Wellness As a Business Strategy

By Jennifer R. Vogel

Where Are The Health Care Dollars Going?
U. S. health care costs have increased from $1,100 per person in 1980 to $7,900 in 2009.
Currently $1.5 trillion, 75 percent of all health care spending, is devoted to treating chronic
diseases which are often preventable. Ninety-nine percent of all Medicare dollars spent are
linked to chronic disease. Obesity and complications (diabetes, cancer, and heart disease) are
responsible for an estimated $147 billion a year. Health care reform must address coverage for
all Americans while dramatically reducing costs. Failure to address the situation will prevent
American companies from competing in the global marketplace, increase taxes, and undermine
our economy.

More than 130 million Americans suffer from chronic disease and millions of lives are cut short
unnecessarily. The Partnership for Prevention report claims that better utilization of just five
preventive services would save more than 100,000 lives annually. Eliminating just three risk
factors – poor diet, inactivity, and smoking – would prevent 80 percent of heart disease, stroke,
Type 2 diabetes, and 40 percent of all cancers in the U. S.

The Greatest Public Health Threat Our Nation Has Ever Faced

A recent study conducted by Emory University revealed that obesity is the fastest growing public
health challenge our nation has ever faced. The Center for Disease Control (CDC) attributes the
problem to environments that promote increased food intake, unhealthy foods, and physical
inactivity. Obesity is defined as having a body mass index (BMI) of 30 or greater which is
calculated by dividing weight in kilograms by height in meters squared. For those of us who
haven’t memorized the metric conversions and can’t perform the calculations in our heads, The
U.S. National Institutes of Health has an online BMI calculator.

The rates of obesity have increased from 12 percent in 1989 to 28 percent in 2010. If the current
trend continues, half of the adult population will be obese by the year 2020. Direct health care
costs for obesity are expected to climb to $344 billion (21 percent of the nation’s direct health
care spending) unless the current trend is halted (The Future Costs of Obesity, 2009). The 2009
report on obesity in America produced by the Trust for America’s Health and the Robert Wood
Johnson Foundation indicates the rates of obesity increased for 23 states and did not decline for
any states between 2008 and 2009. Obesity rates among children have climbed to an
unprecedented 30 percent (Obesity Rates Continue to Climb, 2009). Dr. David L. Katz, director
of the Yale University School of Medicine Prevention Research Center states, “It truly is a public
health crisis of the first order, driving many of the trends in chronic disease, in particular the
ever-rising rates of diabetes.” (The Future Costs of Obesity, 2009).

According to the New England Journal of Medicine, smoking rates have dropped by 20 percent
in the last 15 years. Unfortunately, any health benefits we should be realizing from the decline in
smoking have been offset by the obesity rates that have shot up by 48 percent in the same time
frame (Mertens, 2009). What should we conclude? As a nation we tackled smoking as a public
health threat. The numbers speak for themselves. We can do the same thing with the obesity

Reversing the Trend
Raising public awareness of the seriousness of this threat is a starting point but is not enough to
provide the impetus for change. Reversing the trend will require a full scale national campaign
involving evidence-based approaches. While there is no specific template for health initiative
program design, successful programs involve community, schools, health care systems, and
workplace intervention. The Partnership to Fight Chronic Disease (PFCD) suggests the
following five elements are essential:

  • Removing barriers and empowering Americans to take control of their health
  • Educating Americans to see obesity as a serious medical condition that is life threatening
  • Ensuring that fear about the stigma of obesity does not eclipse the need to combat it
  • Redesigning our health care system to treat obesity like a preventable medical condition
  • Engaging employers and communities to get them invested in promoting wellness (The Lewen Group, 2009)

Business Necesssity
The U. S. workforce is truly the backbone of our economy. Employers are a critical piece of the
solution to the current health care crisis and obesity epidemic. Businesses need strategies for
developing sustainable, adaptable programs that work to improve employee health and lower
costs. Human Resource professionals are uniquely positioned to serve as catalysts in their
organizations to educate and support employees through programs that promote wellness.
Properly designed wellness programs can play a pivotal role in cultural reform and turning the
tide on the obesity epidemic.

Employee absenteeism and presenteeism due to chronic illness has a detrimental affect on
profitability. Almost 80 percent of workers have at least one chronic condition and 55 percent
have more than one chronic condition. Absenteeism is defined as work missed due to sick days.
Presenteeism is defined as the loss of productivity due to employees who report to work but are
less productive due to illness. Lost economic output associated with absenteeism and
presenteeism is costing American businesses $1 trillion a year (U.S. Workplace Wellness
Alliance, 2009). Wellness programs can improve workforce morale, improve productivity, reduce
absences, attract and retain employees, reduce costs, improve workforce safety, promote
corporate image, and fulfill social responsibility.

Success Stories
Many businesses were ahead of the curve and are realizing a return on their investment in
employee wellness programs. IBM has saved $175 million dollars through implementation of
wellness programs (Partnership for Prevention, 2007).

Lincoln Industries is a manufacturing plant with 565 employees. They have a multifaceted
wellness program that rewards behaviors. One of the coveted rewards employees can aspire to
is a three-day, company-paid trip to climb a 14,000-foot peak in Colorado. Lincoln has reported
a $2 million annual savings in health-care costs. They spend approximately $4,000 per
employee. Additionally, workers’ compensation costs have been reduced by $360,000 per year.
The ROI for this program is 5:1 (Design Matters, 2010).

In 2005 Safeway grocery chain implemented their Healthy Measures program. They have made
continuous improvements each year. Safeway’s plan utilizes a provision in the 1996 Health
Insurance Portability and Accountability Act which allows differentiating premiums based on
behaviors. CEO, Steven Burd stresses the key to successful plans lies in rewarding behavior.
Safeway is committed to building a culture of health and fitness by addressing behaviors linked
to chronic disease such as smoking, obesity, blood pressure, and cholesterol (Burd, 2009).
During the four year period following implementation, Safeway’s health care costs remained
constant while most American companies have experienced a 38 percent cost increase over the
same four-year period. In addition to the Healthy Measures program, Safeway supports
employee behaviors by offering:

  • A state-of-the-art fitness center near Safeway’s headquarters
  • Free lunch at the company cafeteria for every eight visits to the gym
  • Subsidized cafeteria, which offers lots of vegetarian fare
  • Portion size, calorie count, cholesterol and fiber count posted for all prepared meals in the cafeteria (Rodman & Gathright, 2009).

Programs that combine a culture of wellness with incentives that reward healthy behavior have
proven to be far more effective than traditional wellness programs that have had disappointing
adherence rates. Price Waterhouse Coopers found that less than 15 percent of eligible
employees enroll in traditional wellness programs. However, if they received some form of
incentive employees are two to four times more likely to enroll. In another study by Suffolk
University 73 percent of Americans surveyed would change their behavior if they could save
money (Donnelly, 2009).

Are You Leading Change?
As with any change initiative, creating a culture of health and wellness for your organization will
have its unique challenges. However, the alternative is not attractive. Change is inevitable–
growth is optional. Your organization will experience change, but the question is will you be out
in front leading positive change or reacting to a crisis after it erupts? American business leaders
should exercise the opportunity to initiate a culture of health and wellness in their organizations
not only because it is socially responsible, but it is good for the bottom line as well. Executives
who exhibit strong vision and model desired behaviors will have a distinct advantage over those
who sit back and wait to see what unfolds.


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