Healthcare costs pose a serious threat to the competitiveness and long-term viability of U.S. businesses which, in turn, affects us all. Consider the following:
Private business expense for healthcare consumes 40% of before tax profit and 58% of after tax profit.
The cost of U.S. healthcare doubled from 1990 to 2001 and is projected to double again by 2012.
Traditional methods used by businesses to control healthcare costs such as; reducing benefits, increasing employee contributions and the more recent shift to consumer driven health plans are all short-term fixes that fail to address the primary driver of the soaring cost of healthcare namely inadequate investment in health through primary prevention, health risk management and disease management.
Consumers also play a role in the financial crisis associated with healthcare. In general, consumers lack the motivation necessary to prevent conditions from occurring and / or reversing conditions once they develop. Research from the U.S. Department of Health and Human Services shows that:
65% of Americans are overweight or obese
5% of Americans get little or no exercise
7 out of 10 Americans that die each year die of a preventable chronic disease
Our healthcare system also has a major part in our current predicament. Physicians, hospitals, insurance and pharmaceutical companies all primarily focus on treating conditions after they develop instead of focusing their energy on preventing conditions from occurring in the first place. The reason for this is obvious; prevention is much less costly than treatment and would mean a drastic drop in revenue and profits for our healthcare system.
The worksite is the logical place to promote health and wellness since most American adults spend more waking hours at work than any other place. By creating a worksite that supports and encourages a healthy lifestyle we greatly improve the likelihood that the people will change their behavior.
Larry S. Chapman, for his book entitled Proof Positive: An Analysis of the Cost-Effectiveness of Wellness”, reviewed 42 worksite health promotion and wellness programs, covering 370,558 participants with an average program length of 3.60 years and 4.7 program components. Chapman found that worksite health promotion and wellness programs can:
Reduce Sick Leave by 27.8%
Reduce Health Costs by 28.7%
Reduce Disability Costs by 33.5%
Reduce Workers Comp Costs by 33.5%
Save $5.50 in cost for every dollar invested.
Research also suggests that the indirect costs of poor health (e.g., absenteeism, presenteeism, disability) may be two to three times higher than the direct medical costs and that the impact of poor health on indirect costs, particularly lost productivity, is borne by all employers, even those that do not provide heath benefits.
We simply cannot continue to spend ever-increasing dollars for healthcare, more aptly described as sick” care, treating diseases after they develop. Instead we should focus our resources and energy on preventing and / or reversing chronic disease through engaging, targeted employee health and wellness programs which motivate employees to change their lifestyles.