Health Handouts : Benefits of Employee Wellness Programs*

The costs of healthcare have been rising more than ten percent each year for several years. A substantial amount of the money spent in the healthcare system treats costly illnesses and diseases.

• Approximately 95 percent of the $1.4 trillion that we spend as a nation on health goes to direct medical care services, while about 5 percent is allocated to preventing disease and promoting health.
• Potentially, 50 percent to 70 percent of all diseases are avoidable as they are associated with potentially-modifiable health risks.
• In an effort to optimize employee health, reduce preventable healthcare utilization and enhance work execution, and in turn reduced healthcare expenditures and better employee satisfaction and retention, many corporations are planning, or are interested in planning, Worksite Wellness Programs for workers.

The benefits of worksite wellness are well documented. More than 120 research studies repeatedly show themes such as improvements in health outcomes coupled with high returns on investment (ROI). Some major findings include the following:

• Savings of $3.48 in reduced health care costs per dollar invested.
• Savings of $5.82 in reduce absenteeism expenditures per dollar invested.
• ROIs of at least $3 to $8 per dollar invested within five years of program implementation.
• Lifestyle behavior change programs: $3 to $6 return on investment within 2 to 5 years.
• Self care, decision support programs: $2 to $3 ROI within a year.
• Disease Management (DM) programs: $7 to $10 return on investment within a year.

By offering health improvement programs, companies are not only providing an additional service for employees, but they are also gaining monetarily. Furthermore, the effect of a health improvement program goes beyond lowered health care cost and return on investment. A health improvement program can affect productivity, absenteeism, morale, recruitment success, turnover, and health care expenditures.

• Source: Rees, C., and Finch, R. (2004). Health Improvement: A comprehensive guide to beginning, launching and evaluating worksite programs. National Business Group on Health, 1 (1), 1-7.