Mountain Home Athletic Club

Preventable medical problems are costing businesses billions of dollars a year in lost productivity and increasing medical and insurance fees.  A recent article in USA today, highlighted the growing epidemic of obesity and how it’s affecting corporate America. “Obese employees have much higher weight-related medical expenses and miss more work than their colleagues who maintain a healthy weight, a study shows. It places the annual cost at an additional $460 to $2,500 per obese person”.

As of 2005, obesity causes more health problems than smoking, heavy drinking or poverty, combined. Obesity directly costs U.S. companies more than $13 billion annually in medical fees and lost productivity, and accounts for 39 million lost workdays each year. These costs are projected to skyrocket in the coming decade, as our working population continues to age and as the growth in obesity continues on its relentless march. Employers bear the vast majority of these increasing costs.  In addition to the higher costs, being obese also increases the risk factors for 13 different diseases, from diabetes and high cholesterol, to coronary heart disease, and stroke.

The good news is that employers have the power to control these spiraling costs by offering programs at work that are easy to implement, effective, and convenient for their employees. Health improvement programs address more than just weight, by having a positive effect on productivity, employee-moral, employee-turnover, team work, and employee culture. Employers and insurers have a vested interest in helping their workers manage their weight and adopt healthy lifestyles through resources and education. Most are looking beyond the traditional illness based care that has failed us in the recent past, and opting for more proactive counseling and tools to help prevent these problems before they can develop into full fledged illness.

Mountain Home Athletic Club can help your employees build a healthy lifestyle that includes fitness and good nutrition.  Take a moment to review some additional benefits of implementing a corporate wellness program at your business.  When you’re ready, contact the Mountain Home Athletic Club at 870-425-4342 and ask for Jerry McDonald.

Why should your company offer a wellness program?

• Lower Health Care Costs
• Reduced Absenteeism
• Higher Productivity
• Reduced Use Of Health Care Benefits
• Reduced Worker's Comp/Disability
• Reduced Injuries
• Increased Morale and Loyalty

Health Care Expenditures

• Preventable illness makes up approximately 80% of all illness and 90% of all healthcare costs.
• Preventable illnesses account for eight of the nine leading categories of death.
• The average cost of health care per person in the United States is approximated at $3,925 in 1997.
• Lifetime medical costs average approximately $225,000 per person.  

According to the Wellness Councils of America, more than 81% of businesses with 50 or more employees have some form of health promotion program—the most popular being exercise, stop-smoking classes, and stress management. Most employers are offering wellness programs to offset the rising costs of health care. Yet many business leaders continue to ask themselves how to control massive increases in annual insurance premiums and health care costs.

For many companies, medical costs can consume half of corporate profits—or more. Some employers look to cost sharing, cost shifting, managed care plans, risk rating, and cash-based rebates or incentives. But these methods merely shift costs. Only health promotion stands out as the long-term answer for keeping employees well in the first place.

Wellness is health care reform that works. Results from North America's finest companies, summarized here, are reason enough to think about an investment in your most important asset—your employees—and the impact this investment can have on your bottom line.

Reduced Absenteeism

Reports show that healthier employees spend fewer days away from work due to illness, saving the company thousands and even millions of dollars on down time and temporary help.   Wellness programs can also help alleviate depression and help employees manage their time and stress levels better, all of which are contributing factors to missed work days. 

In one study, members of a Travelers fitness center were absent from work significantly fewer days than nonmembers and in another four year study, sick leave was reduced19%.

At DuPont, each dollar invested in health promotion yielded $1.42 in lower absenteeism costs over a 2 year period.

Johnson and Johnson reduced their absenteeism rate by 15% within two years of introducing their wellness program. They also cut their hospital costs by 34% after just three years.

Northern Gas Company employees who participate in the company's corporate exercise program take 80% fewer sick days than non-exercising employees.

Coors has saved over $2.3 million in lost wages due to absenteeism and $1.9 million in rehabilitation costs and cost avoidance.

Reduced Health Care Claims

The average annual health care cost per person in the United States far exceeds $3,000.  And preventable illness makes up approximately 70% of the total costs of illness. Because much of these costs are linked to health habits, it is possible for employers to take aggressive action toward reducing health care utilization and containing costs by implementing a health promotion program.

         Yearly Claims Costs of an Unhealthy Employee

It costs employers an average of $1500 MORE per year to insure an obese employee than it does someone of average weight.  This includes medical services, expenses, premiums etc… The total cost for employees in categories listed above is assumed to be even higher when other factors such as absenteeism and productivity are taken into account.

Sony Corp. of America analyzed claims data from 1988 to 1990 and found that 50% of its indemnity plan costs were incurred by employees with medical conditions that were lifestyle-related, or that could be changed.

Waste Management, Inc. implemented a pilot, stress management program for employees and their families; it reduced the total number of claims for the company and resulted in estimated savings of between $3,750 and $15,000 per participant, per year.

As the result of a pilot program at Honeywell, Inc. which offered a $200 cash incentive based on participation in a wellness program from a local health club, program coordinators estimated a 70% to 150% return on investment from reduced medical claims alone.

A 1992 analysis of the employees of GE Aircraft showed that medical claims submitted by the company's fitness center members decreased by 27%, while claims made by non-members actually rose by 17%.

At the Westinghouse Electronic Assembly Plant, workers who participated in a local fitness program cost the firm approximately $1,715 less than workers who did not participate.

Other studies show that employees who exercise as little as once a week incur healthcare costs that are one-third to one-half lower than those who don't.

Reduced Employee Turnover

Company sponsored wellness programs send a clear message to employees that management values them and their well-being.  Secondly, healthy employees tend to be happier and not as restless to leave. The healthier and happier the work force, the less a company has to spend on hiring and training new personnel.

The annual turnover rate for wellness program participants of the Canada Life Assurance Company of Toronto was 1.8%, compared to the company-wide average of 18%.

British Columbia Hydroelectric's wellness program participants had an annual turnover rate of 3.5%, compared to a company-wide average of 10.3%.

A study at Tenneco found that employees who participated in a fitness program had a much higher probability of continued employment than non-participants.

Improved Productivity and Morale

As businesses continue to streamline their resources, worker productivity becomes a key success factor.  Although not as easy to measure as a reduction in healthcare costs, improved employee productivity and morale can have a considerable impact on an organization and its profitability. Corporate wellness programs play a key role in maintaining and improving productivity and employee morale.  

Union Pacific Railroad found that 80% of its workers believed that the company's exercise program helped to increase their productivity and 75% felt that regular exercise was helping them to concentrate better at work.

A NASA study reported a 12.5% increase in productivity in their fitness program participants versus non-participants.  They also found that participants were able to improve their work performance as well as enhance their concentration and decision-making powers.

A study by Saatchi & Saatchi Advertising revealed that 63% of the employees enrolled in the company's fitness program believed that it improved their productivity; 75% said that it boosted their morale.

Overall Return on Investment

Since 1980 there have been over 50 studies of comprehensive worksite health promotion and disease prevention programs.  Every study has indicated positive health outcomes.  And of the more than 30 which were analyzed for cost outcomes, 29 proved to be cost effective. 

IRSA, the Association of Quality Clubs –1992
Employee Benefit News, May 1997

References

The New England Journal of Medicine, (July 29), 1993.
The New England Journal of Medicine, (January 7), 1999.
The New England Journal of Medicine, (January 21), 1999.
Center for Disease Control (CDC) - HEALTH STATISTICS (July 26), 2000.
Wellness Councils of America.