A decade ago, the topic of workforce health and wellness might have elicited a head tilt and a puzzled expression from employers who were unclear how useful such a program would be in controlling healthcare costs. Over the years, sponsors of group health insurance have been hit with escalating claims for chronic diseases such as obesity, diabetes, hypertension and heart disease, as well as reduced workforce productivity due to illness and absenteeism. Group employee benefits budgets are at full capacity, so employers have started to embrace wellness and disease management programs to control costs.
It’s no secret that lifestyle choices impact employees in the workplace. The Centers for Disease Control and Prevention (CDC) identify four behaviors—inactivity, poor nutrition, tobacco use and frequent alcohol consumption—as primary causes of chronic disease in the United States. These behaviors lead to a higher prevalence of diabetes, heart disease, and chronic pulmonary conditions, according to the CDC. A review of your claims data can illustrate the incidence of lifestyle-related diseases within your workforce as well as their impact on your healthcare costs. If you don’lt already have a health and wellness program in place and your employee population suffers from “the big four behaviors,” a review of your claims is likely to spawn a sobering realization.
Wellness and disease management programs that target these lifestyle choices can have a significant impact on the health of your employee population (and the amount of health insurance claims). How significant? The cost-reduction potential is large for employers with well-established health and wellness strategies in force. The Journal of Occupational and Environmental Medicine reports than an effective workplace wellness program can reduce average annual healthcare costs per working-age adult by 18.4 percent. But here’s the caveat: Savings increase over the long term and only if eligible employees participate.
One could speculate that the authors of the Patient Protection and Affordable Care Act (PPACA) read similar studies because they have emphasized disease prevention by writing greater incentives for health and wellness programs into the new law. In addition, PPACA provides funding for wellness initiatives for private and government employers. Businesses with fewer than 100 employees that did not have a wellness and disease management program in place prior to PPACA will be eligible for a grant to start a program. The CDC is slated to offer technical assistance to employers, regardless of size, to train their staffs how to evaluate their existing wellness programs. While it isn’t clear when CDC resources will become available, it’s apparent the government is getting more serious about supporting workforce health and wellness programs.
More and more employers are getting serious, too. According to the Kaiser Family Foundation’s Annual Survey of Employer Health Benefits, 71% of U.S. employers now offer wellness programs, such as weight loss, smoking cessation and gym memberships. Incentive-based health and wellness programs that impose financial penalties on employees who do not participate or fail to meet health goals are also on the rise. Health goals can include reaching a certain Body Mass Index, or cholesterol, blood glucose or blood pressure level. Recent changes enacted by PPACA give employers the power to raise the amount of financial incentives linked to the achievement of certain health goals.
This shift to proactive disease management and prevention will be listed among group employee benefits “best practices” in 2014 and beyond. These programs will create a completely different emphasis in which health risk assessments, biometric screenings and employee education and communications will move to the forefront of HR focus. Getting in front of obesity, smoking, physical inactivity and other challenges that plague your workforce today can position your business for dramatic healthcare cost savings now and in the future.