Time for employers to actively reduce healthcare costs

KEY IDEA: Millennials are on track to see their health decline and healthcare costs skyrocket over the next 10 years. Creating enduring change in physical activity is hard but employers need to get involved in employee wellness if they are to reduce costs to both the company and employees.

According to the Rand Corporation “regular physical activity has many health benefits and is associated with a lower risk of hypertension, cardiovascular disease, breast and colon cancer, as well as diabetes. It is also associated with a positive impact on mental health, possibly reducing the risk of the onset of dementia, as well as improving anxiety and depression”. So why aren’t employers doing more to get involved in employee wellness?

It is estimated that every year, physical inactivity is associated with up to 5 million deaths worldwide, and contributes to healthcare expenditures, as well as lost productivity. The ROI is there: by 2050 global GDP could increase by between US$314 billion and US$446 billion if the least active members of the population reach at least 150 minutes of moderate activity per week. Reducing presenteeism — when people are at work but are not able to function to the best of their ability — is responsible for about 70 percent of the economic GDP gains, pointing to a significant relationship between inactivity and productivity loss.

Large employers across the country are expected to spend an average of $3.6 million on wellness programs in 2019 to support a healthier and more productive workforce which is far too low. The percentage of employers offering incentives to spouses has increased, jumping from 54 percent in 2018 to 58 percent in 2019. The average dollar amount of incentives for spouses increased as well, going from $596 in 2018 to $601 in 2019 but that alone is not enough and may be too low.

Despite all the employees currently engaged with employer wellness programs, there are still a significant number of non-participants — nearly 60% — who remain outside of these programs. So what’s holding them back? Inconvenient program options, a non-supportive company culture, and trust and privacy concerns all fall near the top of the list.

Billions of dollars in global healthcare could be saved by improving physical activity rates. Overall the models estimate that between US$8.7 billion and US$11.2 billion in present global healthcare expenditure could be saved by making people physically more active, with those savings rising to between $16 billion and $20.6 billion by 2050.

To say that this is significant is a huge understatement. So what can be done?

1ne: Integrate online wellness into company intranet portals.

2wo: Remind employees to get annual physical exams.

3hree: Incentify employees to join health clubs and lose weight.

4our: Ensure employees are given enough time to exercise.

5ive: Bring in health and wellness experts to meet with employees.

Finally, it’s time to really get serious about employee health. Imagine logging on to the company intranet and finding out that your life expectancy is dramatically short based on your weight and the amount of exercise you get? That would be one hell of a wake-up call.

The other, politically incorrect solution, would be to charge overweight and unhealthy employees more money for health coverage based on physicals. This argument could be supported by the fact that healthy employees are paying for unhealthy employee habits.