Wellness Forum

Managing Healthcare Costs

Preventable illnesses make up 70% of illness costs in the United States, and studies show that 75% of health care costs are preventable. Because employees with the highest number of preventable “risk factors” cost 8X more than low risk employees, it has become a goal of many companies to develop worksite wellness programs as a way of creating a healthier workforce.

Several industry studies have been successful at lowering medical and insurance costs for employees who participate in worksite wellness programs. Although the cost savings vary, it’s important to note that these programs, particularly programs involving exercise, benefit both the employee and the employer.

Managing Healthcare Costs Statistics

• Bank of America: For $30 per person, BofA conducted a health promotion program for retirees using a risk assessment questionnaire, self-care books and other mailed materials. Insurance claims were reduced an average of $164 per year in this group while they increased $15 for the control group. Since they were able to document significant changes in risk behavior, they anticipate greater savings in future years.
• City of Mesa, Arizona: With lower health care claims, medical costs decreased 16% for employees who participated in the comprehensive health promotion program. The city realized a return of $3.60 for every dollar invested in the health of city employees.
• Coca Cola: The company reported a reduction in health care claims with an exercise program alone, saving $500 per employee per year for the employees (60%) who joined their HealthWorks fitness program.
• Pacific Bell: FitWorks participants claimed $300 less per case for a one-year savings of $700,000. Savings for conditions related to a sedentary lifestyle are $722 per case.
• Prudential Insurance Company: The company's major medical costs dropped from $574 to $312 for each participant in its wellness program, annual medical costs fell by 46%.
• Steelcase: Average medical costs of high-risk employees - those whose lifestyles include two to four health risks such as smoking, little exercise, overweight - are 75% higher than those of low-risk employees. But high-risk employees who improved their health habits through the company’s health promotion program and became low risk cut their average medical claims in half thus lowering their medical insurance costs by an average of $618 per year.
• Superior Coffee and Foods: The company showed 22% fewer admissions to a hospital, 29% shorter hospital stays, and 42% lower expenses per admission when comparing costs for this division’s 1,200 employees with costs for other divisions. Long-term disability costs were down by 40%.

Sources:
Direct Laboratory Services, Inc.
St. Louis Business Journal
Wellness Counsels of America