Saving Money through Wellness Programs

Wellness Programs

Wellness programs have been a recent focus in the human resource world – the premise is that healthier employees will result in lower medical spending, thus addressing the ever-increasing medical insurance costs.

Wellness programs should address ways for:
· Employees and their dependents to understand their personal health risks;
· Employees and their dependents to understand what actions are needed to address those risks; and
· Employers to use permissible means (incentives and disincentives) to help employees and their dependents to make the necessary changes in their lives to mitigate or eliminate those risks.

A study by the University of Michigan Health Management Research Center shows that lowering the number of risk factors can significantly lower the company’s medical spend. For each person with five or more risk factors, eliminating just one or two could reduce costs for persons in that high risk category nearly $3,000. Follow up studies by both the University of Michigan and Aon confirm these results.

The Aon survey indicates that most companies are willing to invest 1 – 3 percent of medical spend to drive lower health risks – the equivalent of about $100 - $225 per employee/year. For this type of investment to be effective, more than 80% of employees must be engaged.

Aon lists the following core components of a wellness program that can be implemented with a 1 – 3 percent of medical spend investment per employee:
Regular biometric testing (blood screen, blood pressure and weigh measures) so employees know exactly what their health risks are.
A personal health risk report that combines Health Risk questionnaire results with biometric screening results.
An interactive discussion of results with an expert who directs the employee to an action plan for the year.
Specific actions employees will be expected to pursue, including:
· Completing education and training around health risks.
· Getting started on an individually tailored discipline of better diet and some exercise.
· Getting on a prescription drug regimen to address immediate health risks.
Some form of financial or plan design incentive/disincentive construct that will permit employees who engage in changes to be rewarded.
A system capable of gathering data, and providing useful learnings, and direction, about the program’s effectiveness.

FosterThomas has partnered with Duke University to offer a free online wellness program to its clients. This online wellness program will take its clients well on their way to achieving a successful wellness plan for their organization. For more information, please call (800) 372-3626.