March 5, 2013
Workplace wellness programs can generate savings
As US health care costs have risen at an unsustainable rate, there remains much focus on how to effectively bend the cost curve and create more value from the dollars spent on healthcare.
With the majority of Americans receiving health insurance coverage through an employer-sponsored plan, employer groups in particular are demanding innovative approaches to reduce increases in premiums and employee out-of-pocket costs. Common strategies to shift costs by increasing employee cost-sharing mechanisms have been exhausted and so the need for value-based healthcare where there is a focus on improving health outcomes to reduce costs is dire.
In a 2009 report , the CDC stated that more than 75% of healthcare costs are attributed to diseases that are preventable through modifying behaviors such as insufficient physical activity and poor eating habits. This provides a perfect opportunity for employers to create a culture focusing on wellness and prevention through lifestyle behaviors that promote better health. A 2010 study by Baicker, Cutler, and Song published in Health Affairs reported that on average medical costs fell by roughly $3.27 for every dollar spent on wellness programs.
Amid soaring health spending, there is growing interest in workplace disease prevention and wellness programs to improve health and lower costs. In a critical meta-analysis of the literature on costs and savings associated with such programs, we found that medical costs fall by about $3.27 for every dollar spent on wellness programs and that absenteeism costs fall by about $2.73 for every dollar spent. Although further exploration of the mechanisms at work and broader applicability of the findings is needed,
this return on investment suggests that the wider adoption of such programs could prove beneficial for budgets and productivity as well as health outcomes.
This ROI on wellness is promising for fostering meaningful change in all stakeholders’ pocket books. Employer wellness solutions that can engage employees, and their families, in their everyday lives toward healthier behaviors leveraging the right incentives are sure to make a positive impact during this important time of transformation in healthcare.
Sources: CDC, National Center for Chronic Disease Prevention and Health Promotion, Improving the Quality of Life for All People. Chronic Diseases: The Power the Prevent, The Call to Control, 2009 – Baicker, Cutler, Song. Workplace Wellness Programs Can Generate Savings. Health Affairs. 29, no. 2. 2010: 304-311 and https://content.healthaffairs.org/
About the Author: Krista Burris is responsible for strategic business development for dacadoo in the US. Prior to joining dacadoo americas, Krista held positions at Aetna, most recently with their Accountable Care Solutions division as a Senior Sales Consultant. She has a strong focus around lifestyle and wellness promotion to make meaningful change in improving health outcomes. Krista holds a BA from UC Berkeley in Political Economy with a concentration on healthcare costs and resource allocation.