Workplace wellness is now a business issue as health care costs soar. Healthcare costs are a $3 trillion annual expenditure. That is equal to over 17% of our country’s annual GDP. Health spending is growing at a 5+% annual rate.
All of us are impacted by these rising costs. About half of health expenditures are paid for by households and the federal government. The rest are paid by businesses, state/local governments and individuals. As a country, as individuals and as businesses we confront a health care cost crisis.
Personal choice drive health care costs higher
Personal choices are a major factor in driving up health care costs. I recently published the Boomer Generation Diet to highlight that we are in a national weight crisis. Our weight gain has resulted in a national obesity and diabetes epidemic. This epidemic is different from a flu epidemic. This weight crisis is tied to our personal choices on diet and exercise.
Work is also a contributor to our weight gain. Our work, commute and lives are increasingly being defined by stress and sitting.
The small business challenge is what to do?
Should a business get involved in work associates’ personal choices if they impact the company’s costs?
If stress, diet choices and sitting are driving health care costs higher then how should a business structure its work place? What are the boundaries for setting rules and offering incentives?
A well designed and implemented workplace wellness programs can be a tool for a business attempting to answer these questions.
Examples of workplace wellness programs
Business workplace programs span a range of designs and implementation paths. Few businesses offer a holistic set of actions. Most businesses have a narrow focus when designing and implementing workplace wellness programs. The most common activities offered are:
- Health screening to build a data base on an individual’s key body functions like heart rate, blood sugar levels, etc.
- Participation in stop smoking coaching and provision of stop smoking products
- Exercise focused programs that can range from offsite gym memberships to onsite yoga classes.
The rest of this article profiles options and best practices for getting the most out of your business investment in workplace wellness programs.
Workplace health program participation has conflicting results
An increasing number of companies now offer workplace wellness programs. 80 percent of work associates in larger companies have participated in a company workplace health program. However, among smaller companies, there is less use of workplace wellness programs. Only an estimated 33 percent of small employers have a wellness program in place.
Among small businesses offering a wellness program, 70 percent of these programs were categorized as having a limited scale. Cost was cited as the determining factor among small businesses for having, or not having, a work associate wellness program.
Mixed results from work associate incentives
There is an increasing trend among businesses to offer incentives to work associates for participation in workplace wellness program. This raises two questions. The first is whether incentives increase work associate participation? The second is whether work associate participation achieve lower health care costs?
The answer to the first question appears to be yes, incentives do increase work associate participation in workplace wellness programs. A Rand survey found a 20% median program participation rate for employers who did not use incentives to encourage work associate participation in workplace wellness programs. This compares to a 40 percent rate for employers that used rewards. Interestingly, there was a 73 percent participation rate among work associates where employers used penalties and/or rewards.
Do workplace health programs reduce costs?
There are conflicting answers to the question of whether workplace health programs reduce costs. There is evidence that it does. There is evidence that it does not.
Johnson & Johnson is nationally recognized as a business leader on using workplace wellness programs to reduce health care costs. Harvard Business Review reported in 2010 that Johnson & Johnson achieved a two-thirds drop in the number of employees who smoke since 1995 through their workplace wellness program. It also reported that the number of Johnson & Johnson work associates reporting high blood pressure has fallen by half. Johnson &Johnson estimates that every $1 spent on their workplace wellness program has generated $2.71 in health cost savings. The companies estimates $250 million in health cost savings between 2002-2008 achieved through their workplace health program.
This contrasts with research reported by Rand and Slate. Rand states that its research found no evidence of reduced healthcare costs from employee participation in wellness programs. Slate published an article concluding that workplace wellness programs are a “waste of time and money, they don’t improve health outcomes and they are a front for shifting costs onto employees.”
Johnson & Johnson workplace wellness program best practices
The following are workplace wellness program best practices drawn from Johnson & Johnson’s program:
Workplace wellness is part of the company’s DNA. Work associate wellness is part of this company’s “credo.” The health of work associates defines and evaluates all business decisions. As in any business program, senior officer engagement is critical. If a workplace wellness program is viewed as a HR activity then it is doomed to limited engagement and success.
Work associates insights drive program effectiveness. Engaging work associates in also part of Johnson & Johnson’s culture. They spent decades seeking and receiving work associate feedback. This includes an annual work associate survey. This survey is not just about work. It is also about their total lives. Insights from this annual survey drives the company’s wellness focus. For example, from a recent survey Johnson & Johnson discovered stress was a major issue. They are now designing and implementing programs to help their work associates reduce or better manage stress.
Trust, trust, trust! Johnson & Johnson is heavily focused on winning and maintaining the trust of their work associates. For something as personal as health the issue of trust is a key determinate of whether an initiative engages or repeals a work associate.
Success can breed success. Johnson & Johnson has built a work associate culture of trust and participation. In this type of culture success does breed success. There is shared enthusiasm. There is empathy. Work associates are engaging work associates to enable personal health success.
Progress is the key performance metric. Johnson & Johnson is a professionally run business. They have detailed performance metrics for running all aspects of their business. But they also appreciate that humans are not machines. Their human health metric is progress. Their focus is on timing. People do have cycles in their lives. People require a holistic approach that encompasses both the physical and mental. It engages on both work and home issues. Progress, a holistic approach and timing are key elements in crafting a successful workplace wellness program.
Workplace health program bottom line
The accelerating pace of healthcare costs requires every businesses’ attention. Healthier employees needing less medical attention is an obvious solution for lowing medical costs. The challenge is: What should be done? Workplace wellness programs can be an answer. Johnson & Johnson has demonstrated that it can work to improve work associates’ health and lower healthcare costs.
About the author
Bill Roth is the author of The Boomer Generation Diet, now on sale at Amazon! Here’s what Jen Boynton, Editor in Chief of Triple Pundit says about the book: ”Written in Bill Roth’s lovable, relatable tone. The Boomer Generation Diet is a must-read for any Boomer who is looking to jumpstart their health and have fun at the same time. I hope my parents read it!” Follow Bill on Twitter and Facebook.