Comprehensive Wellness – A New Differentiator for the Healthcare Market June 2013
Overview A comprehensive wellness program (or a workplace wellness program) is typically an employment-based activity or employer-sponsored benefit aimed at promoting healthy behaviors (primary prevention or health promotion) and disease management in a better way (secondary prevention). A comprehensive wellness program needs to be part of an organization’s culture. It works like this: A wellness committee is to be formed, which is representative of the management and employees. The committee should be able to develop a mission and goals for the organization related to wellness, which can be incorporated into the organization’s overall formal goals and objectives. Wellness – not only physical but also including emotional and social dimensions – allows employees to function optimally. Need for Comprehensive Wellness Program1 About 51% decrease in overall productivity is correlated with poor health. Loss of employee activity due to health issues costs companies as much as USD225.8Bn annually, or USD1,685 per employee per year. Employers also incur costs associated with short- and long-term disability and Worker’s Compensation. According to the 14th Kaiser Family Foundation/Health Research and Educational Trust (Kaiser/HRET) Survey of Employer-Sponsored Health Benefits, average annual premiums in 2012 were USD5,615 for single coverage and USD15,745 for family coverage. As much as 90% of employers offer wellness incentives or financial rewards or prizes to employees who work towards getting healthier, according to a recent survey from Fidelity Investments and the National Business Group on Health. That’s up from 57% of companies in 2009. The perks are also worth more now: USD521 per employee on average, compared with USD260 four years ago. A healthcare differentiation: Benefits to Employers from comprehensive wellness programs Year-round comprehensive corporate wellness programs have shown savings-to-cost ratios of over USD3 saved for each USD1 invested. Savings are realized in the form of lower medical costs, lower absenteeism, lower worker’s compensation costs, lower short-term disability, and increased productivity.2 According to the American Journal of Health Promotion’s in-depth analysis, employers with work site health promotion programs see on average:3 26% reduction in health costs 27% reduction in sick leave absenteeism 32% decrease in workers’ compensation and disability claims 1
Minnesota Department of Health: About Workplace Wellness Infinite Health Coach: Benefits of Corporate Wellness Programs 3 HR Morning: Massive study shows true return on wellness plan investment 2
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Benefits to Insurers from comprehensive wellness programs Comprehensive wellness programs also provide benefits to health insurance carriers in some of the following ways: Greater opportunities for insurance firms’ branding activities Managing and improving risks associated with health insurance policies Managing health of policyholders, thereby managing claims costs and increasing profits Benchmark policyholders and employers based on the data collected during wellness programs Types of wellness activities – some examples:4 Health Risk Assessments – A questionnaire is used to assess an individual’s current health status and health risks. Biometric Screenings – They are mostly offered at health fairs, operated by a wellness vendor on behalf of an employer. Health Coaching – Coaching can be web-based, telephonic or in-person. Web-based coaching is the lowest-cost approach, and hence more prevalent, followed by telephonic coaching. Although most employers rule out in-person coaching because of costs, it is believed to be the most effective means of encouraging behavioral change. Behavior Modification Programs – Closely related to and sometimes integrated with health coaching, these programs are focused on improving health behaviors, such as tobacco cessation and weight management. Changes to the Work Environment – The easiest, most common steps taken by employers involve supplying nutritional information and offering healthier food choices in vending machines and cafeterias. Challenges in adoption of comprehensive wellness programs Wellness strategies are still underdeveloped Limited amount of fun to enhance greater participation Budget constraint for employers is prevalent in wellness programs Behavioral changes are required for adoption of such programs Time constraint for participating in wellness programs Wellness programs, which incorporate individual health risk assessments coupled with expanded chronic disease management programs, are the most effective means of achieving long-term healthcare cost containment. These solutions are not only limited to large-sized employers and but can also be incorporated by smaller and mid-sized employers.
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National Institute for Health Care Reform: Employer Wellness Initiatives Grow Rapidly, but Effectiveness Varies Widely
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