Good Health Makes Economic Sense
Good Health Makes Economic Sense
Healthcare costs in the U.S. exceeded $1 trillion in 1996 (Health Affairs, January/February 1997), and the cost is increasing by 12% per year (Business Health, February 1994).
In fact, the U.S. Chamber of Commerce found that $3,759 was spent on healthcare that year for every man, woman and child in the nation. (U.S. Chamber of Commerce, 1996).
However, employers commonly report that worksite health and wellness programs save money. Studies show program participants have up to 50% lower medical costs, 46% less absenteeism, and 20% declines in disability (see reports below).
What’s more, major insurers offer reduced insurance premiums to companies with wellness programs. Business Week listed Metropolitan Life, Prudential, John Hancock, Travelers and Aetna, among others. A representative of Sun Life of Canada, which offers a 5% discount, said, “We want to recognize and do business with employers who value healthy workers.”
Business Case Studies Show the Dollar Value of Wellness
Steelcase:
In the longest-running evaluation of a wellness program, Steelcase observed 4,000 employees from 1984 through 1995. The company found among employees who dropped from high-risk to low-risk through the wellness program, average annual health claim costs dropped 53%. “It’s evidence for the decision-makers within the company to say, ‘Yes, this is a cost-saving measure’,” says Jonathan Showstack, UC San Francisco. (Associated Press)
Johnson & Johnson:
An independent evaluation of Johnson & Johnson’s wellness program discovered mean annual inpatient cost increases for nonparticipants were nearly twice those for participants in the wellness program. The study also found lower cost increases in hospital days and admissions among the program participants. (JAMA)
Pitney Bowes:
A study revealed 9% savings in medical costs