Posted by Health Handouts | Posted in Health Handouts, Health Tips | Posted on 27-06-2009
Worksite Health Promotion Programs first became popular during the economic boom of the late 1980s and early 90s. Programs featured on-Site health clubs and massages, and were used as recruitment tools for young employees searching for nontraditional work environments. Still, when the tech bubble burst, so too did the willingness to spend money on perceived perks, and companies returned to a more antiquated benefit structure focused on managed healthcare.
In recent years, as Healthcare costs have spiraled out of control, businesses have explored the potential of Company Wellness Programs as a cost-saving strategy. Companies such as Johnson and Johnson, General Motors, Motorola and Union Pacifi c Railroad have all seen a signifi cant return on investments in employee health (See Case Studies, p.20). Company Wellness Programs can help decrease the costs associated with:
Health Care premiums – The cost a employer pays for health insurance: According to a 2005 study by Hewitt, the Health Care cost per employee in the U.S. in 2006 will average $8,046, with companies absorbing nearly two-thirds of that cost.
Prescription costs – The price of a drug plan: According to a 2005 study by Mercer, the average annual drug costs for big organizations grew 11.5%, making it nearly a decade straight of double-digit rises in cost.
Short-term disability (STD) – The price of offering short-term disability insurance to employees: According to a 2004 study by insurance provider Cigna, the average short-term disability claim results in $13,094 in direct disability payments and medical costs. The report also found that 26% of claims related to health care events were a result of chronic conditions that could likely be mediated through Worksite Health Promotion Programs, and that these cases amount for 56% of the STD-related medical costs.
Absenteeism – The cost of missed work: Absenteeism cost companies $660 per employee in 2004, with nearly one-third of companies characterizing the trend as a genuine problem.
Presenteeism – The price associated with workers who work at decreased productivity levels: Sixty% of the total cost of employee illnesses come from presenteeism, according to a 2004 study by the Institute for Health and Productivity Studies at Cornell University.
The evidence is clear that strategically designed Company Health Promotion Programs can decrease both direct and indirect Medical Care costs. A 2004 review of Company Health Promotion Programs revealed that, in total, an investment of $1 by a company in Wellness Programming returned a median cost savings of $2.05 to $4.64.