Companies that want to save on health care costs have no choice but to invest in wellness programs, says DeeEdington, director of the Health Management Research Center at the University of Michigan.
"If you do nothing, it' s proven that it' s going to be expensive. And you haven' t seen anything yet as theworkforce continues to age. The health care curve takes off around 45 or 50."
Some companies try to control health care costs on the supply side. "You can beat up on HMOs, physiciansand hospitals to reduce costs and up copays. It' s a strategy, but it makes people mad," Edington says. Or companies can try to reduce the demand for health care services with programs that encourage employees toexercise, lose weight and reduce stress.
Tracking Health Risks
The center tracks the health of 2 million people for companies such as Steelcase, BankOne, ProgressiveCorp., Xerox and UAW-GM.
In looking at the relationship of risk and cost, "it' s very clear that high-risk people are high cost, especiallywhen there is aggregate risk," Edington says. The center conducts appraisals by assessing typical risks - amount of exercise, body weight, blood pressure, cholesterol, smoking, alcohol use, seat-belt use, lifesatisfaction, overall stress, and the individual' s perception of health. One or two of these factors isconsidered low risk, three or four is medium risk, and five or more is high risk.
The combination of risks is important, Edington says. For example, with a 25-year-old smoker, "how muchmoney should you invest to get a return on your investment? Zero. The person is not going to be expensive.However, if the 25-year-old smoker is asthmatic, then the answer is not zero anymore. Or if the 25-year-oldsmoker is pregnant. There are a lot of issues."
The center takes a health risk appraisal of the top three risks. "For a 25-year-old, you may want to invest $5;for a 45-year-old, you may want to invest $500," he says. If the 45-year-old is a candidate for cardiac arrestand bypass surgery, investing that $500 could save $40,000.
It' s a matter of resource allocation, Edington says. "If you have all the money and all the time, do everything. Butwith limited money and time, be a little more strategic in how you spend those resources."
Edington believes not just in targeting the highest-risk employees but also in helping to keep low-riskemployees low risk by offering some type of fitness program.
"If you don' t give them the opportunity, what' s going to happen? There are so many barriers to exercise timeand facilities. It' s hard to get people to start exercising; it' s easier to keep people exercising."
A company that does not have a wellness program can start by offering an inexpensive awareness tool thatgives employees an idea of where they stand and the message that the company considers their healthimportant.
"Give people targets. Then have somebody contact them and say, ' How can we help?' " Edington says.
Taking a Holistic Approach
The wellness movement has become broad and holistic, says Walter S. Elias, CEO of Elias and Associates Inc., aMinneapolis-based consulting company. When wellness programs became fixtures of corporate health carecost containment, they became "more of a medical model, more of a health risk management approach. Companies did an analysis of insurance claims to find high-risk populations and work to reduce risk."
The focus has come around again to more of a mind/body/spirit orientation, he says, because there is goodevidence that families, companies and neighborhoods all contribute to an individual' s health and well-being.
Elias called for better integration of employee assistance programs and wellness plans.
"The HR vice president has to look at the big picture and say there is a relationship between disability andworkers' comp and wellness and EAPs. If it is not managed in a broad way, an integrated way, you' re goingto miss opportunities for really managing cost."
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