’s finest organizations, summarized here, are reason enough
to consider providing Employee Wellness Programs. This investment in your most
important asset – your staff members – can have a positive impact on your bottom-line.
Employee Wellness Plan Statistics:
Providence Everett Medical Center, a member of the Wellness Councils of America,
in Everett, Washington, saved an estimated 3 million or a cost-benefit ratio
of 1 to 3.8 over 9 years of an outcomes-based Employee Wellness Program. By
providing financial rewards ($250 – $325) to staff members who meet specific
organizational and staff member health initiatives the Employee Wellness Plan
continues to meet cost containment expectations in the area of health care use,
sick time, injuries, while improving health habits and self-care practices.
During the first 4 years of the Employee Wellness Plan there was a 28% average
reduction in health care utilization compared to nine other Providence hospitals
that were used as a control group.
Du Pont saw that each dollar invested in their Employee Wellness Plan returned
$1.42 over two years in reduced rates of absenteeism costs at Du Pont Co. (Well
workplace Gold in Delaware). Absences from illness unrelated to the job among
45,000 blue-collar workers dropped 14% at 41 industrial sites where the Employee
Wellness Plan was provided, compared with a 5.8% decline at 19 sites where it
The Travelers Corporation claims a $3.40 return for every dollar invested Employee
Wellness Programs, yielding total business savings of $146 million in benefits
costs. Sick leave was reduced 19% during the four-year study. In addition to
improving the overall health of 36,000 staff members and retirees by reducing
poor health habits and increasing good ones, The Travelers realized cost savings
by decreasing the number of unnecessary visits to a doctor and emergency rooms.
In a similar but smaller study, members of a Travelers fitness center Employee
Wellness Plan were absent from work significantly fewer days than non-members.
The Employee Wellness Plan at Reynolds Electrical & Engineering Company,
based in Las Vegas, cost $76.24 per staff member during the two years it has
been in operation. Over half of the 1,600 staff members took part in the Employee
Wellness Program. Participants significantly lowered cholesterol levels, blood
pressure, and weight and experienced 21% lower lifestyle-related claim costs
than non-participant. Resulting savings: $127.89 per participant in the Employee
Wellness Plan with a benefit to cost ratio of 1.68 to 1.
Superior Coffee and Foods, a Bensenville, Illinois-based subsidiary of Sara
Lee Corporation, attributes impressive results to the success of the organization’s
broad-based Employee Wellness Program. Superior showed 22% fewer admissions
to a hospital, 29% shorter hospital stays, and 42% lower expenses per admission
when comparing costs for this division’s 1,200 staff members with costs for
other divisions. Long-term disability costs were down by 40%.
With medical costs per staff member at $6,000, nearly twice the national average,
Union Pacific Railroad introduced their Employee Wellness Plan to its 28,000
staff members, mostly union and blue collar, in 19 Western and Southern states.
Beginning with a modest medical self-care initiative at an annual cost of $50
per person, the Employee Wellness Plan achieved a net savings of $1.26 million.
In addition, a voluntary Employee Wellness Plan to help staff members reduce
health risks projected a cost-benefit ratio of 1 to 1.57 after one year. Workers
in a treatment group reduceed their risk of high blood pressure (45%) and high
cholesterol (34%); others moved out of the at-risk range for weight problems
(30%); and 21% stopped using tobacco.
Average medical costs of high-risk Steelcase staff members- those whose lifestyles
include two to four health risks such as tobacco use, little exercise, overweight-
are 75% higher than those of low-risk staff members. But high-risk staff members
at this Grand Rapids, Michigan-furniture manufacturing organization who improved
their health habits through the company’s Employee Wellness Plan and became
low risk cut their average medical claims in half thus lowering their medical
insurance costs by an average of $618 per year. If all high-risk staff members
(20% of the total staff member population) in one location changed their lifestyles
to become low risk, the projected savings could total $20 million over three
Workers at Berk-Tec, a small manufacturing organization in Lancaster County
Pennsylvania, learned self-care techniques and reduceed their organization’s
health care costs in one year. By using a self-care guide, the 938 staff members
and their family members made smart medical decisions and saved $21.67 per employee
and dependent a nearly 18% reduction in costs. By combining reductions in doctor
visits and emergency room use, the organization saved $39.06 per employee a
24.3% decrease in costs over the previous year.
A medical claims-based study of 72,000 people insured through 285 Wisconsin
school districts found a reduced demand for medical services among those with
access to Employee Wellness Programs and self-care programs. Reductions in medical
services results in savings for the Wisconsin Education Insurance Group of as
much as $4.75 for each $1 spent, higher savings were found in the group receiving
access to a 24-hour phone-based nurse advice line, a self-care reference book,
and health education materials.
CIGNA’s Healthy Babies prenatal Employee Wellness Plan delivered an average
savings of $5,000 per birth by providing expectant mothers with educational
materials and rewarding early and regular prenatal care. And 80% of participants
had normal births without complications compared with 50% for non-participant.
With savings estimated to be as high as $8 million, the California Public Workers’
Retirement System sent its 55,000 retirees a health risk appraisal followed,
in some cases, with individualized reports and letters and self-care materials
to encourage change and help reduce health risks among retirees and at the same
time reduce the health care claim costs. In another study, Bank of America retirees
in California who chose the full Employee Wellness Plan and demand reduction
program showed a decrease in total direct and indirect costs of 11% compared
with a rise of 6.3% for those who completed only a simple health questionnaire.
With reduced health care claims, medical costs decreased 16% for workers in
the City of Mesa (Arizona) who took part in the broad-based Employee Wellness
Program. The city realized a return of $3.60 for every dollar invested in the
wellnss program for the city workers.
To prevent back injuries among its workers, a county in California targeted
white- and blue-collar workers, provided classes and fitness training. As a
result, there was a significant rise in staff member morale, reduced worker’s
comp claims, medical costs and sick days related to back injuries producing
a net cost-benefit ratio of 1 to 1.79.
Employee Wellness Programs: Savings
Employee Wellness Programs offer Long-Term Savings
Employee Wellness Programs, according to an article in Crain’s Detroit
Business, come in two varieties: Employee Wellness Programs or Health Insurance
products that aim to lower costs if healthy habits are followed. Both options
are a good choice, but only one will really offer long-term medical benefits
for your workers and lower costs over the years.
Employee Wellness Programs offer Assistance
Insurance-based products offer workers the opportunity, according to the article
by Jay Green, to save money on their premiums if they follow certain steps,
including performing an internet-based health assessment, visiting their doctor,
and agree to adopt a healthy lifestyle. These plans usually involve one coach
call to the staff member during the first 90 days. We wonder if these brief
wellness encounters will actually change a person’s lifestyle.
It is the overall change in a person’s lifestyle, as well as disease
prevention that will lead to lower medical cots in the future.
Employee Wellness Programs offer convenient health risk assessments and health
screening for things like diabetes, cholesterol and blood pressure. As the article
notes, these have initial start-up costs, but the savings accrue over time and
workers are more likely to stay active in an workplace staff member Wellness
Employee Wellness Programs Get Results
Finally, the article notes that businesses with an effective Employee Wellness
Plan can expect to see “500 percent lower absenteeism, 400 percent fewer
disability claims, and 350 percent lower health care costs.” These are
numbers that are very hard to argue with.