Posted by Health Wellness | Posted in Health And Wellness In The Workplace | Posted on 30-06-2009
Corporate Health Promotion Programs first became popular during the economic boom of the late 1980s and early 90s. Programs featured on-Site gyms and massages, and were used as recruitment tools for young workers searching for nontraditional work environments. However, when the tech bubble burst, so too did the willingness to spend money on perceived perks, and corporations returned to a more traditional benefit structure focused on managed medical care.
In recent years, as Medical Care costs have spiraled out of control, corporations have explored the potential of Corporate Health Promotion Programs as a cost-saving strategy. Organizations 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). Corporate Health Promotion Programs can help reduce the costs associated with:
Health Care premiums – The cost a corporation pays for health care insurance: According to a 2005 study by Hewitt, the Health Care cost per employee in the United States in 2006 will average $8,046, with companies absorbing nearly two-thirds of that cost.
Prescription costs – The price of a prescription drug plan: According to a 2005 study by Mercer, the average annual prescription drug costs for sizable businesses grew 11.5%, making it nearly a decade straight of double-digit growths in cost.
Short-term disability (STD) – The price of offering STD insurance to employees: According to a 2004 study by insurance provider Cigna, the average STD claim results in $13,094 in direct disability payments and healthcare costs. The report also found that 26% of claims related to healthcare events were a result of chronic conditions that could likely be mediated through Workplace Health Promotion Programs, and that these cases amount for 56% of the STD-related healthcare costs.
Rates of Absenteeism – The cost of missed work: Rates of Absenteeism cost employers $660 per employee in 2004, with nearly one-third of employers characterizing the trend as a somber problem.
Presenteeism – The cost associated with workers who work at decreased productiveness levels: Sixty percent of the total cost of employee diseases 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 Workplace Wellness Programs can lower both direct and indirect Health Care costs. A 2004 review of Workplace Wellness Programs revealed that, in total, an investment of $1 by a business in Wellness Programming returned a median cost savings of $2.05 to $4.64.