Well-being as a business strategy

Where do the healthcare dollars go?

Health care costs in the U.S. have increased from $1,100 per person in 1980 to $7,900 in 2009. Currently, $1.5 trillion, 75 percent of all health care spending, is spent on treating chronic diseases that are often preventable . Ninety-nine percent of all Medicare dollars spent are linked to chronic diseases. Obesity and complications (diabetes, cancer and heart disease) are responsible for an estimated $147 billion annually. Health care reform must address coverage for all Americans while dramatically reducing costs. If the situation is not addressed, American companies cannot compete in the global marketplace, raise taxes and undermine our economy.

More than 130 million Americans suffer from chronic diseases and millions of lives are cut short unnecessarily. The Partnership for Prevention report claims that better use of just five preventive services could save more than 100,000 lives annually. Eliminating just three risk factors – poor diet, inactivity and smoking – would prevent 80 percent of heart disease, stroke, type 2 diabetes and 40 percent of all cancers in the US

The greatest public health threat our nation has ever faced

A recent study conducted by Emory University revealed that obesity is the fastest growing public health challenge our country has ever faced. The Center for Disease Control (CDC) attributes the problem to environments that promote increased food intake, unhealthy foods and physical inactivity. Obesity is defined as having a body mass index (BMI) of 30 or higher, which is calculated by dividing weight in kilograms by height in meters squared. For those of us who haven’t memorized the metric conversions and can’t do the calculations in our heads, the US National Institutes of Health has an online BMI calculator.

The obesity rate has increased from 12 percent in 1989 to 28 percent in 2010. If the current trend continues, half of the adult population will be obese by the year 2020. 21 percent of the country’s direct health care spending) unless the current trend is halted (The future costs of obesity, 2009). The 2009 Report on Obesity in America, prepared by the Trust for America’s Health and the Robert Wood Johnson Foundation, indicates that obesity increased in 23 states between 2008 and 2009 and did not decline in any state. 30 percent (obesity rates continue to rise, 2009). Dr. David L. Katz, director of the Yale University School of Medicine Prevention Research Center, said, “It really is a first-class public health crisis, driving many of the trends in chronic disease, particularly the ever-rising rates of diabetes.” (The Future Cost of Obesity, 2009).

According to the New England Journal of Medicine, smoking rates have dropped 20 percent over the past 15 years. Unfortunately, any health benefits we should be realizing from the reduction in smoking have been negated by the obesity rate which has increased by 48 percent over the same period (Mertens, 2009). What should we conclude? As a nation, we have addressed smoking as a threat to public health. The numbers speak for themselves. We can do the same with the obesity epidemic.

Reverse the trend

Raising public awareness of the seriousness of this threat is a starting point, but it is not enough to initiate change. Reversing the trend will require a large-scale national campaign with evidence-based approaches. While there is no specific template for designing health initiative programs, successful programs involve community, schools, health care systems, and workplace intervention. The Partnership to Fight Chronic Disease (PFCD) suggests that the following five elements are essential:

  • Breaking down barriers and empowering Americans to take control of their health
  • Educating Americans to view obesity as a serious medical condition that is life-threatening
  • Ensuring that the fear of the stigma of obesity does not overshadow the need to fight it
  • Redesigning our healthcare system to treat obesity as a preventable medical condition
  • Engaging employers and communities to get them invested in promoting well-being (the Lewen group, 2009)

Business necessity

The American workforce is truly the backbone of our economy. Employers are a critical part of the solution to the current healthcare crisis and obesity epidemic. Companies need strategies for developing sustainable, adaptable programs aimed at improving employee health and reducing costs. Human Resource professionals are in a unique position to serve as a catalyst in their organizations to train and support employees through programs that promote wellness. Well-designed wellness programs can play a vital role in cultural reform and turn the tide in the obesity epidemic.

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Sickness absence and presenteeism due to chronic illness adversely affect profitability. Nearly 80 percent of employees have at least one chronic condition and 55 percent have more than one chronic condition. Absenteeism is defined as missed work due to sick days. Presenteeism is defined as the loss of productivity due to employees reporting to work but being less productive due to illness. Lost economic output associated with absenteeism and presenteeism costs US companies $1 trillion a year (US Workplace Wellness Alliance, 2009). Wellness programs can improve staff morale, improve productivity, reduce absenteeism, attract and retain employees, reduce costs, improve employee safety, promote corporate image, and fulfill social responsibility.

Success stories

Many companies have led the way and are realizing a return on their investment in employee wellness programs. IBM saved $175 million by implementing wellness programs (Partnership for Prevention, 2007).

