Research

Exercise reduces weight, lowers risks of heart attack and stroke, helps to control blood pressure and diabetes, and improves mood. Studies increasingly show that physical fitness may also help reduce the occurrence of certain types of cancer. Researchers at the Centers for Disease Control and Prevention (CDC) recently documented another major advantage: physical fitness improves the health of the nation’s medical care expenditures.3 According to the CDC, physically active individuals incur $865 less per year in medical costs than inactive employees.

One study reports that obesity raises healthcare costs by 36 percent and medication costs by 77 percent.

Michigan officials estimate physical inactivity cost the state nearly $8.9 billion in 2002, a cost estimated to be largely borne by organizations through insurance premiums and lost productivity.

The not-for-profit National Committee for Quality Assurance reports that the estimated average cost for postnatal care for women who did not receive prenatal care was $2,341 more than for women who had. And the indirect costs of unhealthful behavior can be just as high.

Research by Traveler’s Corp. shows a $3.40 return for each dollar invested in Workplace Wellness Programs. For many organizations, the choice to offer worker wellness benefits is easy—one where conscience and pragmatism align.

A survey done by Medstat, published in the January 2002 issue of the Journal of Occupational Medicine, concluded that medical claims costs for Johnson & Johnson Inc. employees dropped an average of $225 per year after the company started its wellness program in 1995.

Providence Everett Medical Center, a member of the Wellness Councils of America, in Everett, Washington, saved an estimated 3 million or a cost-benefit ratio of 1 to 3.8 over 9 years of an outcomes-based employee health benefit program called the Wellness Challenge®. By offering financial incentives ($250 – $325) to employees who meet specific organizational and employee health initiatives the program continues to meet cost containment expectations in the area of healthcare use, sick time, injuries, while improving health habits and self-care practices. During the first 4 years of the program there was a 28% average reduction in healthcare utilization compared to nine other Providence hospitals that were used as a control group.

Du Pont saw that each dollar invested in workplace health promotion yielded $1.42 over two years in lower absenteeism costs at Du Pont Co. (Well Workplace Gold in Delaware). Absences from illness unrelated to the job among 45,000 blue-collar workers dropped 14% at 41 industrial sites where the health promotion program was offered, compared with a 5.8% decline at 19 sites where it was not.

The Travelers Corporation claims a $3.40 return for every dollar invested in health promotion, yielding total corporate savings of $146 million in benefits costs. Sick leave was reduced 19% during the four-year study. In addition to improving the overall health of 36,000 employees and retirees by reducing poor health habits and increasing good ones, The Travelers realized cost savings by decreasing the number of unnecessary visits to a doctor and emergency rooms. In a similar but smaller study, members of a Travelers fitness center were absent from work significantly fewer days than nonmembers.

The Stay Alive & Well program at Reynolds Electrical & Engineering Company, based in Las Vegas, cost $76.24 per employee during the two years it has been in operation. Over half of the 1,600 employees participated (with up to 80% participation rates in the intervention program). Participants significantly lowered cholesterol levels, blood pressure, and weight and experienced 21% lower lifestyle-related claim costs than non-participant. Resulting savings: $127.89 per participant with a benefit to cost ratio of 1.68 to 1.

Superior Coffee and Foods, a Bensenville-Illinois-based subsidiary of Sara Lee Corporation, attributes impressive results to the success of the company’s comprehensive wellness program. Superior showed 22% fewer admissions to a hospital, 29% shorter hospital stays, and 42% lower expenses per admission when comparing costs for this division’s 1,200 employees with costs for other divisions. Long-term disability costs were down by 40%. Superior Coffee and Foods has earned WELCOA’s Well Workplace Gold award.

With medical costs per employee at $6,000, nearly twice the national average, Union Pacific Railroad introduced the concept of personal health management to its 28,000 employees, mostly union and blue collar, in 19 Western and Southern states. Beginning with a modest medical self-care initiative at an annual cost of $50 per person, the program achieved a net savings of $1.26 million. In addition, a voluntary program to help employees lower health risks projected a cost-benefit ratio of 1 to 1.57 after one year. Employees in a treatment group lowered their risk of high blood pressure (45%) and high cholesterol (34%); others moved out of the at-risk range for weight problems (30%); and 21% stopped smoking.

Average medical costs of high-risk Steelcase employees–those whose lifestyles include two to four health risks such as smoking, little exercise, overweight–are 75% higher than those of low-risk employees. But high-risk employees at this Grand Rapids, Michigan-furniture manufacturing company who improved their health habits through the company’s health promotion program and became low risk cut their average medical claims in half thus lowering their medical insurance costs by an average of $618 per year. If all high-risk employees (20% of the total employee population) in one location changed their lifestyles to become low risk, the projected savings could total $20 million over three years.

Employees at Berk-Tec, a small manufacturing company in Lancaster County Pennsylvania, learned self-care techniques and lowered their company’s health care costs in one year. By using a self-care guide, the 938 employees and their family members made smart medical decisions and saved $21.67 per employee and dependent?a nearly 18% reduction in costs. By combining reductions in doctor visits and emergency room use, the company saved $39.06 per employee a 24.3% decrease in costs over the previous year.

A medical claims-based study of 72,000 people insured through 285 Wisconsin school districts found a lower demand for medical services among those with access to disease prevention and self-care programs. Reductions in medical services results in savings for the Wisconsin Education Insurance Group of as much as $4.75 for each $1 spent, higher savings were found in the group receiving access to a 24-hour phone-based nurse advice line, a self-care reference book, and health education materials.

CIGNA’s Healthy Babies prenatal program delivered an average savings of $5,000 per birth by providing expectant mothers with educational materials and rewarding early and regular prenatal care. And 80% of participants had normal births without complications compared with 50% for non-participant. CIGNA is a member of the Wellness Councils of America.

With savings estimated to be as high as $8 million, the California Public Employees’ Retirement System sent its 55,000 retirees a health risk appraisal followed, in some cases, with individualized reports and letters and self-care materials to encourage change and help reduce health risks among retirees and at the same time reduce the health care claim costs. In another study, Bank of America retirees in California who chose the full health promotion and demand reduction program showed a decrease in total direct and indirect costs of 11% compared with an increase of 6.3% for those who completed only a simple health questionnaire.

With lower health care claims, medical costs decreased 16% for employees in the City of Mesa (Arizona) who participated in the comprehensive health promotion program. The city realized a return of $3.60 for every dollar invested in the health of city employees.

To prevent back injuries among its employees, a county in California targeted white- and blue-collar workers, offered classes and fitness training. As a result, there was a significant increase in employee morale, reduced worker’s comp claims, medical costs and sick days related to back injuries producing a net cost-benefit ratio of 1 to 1.79.