Corporate Heath and Wellness

Corporate Health and Wellness Industry

Employee wellness programs are programs aimed at encouraging employees to take preventative measures to control illnesses and unhealthy behavior in an attempt to manage the burgeoning cost of health care, reduce absenteeism and improve morale.

"Wellness programs take many forms including:

* Educational programs for managing health;

* Health Risk Assessments;

* Health Screenings;

* Onsite fitness facilities;

* Subsidized fitness programs; and

* Smoking cessation programs."

Employers are encouraged to adopt wellness programs, as the Center for Disease Control reports that more than 75% of an employer's health care costs and productivity losses are related to employee lifestyle choices:

* "Workplace alcohol, tobacco and other drug use costs American companies over $100 Billion each year;

* Job stress is estimated to cost American industries $200-$300 billion annually;

* Obesity health care costs totaled an estimated $117 billion in 2000 and have climbed steadily;

* 95% of our nation's health expenditures is committed to diagnosing and treating disease after it becomes manifest; and

* In 2004, tobacco use was estimated to cost the United States $193 billion, including $97 billion in lost productivity and $96 billion in direct health care expenditures."

An effective employee wellness program can result in reductions in sick leave absenteeism, employee use of health care benefits and worker's compensation claims. Employee wellness programs can also yield large dividends, resulting in a rate of return from $1.49 to $4.91 for every dollar spent.

Today the wellness industry is at $500 billion in sales, which is up from $200 billion in sales 5 years ago. Health and Wellness is slated to double again to $1 trillion in sales in the next 5 years, both by itself and as a counter force of the terrible effects caused by the $1.3 trillion bad food industry and the $2 trillion sickness industry.

Even during the recession, employer interest in wellness remained high, although some firms have delayed implementation until economic conditions improve. A few experts suggested that--after a period of dramatic growth--demand for wellness initiatives has begun to stabilize. According to one benefits consultant, most employers that have decided that comprehensive wellness programs are consistent with their company philosophy have already implemented the programs.

Large, self-insured employers--particularly those with low worker turnover--have been the most likely to undertake comprehensive wellness programs with substantial incentives. Some experts reported seeing high interest among smaller, self-insured employers--those with workforces in the hundreds--but these employers generally find it more difficult to shoulder the added costs of wellness programs--particularly the costs of hiring staff dedicated to wellness initiatives whether they use an outside vendor or not.

"By far the strongest motivation for implementing wellness is the imperative to contain direct medical costs, or "bend the cost trend," as many respondents said. A second key motivation for implementing wellness initiatives is to attempt to boost productivity and reduce indirect medical costs, such as disability claims and work-related injuries, by improving employees' health. Finally, some employers view wellness as a key part of a broader business strategy to enhance their corporate reputation and position themselves as "employers of choice" in their industries and communities." Many employers with comprehensive and highly regarded wellness programs view the broader employer-of-choice strategy as important an objective as the containment of direct and indirect medical costs.

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