Healthcare costs are a serious threat to the competitiveness and long-term success of U.S. businesses. According to the Centers for Medicare and Medicaid Services, total health care spending in the United States is expected to reach $4.8 trillion in 2021, up from $2.6 trillion in 2012 and $75 billion in 1970.
To put it in context, this means that health care spending will account for nearly 20 percent of the gross domestic product, or one-fifth of the U.S. economy by 2021. These statistics are staggering. In addition, for many employers on self-insured or experience-rated plans, the health of individuals covered under the employer plan directly impacts rates.
According to a study by ADP Research Institute, employers indicate they have tried several strategies to control health care. These strategies include reducing expensive plan options, shifting costs to employees, and reducing the number of employees who are eligible for health benefits, including downsizing and using more part-time workers.
However, these strategies are not without impact to an organization’s culture, particularly employee morale, employee engagement and retention. The impact on culture has led employers to reconsider wellness programs as a strategy for promoting a healthy workforce, which, in turn, promotes productivity in the workplace and helps control health care expenses.
Employee wellness programs generally strive to promote a healthy lifestyle for employees, to maintain or improve health and well-being, and to prevent or delay the onset of disease. The National Institute for Health Care Management states “wellness should be thought of as not merely the absence of illness, but in terms of the total well-being of the individual, encompassing physical, emotional, social, spiritual and intellectual health as well as healthy behavior in the home and at work.”
At their core, employer programs assess participants’ health risks and deliver customized educational and lifestyle programs designed to lower risks and improve outcomes. There is a broad range of wellness activities for employers to consider. Successful wellness programs include physical fitness and nutrition programs, health education and information, health screenings, flu shots, counseling through Employee Assistance Programs, healthy food options, as well as targeted programs such as tobacco cessation and chronic disease prevention and management.
So how do employers get started or ensure their current wellness program is on the right track? Employers need to create a culture of well-being at their workplaces. Employers that do so are able to build and sustain better employee health over time, increase employee productivity and performance, and reduce health care costs. Here are six strategies to consider in order to make a difference.
• Link wellness initiatives to corporate strategy. Think about wellness as a corporate culture strategy. Since human capital is the most expensive cost for companies, it makes business sense for employers to do all that they can do to ensure their employees are healthy and happy. Workplace culture sets the tone for your employees. A supportive work environment, where managers reinforce your wellness strategy, can keep employees motivated and engaged. Engaged employees are productive, deliver exceptional customer service and help contribute to the bottom line.
• Gain buy-in from senior leaders and front-line managers. One of the leading drivers of employee engagement is whether or not employees believe their supervisors truly care about their well-being. When management supports wellness activities, the message is delivered that the organization cares about its employees and is willing to spend some energy and money on opportunities that can make employees feel better both at work and outside of work. Employees who feel their companies care about their well-being tend to be productive and enthused, and employers that provide workplace wellness programs tend to have healthier staffs, lower health care costs, and lower absenteeism.
• Use existing community resources. There are many community resources locally that are no cost or low cost that can help companies get started. Locally, the Wegmans’ “Eat Well Live Well” program is a great place to start. In addition, companies such as Workplace Vitality can assist companies with developing a wellness plan, including biometric testing, flu shots, fitness challenges and onsite nursing services. Our community is also rich in events such as the Chase Corporate Challenge, which allow employees to participate in a large community activity that benefits local charities.
• To incent or not to incent, that is the question. No matter how big the carrot, not everyone is going to bite. In short, not everyone is going to participate in wellness, whether you provide some type of financial incentive, such as reduced medical insurance premiums for being a non-smoker, or not. In addition, some companies are taking a more punitive approach and providing penalties for following certain unhealthy lifestyles or not participating in Wellness programs.
However, some of these organizations are reversing their decisions, such as the case with Penn State. In January, Penn State was penalizing tobacco users $75 each month and other employees $100 a month if they and their spouse did not complete a health questionnaire and biometric screening. After a staff uproar, these penalties were suspended. While there is some research to support that providing incentives can lead to greater participation and ultimately healthier employees, employers who focus more on the engagement piece and what fits in with their culture may be more successful.
• Be cautious of confidentiality challenges. Employees do not like to feel their employer is watching them and tend to participate more in certain wellness activities if they are confident that their individual medical information is not being shared with others. Consider outsourcing portions of your wellness program, particularly anything related to medical information, such as biometric testing. This will also ensure employers avoid compliance issues related to privacy and the Americans with Disabilities Act.
• Don’t forget to measure. Considerable evidence exists demonstrating that employee wellness programs can achieve costs savings and produce significant returns on investment. According to numerous studies, including one from the International Foundation of Employee Benefit Plans, most employers that have analyzed the return on investment of their wellness programs have found $1 to $3 decreases in their overall health care costs for every dollar spent. Consider tracking metrics such as employee satisfaction, number of sick days used, and employee turnover to help justify program costs.
So, why should employers care about employee wellness? According to a study by the Principal Financial Group, 45 percent of workers stay at their jobs because of wellness programs offered by their employers. There is a growing body of research that supports that these programs can reduce absenteeism, improve work productivity, and reduce the use of and spending for health care services.
If implementing a comprehensive wellness program can provide employees with the tools to strive for optimal health and help reduce employer costs, the workplace is a logical place for employers to promote health and wellness.
Michelle Pedzich is senior vice president, Human Resources, for Canandaigua National Bank and Trust. She oversees the human resources and training functions and is responsible for developing strategic initiatives and communicating and executing human resources throughout all levels of the organization. This article is brought to you by the Rochester affiliate of the National HR Association, a local professional HR organization focused on advancing the career development, planning and leadership of HR professionals. Join us for Rochester’s first annual HR Executive of the Year Awards Luncheon to recognize exceptional leaders on April 29 Visit www.humanresources.org for more information.