Benefits of a Company Wellness Program

Companies and employees see savings in medical costs.

Lifestyle disease is no longer simply an issue for aging America.  An analysis in 2012 estimates that “physical inactivity causes 6% of the burden of disease from coronary heart disease, 7% of type 2 diabetes, 10% of breast cancer, and 10% of colon cancer.  Inactivity causes 9% of premature mortality.”(The Lancet, 2012)  Thorpe sites nearly a quarter of health care spending increases in the US between 1987 and 2002 being attributed to diseases linked to lifestyle.(Health Affairs, 2005)  Lifestyle disease is an issue for employers and employees increasing healthcare costs and decreasing productivity, but there are solutions. “Lifestyle management interventions as part of workplace wellness program…can help contain the current epidemic of lifestyle related disease, the main driver of premature morbidity and mortality as well as health care cost in the United States.” (Rand Health Quarterly, 2013)

One of the largest and longest running wellness programs in the country belongs to Johnson & Johnson Family of Companies.  They began their wellness program in 1979 and it is still in place today.  Research measured Johnson & Johnson against other similar companies form 2002-2008 and found an average return on investment equal to a range of $1.88-$3.92 per dollar spent. (Health Affairs, 2011)  Company employees had a significant reduction in obesity, high blood pressure, high cholesterol, tobacco use, physical inactivity, and poor nutrition as reported by the same research article resulting in the company seeing a 3.7 percentage point lower increase in company medical spending. “We know that we have one of the healthiest workforces,” Fasolo says. Here’s how: First, he says, the company’s health stats—like obesity rates and triglyceride levels—consistently beat the national averages from the Centers for Disease Control and Prevention (CDC). Case in point: In 2016, 30% of people nationwide had hypertension, compared to just 9.2% of the Johnson & Johnson population.  (Johnson & Johnson Workplace Wellness, 2018)

Other studies done have shown similar savings.  An average reductions in sick leave, health plan costs, and workers’ compensation and disability costs of slightly more than 25% were found in a meta-analysis of studies. (The Art of Health Promotions, 2005).  An analysis of studies by Aldana showed return on investment savings ranging from $2.30 to $6.00.(American Journal of Health Promotion, 2001) Between 2002 and 2005 Highmark Wellness Program study reported a savings of $176.47 in health care expenditures per person per year between those who participated in their wellness program and nonparticipants and a return of $1.65 for every dollar spent on the program.(Journal of Occupational and Environmental Medicine, 2008)

Confirming that wellness programs offer savings we look to a series of literature reviews conducted by the Centers for Disease Control and Prevention Community Guide Task Force “There was sufficient or strong evidence that comprehensive, evidence-based programs can reduce rates of a wide range of life-style disease and the habits associated with them.  The same study found a reduction in absence from work due to illness or disability and overall improved well-being scores.(Annual Review of Public Health, 2008)  Worksite Health Promotion programs can assist in the reduction of health insurance claims and overall healthcare costs and, most importantly, help achieve a higher level of health for employees (Preventing Chronic Disease, 2009)

Wellness programs are getting noticed by more than just employers. 

“Worksite wellness legislation is gaining momentum in the United States.  Between 2006 and 2010, 28 states passed worksite wellness laws concerning health insurance incentives, state employee programs, tax credits and studies concerning worksite wellness.” (Kentucky Department of Public Health, 2012)   In Indiana’s first year of their Small Employer Wellness Tax Credit Program, in 2007, 50 employers claimed $107,960 in tax credits, more than doubling that number in 2008 according to Indiana Department of Revenue.  It’s not just local government either.  The Federal Affordable Care Act of 2010 provides support for companies looking to establish wellness programs including providing grants for small employers that establish wellness programs and allowing employers to offer incentives to employees who participate in programs.  But perhaps most noteworthy, 85 percent of respondents in a phone survey done, in the US by Research Triangle Institute, in 2004 were in favor of  tax credits for employees offering programs to reduce obesity.(AJPM, 2007)  Showing not only an increased interest by government for wellness programs but by individuals as well.

Companies see an improved valuation.  

Although we are seeing a recent increase in interest, wellness has been moving into the spotlight for decades.  The Health Project, a non profit organizations established in 1992 by Dr Roger Porter, then assistant to President George H.W. Bush, annually awards the Koop Award.  The Koop award is given to companies who can prove they have reduced the demand for medical services, followed the objectives of Healthy People’s workplace health promotion targets, and can prove net healthcare/productivity cost reductions as a result of improving population health. Interestly an analysis of the valuation of companies applying for and winning this award showed they “outperformed the market in 11 of 14 years studied.”…“The Koop winners outperformed the S&P 500 by 2.35 to 1.00.”  (Journal of Occupational and Environmental Medicine, 2016)

“The EIU research finds, on the whole, that Us employers have been reasonably successful at establishing a workplace culture of wellness:  about seven in ten employees(69%) agree that health and wellness are an important part of their organisation’s culture.” (The Economist Intelligence Unit, 2016)   “The most dramatic gulf the EIU research found was not between organisations of different sizes, however, but between those that have established a wellness culture and those that have not.  Yet, employees who say their company has a wellness culture, regardless of size, report better outcomes across a broad range of concerns, from fitness and diet to overall well-being and engagement with the employer’s mission.  Such a culture, the EIU research shows, is not only achievable for a broad range of companies, but can provide them with an important competitive advantage.”  (The Economist Intelligence Unit, 2016)  When employees feel valued they do not find the need to seek employment elsewhere.  We see this illustrated with turnover rates for participants of the Canada Life program being only 1.8% compared to the initial company average of 18% for nonparticipants.(American Journal of Health Promotion, 1992)

An employee’s performance has been linked to engagement and wellbeing.

Gallup found the two major influences of employee performance to be engagement and wellbeing. (Gallup, 2015)

“Employees who are engaged and have high well-being are:

• 42% more likely to evaluate their overall lives highly
• 27% more likely to report “excellent” performance in their own job at work
• 27% more likely to report “excellent” performance by their organization
• 45% more likely to report high levels of adaptability in the presence of change
• 37% more likely to report always recovering “fully after illness, injury or hardship
• 59% less likely to look for a job with a different organization the the next 12 months
• 18% less likely to change employers in a 12-month period
• 19% more likely to volunteer their time time the past month”

One study found company savings between participants in a wellness program and nonparticipants to be on average $353 per person per year in productivity costs or 10.3 hours annually. (Journal of Occupational and Environmental Medicine, 2013) Another study by the CDC estimated employers lost $1,685 per employee in productivity due to personal and family health problems. (Journal of Occupational and Environmental Medicine, 2003)  Employees involved in a wellness program are more productive.

Wellness programs get results.

Benefits of a wellness program at work are for small and large companies alike.   There are more observable benefits such as increased productivity, lower healthcare costs, and improved company valuations to the less observable such as improved mental clarity and decreased stress.  There are many reasons employers offer a wellness program, but regardless of the reason employers and employees alike reap benefits from an evidence based wellness program.

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