Employee Wellness Incentive Programs Impact Both Health and Wealth

by: Nichole Gunn May 5, 2011

Along with a quality product or service, the other building block of a businesses foundation is the workforce. In fact, without a healthy and engaged workforce, employee productivity will be lacking, thereby hindering the chances of producing a quality product or service.

With this fact in mind, businesses are gearing up and striving to implement employee wellness programs. And, those companies that already have taken steps to introduce a program are seeing the benefits, both in the well-being of the employees, and the companies’ bottom lines in regard to healthcare costs and enhanced productivity. This is especially true for the healthcare industry.

Smart Business interviewed Tammie Brailsford, chief operating officer of Memorial Care Health System in Southern California. When asked why wellness programs should be invested in Brailsford explained, “There are many benefits that arise from worksite wellness, from reducing absenteeism, health care and workers’ compensation costs to improving employee health, morale and productivity.”

Brailsford went on to reference a study conducted by the University of Michigan which demonstrated that a high-risk worker costs a business three times more than a low-risk worker. Along with this, she cites from another report by the American Institute of Preventive Medicine, noting that a whooping “87.5 percent of health claim costs are due to lifestyle.” The report also states that businesses with incentives focusing on employee health can reduce absences by 30 percent. In addition, wellness initiatives can save the company between “$3.48 to $5.42 for every dollar spent.”

Looking at one of the most common unhealthy lifestyle consequences, obesity, each overweight employee can add $500 to $2,500 in absences and medical expenses. On a national basis, this totals $50 billion annually, just on obesity-related expenses alone. This American epidemic leads to increased blood sugar levels and increased blood pressure.

“The impact of too much weight on health quality and life expectancy is now equal to if not greater than smoking,” warns Brailsford.

Other health factors to be considered that may be caused or worsened by obesity are diabetes, asthma, hypertension, and depression. Brailsford notes that these illnesses count for two-thirds of the total jump in healthcare costs, as well as a financial, emotional, and physiological toll on workers and their families.

To counter these unhealthy lifestyle trends, Long Beach Memorial Medical Center and the Miller Children’s Hospital offer employee incentives in the form of cash rewards for healthy lifestyle changes that include a weight loss program focusing on diet and exercise. These programs are geared to help employees achieve a healthy and sustainable weight.

Offering insight into how a company can design a wellness program, Brailsford advises, “Offer sessions that share advice, activities and coaching to reach and maintain goals. Identify employee advocates to motivate others to follow their lead. Engage employees’ families to extend healthy habits at home."

Other healthcare facilities that are jumping on the employee wellness bandwagon are:

San Angelo Community Medical Center which initiated a program in February of 2011, and Kane County Hospital, their Board just passed a measure that will provide employee healthcare incentives.