Lincoln Industries is a factory with 565 employees. They have a versatile wellness program that rewards behavior. One of the coveted rewards employees can aspire to is a three-day, company-funded trip to climb a 14,000-foot mountain peak in Colorado. Lincoln has reported annual savings of $2 million in health care costs. They spend about $4,000 per employee. In addition, employee compensation costs have been reduced by $360,000 per year. The ROI for this program is 5:1 (Design matters2010).

In 2005, the supermarket chain Safeway implemented their Healthy Measures program. They have made continuous improvements every year. Safeway’s plan takes advantage of a provision in the Health Insurance Portability and Accountability Act of 1996 that allows differentiation of premiums based on behavior. CEO, Steven Burd emphasizes that the key to successful planning is rewarding behavior. Safeway is committed to building a culture of health and fitness by addressing behaviors associated with chronic diseases such as smoking, obesity, blood pressure and cholesterol (Burd, 2009). During the four-year period following implementation, Safeway’s healthcare costs remained constant, while most U.S. companies saw a 38 percent increase in costs over the same four-year period. In addition to the Healthy Measures program, Safeway supports employee behavior by offering:

  • A state-of-the-art fitness center near Safeway’s headquarters
  • Free lunch in the company canteen for every eight visits to the gym
  • Subsidized cafeteria, which offers many vegetarian dishes
  • Portion size, calories, cholesterol and fiber reported for all prepared meals in the cafeteria (Rodman & Gathright, 2009).

Programs that combine a culture of wellness with incentives that reward healthy behaviors have proven far more effective than traditional wellness programs that have disappointing adherence rates. Price Waterhouse Coopers found that less than 15 percent of eligible employees enroll in traditional wellness programs. However, if they received some form of incentive, employees are two to four times more likely to enroll. In another study from Suffolk University, 73 percent of Americans surveyed would change their behavior if they could save money (Donnelly, 2009).

Are you leading change?

As with any change initiative, creating a culture of health and wellness for your organization will present unique challenges. However, the alternative is not attractive. Change is inevitable – growth is optional. Your organization will experience change, but the question is, are you at the forefront of leading positive change or responding to a crisis after it erupts? American business leaders should take the opportunity to instill a culture of health and wellness in their organizations, not only because it is socially responsible, but also good for the bottom line. Executives who display a strong vision and model desired behaviors will have a clear advantage over those who sit back and wait to see what unfolds.

Cited works

Burd, Steven A. “How Safeway Reduces Healthcare Costs.” Wall Street Journal, 12 June 2009. Web. January 8, 2010.

Design Matters: ROI for health promotion closely tied to evidence-based programming. Rep. Atlanta: Institute for Advances in Policy Solutions, 2009. Web. January 4, 2010.

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Donnelly, Julie. “Massaging Employee Health: Financial Incentives Change Behavior, Experts Say.” Boston Business magazine (2009).

The Lewin Group, comp. Keeping America Healthy: Essential Elements of Successful Programs. Rep. Partnership to Combat Chronic Disease, June 2008. Web. December 30, 2009.

Mertens, Maggie. “Obesity epidemic wipes out anti-smoking gains.” Weblog entry. NPR’s health blog. National Public Radio, Dec. 2, 2009. Web. January 11, 2010.

“Obesity rates continue to rise.” Forbes. HealthDay News, 1 July 2009. Web. 12 Jan. 2010.

Rodman, Juliet and Fiona Gathright. “Safeway’s Wellness Incentive Program.” Wellness Business Insights (January 6, 2009). Wellness business solutions. 6 Jan. 2009. Internet. 11 Jan. 2010.

Trott, Bill, ed. “More Americans Than Ever Are Obese: CDC.” Reuters. Thomson Reuters 2009, 8 Jul 2009. Web. January 11, 2010.

United Health Foundation, American Public Health Association and Partnership for Prevention. The Future Cost of Obesity: State and National Estimates of the Impact of Obesity on Direct Healthcare Costs. Rep. 2009. Printing.

American Partnership for Prevention. National Committee on Prevention Priorities. Prevention care: a national profile on use, differences and health benefits. Partnership for Prevention, 7 Aug. 2007. Web. January 5, 2010.

American Workplace Wellness Alliance. Partnership to fight chronic diseases. The burden of chronic disease on US business and competitiveness. By Kenneth E. Thorpe, PhD., Anthony C. Wisniewski, and Garry M. Lindsay. 2009 Almanac of Chronic Diseases, 2009. Web. January 10, 2010.