Health and Wellness
U.S. health care costs constitute over $1 trillion, over
14%, of the gross national product. This came out to an
average per employee cost of $5800 in 2004. Costs are
expected to double to about $2 trillion by the year 2007. In
fact, over 50% of corporate profits now go for health care
costs versus only 7% three decades ago.
Companies are not passively accepting these
rising health care costs, and many have reduced benefit levels
as a way to deal with them. Typical reactions are to increase
employees’ deductibles and coinsurance out of pocket amount
and/or increase employee (particularly for dependants)
contributions toward premiums. These are superficial solutions
for the rising costs. They do not affect the actual cost.
Rather, they redirect the resources used for covering the costs
to the employee, in effect, reducing their actual benefit.
Scores of studies have documented
reductions in absenteeism and health care costs when health and
wellness programs have been implemented. There is also research
that quantifies the costs associated with employees who exhibit
unhealthy lifestyles. (See the table to the left.) For example, a study determined that for
every employee who had high cholesterol, the company paid $370
more per year in health care costs. Another company found, for every employee who
had hypertension, the company paid $327 more. Smokers cost the
company $285 more, etc. The bottom line is that
unhealthy employee lifestyles cost the company
more in health care costs.
The most effective tool for controlling health
care costs over the long run is with health and wellness
programs. Health and wellness programs not only improve claim
costs, but they also help employees feel better about themselves
and more positive about the organization they work for.
Please
follow the links at the top left and review some articles about
health and wellness or take the link to Web MD to research your
own questions.
Let us help you design your
health benefit plan's wellness initiatives!
