Health And Wellness In The WorkplaceHealth And Wellness In The Workplace

Over the past several years healthcare insurance costs have risen at a steady pace. This is taking a toll on the bottom-line of organizations, cutting into earnings, limiting growth and forcing a reevaluation of a once sacred employee benefit system. According to a projection by McKinsey & Co., at the present rate, by 2008 health benefits will eclipse earnings at the average Fortune 500 company.

Companies, through private healthcare insurance organizations, are the leading provider of medical services in the United States. In 2004, 59.8% of Americans were covered by a business-based healthcare insurance program, accounting for 88% of all private healthcare insurance. Yet the growing costs of Healthcare, ever-increasing drug prices and a steady rise in chronic illnesses have brought the corporate culture to a breaking point.

For many businesses the growing burden has become too difficult to carry. During the past five years health care insurance premiums have raised an average of 11.6 percent annually, more than four times the average rate of inflation and employee earnings over that time.3 Not surprisingly, this exponential growth in premiums has caused the number of businesses offering Medical Care services during that time to drop from 69 percent to 60 percent.4 In addition, in 2005,  health care insurance premiums jumped 9.2 percent, more than three times the rate of inflation – and that was the lowest increase in the past five years.

In this environment businesses need to find innovative ways to mitigate the increasing costs of Healthcare coverage. Seemingly, the easiest strategies to accomplish this goal would be to cut benefits coverage or pass on agrowing burden to staff members and retirees. Greater than 80 percent of businesses have chosen one or both of these options in the past few years and almost half of all sizable businesses are likely to increase the amount staff members pay in 2007.5

Nevertheless, these methods do nothing to mitigate the fundamental causes of increasing costs, one of which is a population that requires increased medical care. To make a lasting and meaningful influence on costs and overriding health, organizations need to look beyond a antiquated reactive-based approach.