Wellness Program Incentives

The expenditures of health care have been rising more than 10 percent each year for several years. A substantial amount of the money invested in the health care system treats costly illnesses and diseases.

• Approximately 95 percent of the $1.4 trillion that we spend as a nation on health goes to direct medical services, while about 5 percent is allocated to preventing disease and promoting health.
• Potentially, 50 percent to 70 percent of all diseases are preventable as they are associated with modifiable health risks.
• In an effort to optimize employee health, cut preventable health care utilization and enhance work performance, and in turn decreased health care costs and improve employee satisfaction and retention, many corporations are planning, or are interested in planning, Corporate Health Promotion Programs for staff members.

The benefits of workplace wellness are well documented. More than 120 research studies repeatedly show themes such as improvements in health outcomes coupled with high returns on investment (ROI). Some primary findings include the following:

• Savings of $3.48 in reduced medical expenditures per dollar invested.
• Savings of $5.82 in cut absenteeism costs per dollar invested.
• ROIs of at least $3 to $8 per dollar invested within five years of program implementation.
• Lifestyle behavior change programs: $3 to $6 return on investment within 2 to 5 years.
• Self care, decision backing programs: $2 to $3 ROI within a year.
• Disease management programs: $7 to $10 return on investment within a year.

By offering health improvement programs, organizations are not only offering an additional service for staff members, but they are also gaining fiscally. Furthermore, the effect of a health improvement program goes beyond diminished healthcare cost and ROI. A health improvement program can affect productivity, absenteeism, morale, recruitment success, turnover, and healthcare expenditures.

• Source: Rees, C., and Finch, R. (2004). Health Improvement: A comprehensive guide to starting, launching and evaluating workplace programs. National Business Group on Health, 1 (1), 1-7.