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Two-thirds of more than 1,100 U.S.-based organizations surveyed have a benefits strategy promoting health and productivity, most commonly through wellness programs aimed at preventing chronic conditions such as heart disease and diabetes.
The amount of employers implementing specific wellness programs increased threefold from 2007 to 2008.
In 2008, for example, 46 percent are implementing smoking cessation programs. That’s up from 14 percent in 2007, according to Aon Consulting’s 2008 Benefits and Talent Survey.
The top five wellness programs being implemented in 2008:
The figures reflect employers’ recognition of the link between employee lifestyle behaviors and medical expenditures, according to Tom Lerche, Aon Consulting’s Health Care practice leader.
“Chronic conditions, for example, are influenced by smoking, obesity, poor nutrition and leading a sedentary lifestyle,” he said in a press release, “and account for more than 60 percent of health care costs.
“Through stress management, weight management and smoking cessation programs, employers can focus on the root causes of these chronic conditions to reduce health risk factors among employees and dependents, which lead to a lower rate of increase in health care costs.”
Employers are embracing wellness and health promotion programs for other reasons as well: as effective recruitment tools, a way to reduce disability costs and a way to reduce absenteeism, he said.
Investing in their employees by providing tools and resources to improve their health leads to a more productive workforce, according to Aon Consulting’s U.S. Health & Benefits practice director John Zern.
“This is a change from the traditional perspective of cutting medical program costs without regard to long-term impact or worker productivity,” he said in a press release.
About 75 percent of all medical expense is attributed to preventable disease, according to the Centers for Disease Control and Prevention (CDC). In 2001 the cost of health care in the United States was $1.4 trillion, it said, and it projects that cost to be $2.8 trillion by 2011.
One example of an employer rethinking its approach is Scotts Miracle-Gro. It was seeing increases to its health care costs that were “well above the national average” and had total costs approaching 20 percent of its net income.
It took aggressive action, Chairman and CEO James Hagedorn said during a keynote address April 23, 2008, at the World Health Care Congress in Washington, D.C.
That included investing in a $5 million wellness facility/fully staffed medical center/fully stocked pharmacy, changing its benefit plans to include a health coach program and conducting a health risk assessment to collect aggregate data.
Based on the assessments data, workers deemed “at risk” are enrolled automatically in the company’s health coach program. Those who don’t participate are levied a $70 monthly penalty.
The goal of the health coach program, Hagedorn said, is getting more employees “engaged in weight reduction and managing known risks, especially things like high blood pressure and high cholesterol” and its developing programs to help workers better manage stress—an increasing problem, according to its health assessment data.
While Scotts Miracle-Gro “made a strategic decision to begin employing more sticks than carrots,” such as penalizing workers financially for not undergoing employer-sponsored health risk assessments, Aon found that many employers have added incentives to motivate employees to participate in wellness programs.
According to its findings, 23 percent offer incentives to take health risk appraisals, and 20 percent provide incentives to complete health risk programs such as weight management and tobacco cessation. About 22 percent offer non-monetary awards such as gift cards and merchandise; only 10 percent of those surveyed offer a premium contribution reduction.
A majority of those surveyed don’t have a process to measure the impact of their programs or track return on investment.
“Tracking and benchmarking employee metrics must go hand-in-hand with implementing wellness programs and must be measured to determine the return on investment and changes in productivity,” Lerche said.
A University of Minnesota report found that despite the increase in scope and frequency of such programs in the United States, the results haven’t been as positive as studies documenting their impact suggest they should be, HR News reported June 27, 2007. That’s because they often are not comprehensive, are not long term, and are not marketed to people who could benefit the most, the report said.
Dr. Benjamin H. Hoffman, vice president and chief medical officer of Waste Management Inc., spoke of the failure of care management programs at the April 2008 World Health Care Congress in Washington, D.C.
While he believes offering programs that promote good health is “the right thing to do” and an employee engagement tool, “we’re just not seeing the results.”
That might be in part because more time is needed before the effects of wellness programs are seen—his conclusion is based on one to two years of data—but “the current disease management programs we have in place are not good,” Hoffman said, adding that his organization has a high turnover.
The University of Minnesota report noted that an organization with a high turnover may be less committed to making the investment in a wellness program.
Scotts Miracle-Gro’s Hagedorn is not sure when his company will see a return on its investment but believes it’s the answer to spiraling medical costs.
“Will it be three more years before our investment pays itself off, five more years? I don’t know,” he said. “But it’s obvious that this has to have a positive financial return.”
Kathy Gurchiek is associate editor for HR News. She can be reached at email@example.com.
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