Your Employees' Health is Your Business

Most people are rightfully touchy about having their employers get involved in their private affairs. But there should be one large exception to this compartmentalization of office and the rest of life — health. With rates of costly chronic disease and obesity spiraling ever higher, companies that do not help their workers get and stay healthy are paying a very high price.

Almost 60 percent of U.S. residents under age 65 are covered by employer-sponsored health insurance. Consequently, employers, who finance the lion’s share of the nation’s health care costs, pay a "triple health tax": first by shelling out for employee health benefits; next, by subsidizing Medicare and Medicaid through higher medical fees paid by private insurance; and finally, by subsidizing the uninsured through increased health insurance premiums.

In an attempt to reduce that financial burden, 67 percent of U.S. employers provide workplace wellness programs, according to an annual survey by the Kaiser Family Foundation. The Affordable Care Act should soon lead to an even higher adoption rate, as it authorizes grants to small businesses that launch comprehensive wellness programs by 2015.

Beyond the grants, however, wellness programs unquestionably make business sense. A 2010 study published in Health Affairs found that medical spending falls by $3.27 for every dollar spent on promoting employee wellness, while the cost of absenteeism drops by $2.37 per each wellness dollar spent.

The problem is the lack of data to determine which programs are most effective. . But best practices can only be established if corporations commit to rigorously measuring their wellness efforts, and results.

Certainly, the days when companies could get away with offering little more than an office smoking restriction or a salad bar alongside the burgers and fries in the cafeteria are long gone. Consider that 75 percent of total U.S. health spending today is spent on people with chronic diseases such as diabetes and high blood pressure, according to the Centers for Disease Control and Prevention. Just four risky behaviors are responsible for the bulk of that chronic disease burden — tobacco use, poor nutrition, lack of physical activity and excessive alcohol consumption. Ideally, any workplace wellness plan would encompass interventions that can address all four.

Companies are already trying out such disease prevention measures as health fairs to check blood pressure, bone density, and cholesterol levels; or they are offering financial rewards to employees who walk or cycle to work. Some companies extend wellness plans to spouses and children, because they’ve discovered that making health a family affair can be just the prod staff members need to adopt healthier lifestyles.

IBM is a good example. The cost of providing health insurance and other health benefits for IBM’s 434,000 employees total some $2 billion a year. The company pays out incentives of up to $300 a year to staffers who make healthy lifestyle changes, and offers a broad range of wellness initiatives, from smoking cessation programs to insurance rebates for participating in physical activity and preventive care, to employee health education programs.

IBM also stands out for rigorously measuring and analyzing the effectiveness of its programs. The computer giant determined that it spent $79 million on employee wellness programs between 2004 and 2007 — and saved $191 million. Johnson & Johnson, with a comprehensive wellness program in place since 1995, also has well-documented payoffs. By offering a broad range of programs such as smoking cessation classes, online weight management tools, on-site fitness centers and incentive discounts on insurance premiums, J&J says it has saved $250 million in health care costs over 10 years. Those kinds of numbers can convert a lot of skeptics.

To achieve such savings, comprehensive initiatives are required, as is the robust support of top management. Above all, employers need to build wellness programs based on measurable evidence. Cold, hard data on the success, or failure, of a wellness program, derived from credible and transparent measurements will not only increase staff morale and quantify the value of their personal investment, it will also generate a trove of information that can and should be used by employers to extract reduced insurance rates.

The business incentive for a press towards wellness is already well-quantified: On a per capita basis, America’s annual $2.8 trillion health care bill is double what most industrialized countries pay. In these tight economic times, investing in wellness is one of the smartest business decisions a company can make.

Risa Lavizzo-Mourey, MD, MBA, is president and CEO of the Robert Wood Johnson Foundation, the nation’s largest health philanthropy