Wellness Initiatives Gain Momentum as Health Costs Increase in 2011

By Nicole Martin | December 19, 2010

As we move ahead into the new year, escalating health care costs continue to remain an issue of great concern for many organizations. Rising health care costs are inevitable as the total health benefit cost per employee has risen by approximately 6% annually for the past five years. And as the need to manage costs is vital, many organizations will be seeking ways to minimize these increases. Some employers will opt to increase deductibles and out-of-pocket limits and raise employee contributions. This does not, however, reduce the overall spending. It merely changes how the cost is apportioned between the employer and employee.

A recent Mercer survey suggested that many organizations will be looking to reduce health care cost increases by improving workforce health: 44% of employers surveyed indicated that they will add health management or wellness programs in 2011, and 38% will add incentives for employees to participate in health management programs already available to them. The survey also suggested that more employers will attempt to curtail health care spending through new or improved health management programs in 2011 than through higher deductibles or other cost-sharing provisions.

Effective workplace wellness or health management programs are beneficial to both the employer as well as the employee. These programs encourage employees to take steps to prevent the onset or worsening of a health condition, eliminate unhealthy behaviors and habits and promote the adoption of healthy lifestyles. While Wellness Programs have been around for years, the building costs of health care for employers will drive momentum for ROI in wellness.

Studies have shown that chronic illness, including obesity, heart disease and diabetes, account for three-quarters of health costs. It has also been found that the average diet is responsible for most of the preventable diseases such as obesity, diabetes, heart disease and colon cancer. Preventable illness accounts for the vast majority of medical visits and approximately 90% of all health care costs. Healthcare costs in the United States have doubled from 1990 to 2001 and are projected to double again by 2012.

For many employees, the encouragement of wellness can lead not only to better physical and mental health, but greater job satisfaction and a more positive mental outlook, increased stamina, lower levels of stress, an increased self-image and higher self-esteem.

Employers also benefit not just in terms of overall cost savings, but the increase in the health of the employees results in higher employee morale which in turn leads to increased job satisfaction and productivity and reduced absenteeism, turnovers and short-term disability claims. Research has also found that employees are more loyal to organizations with wellness programs. When designed and implemented properly it sends a message of “We Care!” A high quality wellness program can also be an employee recruitment and retention tool and will ultimately strengthen the organization’s values and corporate culture.

There are two types of wellness programs: Insurance-based programs that lower premiums if the employee agrees to certain lifestyle changes, and employer-based programs in which the employer is trying to change the lives of the employee for the better. No matter which program you choose it should be tailored to the needs of the workforce. Some of the standard elements include:

Health education and awareness
Weight loss
Nutrition
Fitness
Stress management
Smoking cessation
Alcohol and drug abuse counseling
Preventative education

The real challenge often is not offering a wellness solution but rather finding the right incentive that is exciting for the employees and encourages them to participate. The best place to start should be to survey the employees regarding their views on health and nutrition, exercise and fitness as well as their interest in participating in a health management program.

In order to truly be successful, programs must have the support of all levels of management, including executives, who must not only support the wellness initiative but set an example by being active participants. Other elements of successful programs include:

Using a coach, director, motivator or manager
Conducting annual on-site health fairs (including cholesterol screenings, blood pressure readings, health assessments, flu shots, etc.)
Publishing a wellness newsletter full of healthy living tips, wellness program news, aggregate employee health results
Developing a point system for the awarding of prizes (i.e. stress balls, water bottles, health food store gift certificates, gym memberships, personal trainer coupons, spa treatments, etc.)
Supporting community-based health programs
Beautification of work environments (i.e. gardens, quiet rooms, etc.)

The key in providing incentives is that they must motivate employees from the beginning and keep them actively involved by providing positive reinforcement for good behavior and ongoing participation. The most common mistakes organizations make that can derail a good wellness program include lack of employee interest, insufficient staff resources, inadequate funding, failure to engage high-risk employees and the inability to elicit the support of upper management. To provide health assessments with results is great, but to provide it without a plan on how to improve those results is another place where programs fail.

Workplace wellness programs are clearly a benefit to both employers and employees, and employers who value their employees should consider implementing a program in the coming year. It makes good financial sense and can result in a healthier work environment. The programs that engage employees emotionally as well as physically will be in demand.