WELLNESS CONNECTION · Medical

Smart Investment for Organizations: Health of Their Workforce

By Siobh�n M. Palmer, R.N., Director of Medical Operations

October 13, 2009 - 11:00AM

Even in the midst of this economic downturn, organizations in the know are still investing in wellness programs. Why is that? Positive return on investment. Research has shown that for every one dollar invested in wellness programs, the ROI is between $3 and $6.

Employers cannot afford to ignore the fact that 87.5% of healthcare claims costs are due to an individual's lifestyle¹. In the United States, where payroll is normally the highest expense an employer has, we face a trend of escalating healthcare costs. At some point, these costs could exceed payroll. This spiraling trend negatively impacts an organization's bottom line and the economy of the country as a whole, as companies continue to outsource labor and relocate to countries where healthcare is cheaper.

An organization's healthcare costs are not the only problem. Poor health reduces productivity due to absenteeism and presenteeism. (Presenteeism is the measure of lost productivity cost due to employees actually showing up for work, but not being fully engaged and productive mainly because of personal health and life issues). A study by JOEM (Journal of Occupational and Environmental Medicine) researchers found that four organizations spent $2.4 million total dollars on medical and pharmacy claims for common health conditions but the lost productivity costs were calculated to be $10.3 million (more than four times greater).

Today, more than 62% of America's businesses have some form of health promotion initiative, ranging from smoking cessation programs to onsite gyms, massage therapy and multiple online tools². For a wellness program to be effective, it has to be comprehensive and easy for employees to understand. The most successful wellness programs have an element of self-care in them. For example, educating employees on how to use online tools or directing them to nurse hotlines could help reduce unnecessary visits to the doctor or emergency room³.

The most important factors in facilitating wellness for employees are primarily education about lifestyle modifications and then providing tools to help them make change. A workforce that eats healthfully and exercises, not only reduces healthcare costs but increases employee morale, reduces workers' compensation claims, enhances employee loyalty and increases productivity.

What works when you are implementing a wellness program? Incentives work. Paying your employees to participate in wellness initiatives has shown to be very successful. Even small shifts toward healthy behavior can have a lasting and sustainable effect on employee longevity. Examples of ways to incentivize employees: reducing their insurance premiums for taking a personal health assessment or paying them cash to take nutrition or stress reduction questionnaires or to participate in chronic disease prevention classes. Why not reward your top performers by sending them on a wellness retreat? This helps them on a personal level, often causing them to become advocates for what they have learned when they bring the information back to your organization, positively influencing other employees.

When you are implementing a new wellness strategy, immersive off-site programs can be very beneficial for your key decision makers and those who are change catalysts within the organization. Wellness initiatives are most successful when the leaders in the company are on board and lead by example. Providing your leaders with a personal "Aha" experience and showing them the numbers that affect the organization's bottom line can really get the ball rolling. Companies that have successfully implemented these programs such as Motorola, Xerox, Citibank and Johnson & Johnson have already reported millions of dollars in savings due to decreased costs in expenses related to poor employee health⁴.

Footnotes

1. Indiana University-Purdue University, Fort Wayne (IPFW) Study, 2006
2. Society for Human Resources Management, 2006
3. 25% of doctors visits and 55% of ER Visits unnecessary. U.S. Department of Health and Human Services, 2006
4. Wellness Councils of America, The Cost Benefit of Worksite Wellness, 2002 and Journal of Occupational and Environmental Medicine, 1999

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