QHS

What is the cost-to-benefit analysis of a Workplace Wellness Program?

This article from the Nutriscience Website

For many companies, medical costs can consume half of corporate profits or more. It is common now for employers to utilize cost sharing, cost shifting, managed care plans, risk rating, and cash-based rebates or incentives. However, these methods only shift costs. Workplace wellness promotion stands out as the long-term answer for keeping employees healthy and at less risk of disease.

Recently, public and private efforts and programs are increasingly designed to promote healthy behaviors. Employers are becoming more aware that overweight and obesity, lack of physical activity, and tobacco use are adversely affecting the health and productivity of their employees and ultimately, the business's bottom line. As a result, innovative employers are providing their employees with a variety of work-site-based health promotion and disease prevention programs. These programs have been shown to improve employee health, increase productivity, and yield a significant return on investment for the employer. For example, a recent review of health promotion and disease management programs found a significant return on investment for those programs, with benefit-to-cost ratios ranging from $1.49 to $4.91(median of $3.14) in benefits for every dollar spent on the program. Several major companies with award-winning cost-saving health promotion disease prevention programs include:

Not only do individual employees have the power to effect dramatic change in their personal health status, but also the health statistics of the nation.

Cost and Benefit Ratio of the EnergyFirst Wellness Program The benefits of the EnergyFirst program corporate clients have recognized include reduced sick days, fewer health care claims, as well as improved productivity, and improved morale and loyalty.

Cost of Absenteeism To consider the benefits of such a program, consider the affect on the cost of absenteeism for a company of 150 employees.

A recent survey showed that the average rate of absenteeism on any given day is approximately 2.5% i.e. approximately 4 employees absent out of 150 total employees

The cost of a sick day is calculated as (salary + 30% employer costs) divided by 240 working days

Let's assume the average wage in our example is $40,000 per year.

The employer's average cost of a sick day is calculated as: ($40,000 + $12,000) = $217 per day divided by 240.

Let's also assume there are 4 absences a day (per the aforementioned survey):

$217 X 4 = $868 per day X 240 (working days) = approximately $208,000 per year or $1,387 per employee per year, based on 150 employees.

The average cost of absenteeism is $1,387 per employee per year. Based on other company's previous experience with the program the anticipated reduction in absenteeism would be approximately 17.5%, amounting to savings of $243 per employee, per year.

Note: All figures are US-based and in US Dollars.

Read more

Ford Spends $2000 per car on employee health costs

Revealing statistics from Ken Pelletier, MD

Ken is a Clinical Professor of Medicine at the University of Arizona and UCSF. He is the Director of Corporate Health Improvement Programs (CHIP), working with Fortune 500 companies to bring integrative health concepts into the workplace to reduce medical care costs and improve employee productivity. Ken has been chosen by the Obama administration as a member of their health reform team. He has authored 14 books on integrative health, several of which are international bestsellers.

For the global Fortune 500, spending on health services will devour 80% of their corporate profits this year – and experts project that by 2011-2012 their health costs will be higher than after-tax profits. Managing corporate health costs will now determine which businesses survive – and which will not.

Take Ford Motor Company: every car that rolls off the assembly line has $2,000 in medical costs baked into it. Ford spends $100 million a year JUST ON BACK PAIN. And each car has $500 in back pain incorporated into its price tag.

Dr. Pelletier then reviewed case studies from his Corporate Health Improvement Program (CHIP, which has been going strong for 25 years), revealing that instituting corporate wellness programs delivers an average 3:1 ROI for companies. 74 of 75 of the worksite wellness program interventions resulted in positive clinical outcomes. He noted that, in fact, there is no larger body of scientific evidence for ANY medical approaches, than the body of evidence that already exists that mind-body approaches work, because they involve the active engagement of the individual in their own outcome.

One of Dr. Pelletier’s statements – that the spa and wellness industries have been FAR, FAR too conservative…far too passive and quiet about making valid, evidence-based claims that many of their core approaches really work, resonated as one of the most provocative statements emerging from the Summit. There are so many extraordinary opportunities to integrate spa and wellness into the medical industry – the industry can grab that banner – if we set about EARNING it through EVIDENCE.

From The Self Optima Blog