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Health care costs continue to increase annually
causing significant impact to corporate financial planning
and margins. Solutions are needed to control health risks
which are affecting those increases, such as corporate health
and wellness programs which include executive
health and employee wellness.
Health Plan Premiums increased 8.6% in 2006
with anticipated increases in 2007 running at 11.6% (United
Benefit Advisors L.L.C. September 2006). This survey found
that the average annual health plan cost the employer $4,592
per year and the employee $2,031 annually. At the current
rate, this will increase by another $770 per employee in 2007.
As these numbers increase, many businesses are beginning to
see the benefit of and have implemented employee wellness
programs.
The unexpected deaths of key executives in large
businesses have demonstrated the financial impact of unrecognized
executive and employee health risk issues. On a smaller scale,
data has been available for a number of years documenting
the cost to employers for employee health and wellness issues.
While the loss of a CEO is news worthy, the loss in productivity,
absenteeism and turn-around in employees has an equal impact
as a cohort for employers. Studies show that 70% of the burden
of illness and its associated costs are due to preventable
conditions and health risks.
Excess Health Care Costs
A study conducted by the independent Health Enhancement Research
Organization (HERO) evaluated the association between modifiable
risk factors and medical expenditures.
| Health Risk |
Excess Health Care Spending |
| Overweight |
$1,295.00 |
| High
Blood Glucose |
$1,573.00 |
| Depression |
$2,618.00 |
| Stress |
$1,229.00 |
| Tobacco |
$774.00 |
| High
Blood Pressure |
$706.00 |
| Multiple Risk Factors * |
$4,688.00 |
** Many individuals have multiple risk factors.
This represents the excess spending associated with an employee
who has 2 or more risk factors. For individuals with 6 or
more risk factors, health care costs increase to as much as
8 times that of people without health risks.
Source: Summex Health Management (2005)
Offering and implementing a comprehensive physical
exam and health assessment for employees every year has proven
to decrease medical claims, decrease absenteeism and increase
productivity. “Annual physical exams and health assessments
seem to be the most defensible health benefit because they
can find health problems that, if undetected, could result
in an executive’s illness or death and derail a company,
at least temporarily” (Dr. Steven Masley, medical director
of Carillon Executive Health). Due to the amount of time spent
in the workplace, this is one of the most effective environments
to encourage employee wellness and healthy lifestyles. Large
case studies have documented that for every $1.00 spent on
executive and employee health programs, a $2.00 to $6.00 return
on investment has been documented. These claims are supported
by scientific literature and summarized in the US Department
of Health and Human Services Report Healthy
People 2010.
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