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Cut Health
Care Costs by Establishing a “Culture of Health”
By
Vistage speaker Jerry Kornfeld, M.D.
As every CEO and
company owner knows, health care costs have skyrocketed over the past
several years. In fact, many Fortune 500 companies now report that the
majority of their profits are being eaten up by these outrageous expenses.
In order to deal with
these increased costs, many employers have resorted to adopting managed care
strategies of reducing benefits or cost shifting to employees.
Unfortunately, these strategies alone cannot solve the problem. In fact,
they actually make it worse by depressing the value of health benefits and
directly impacting employee recruitment and retention. A larger and more
effective solution involves establishing a "culture of health" in today's
companies.
What exactly does that
mean?
Business owners need to
think outside of the box and establish an environment that gives them some
control over the crisis. This alternative strategy also depends upon
improving the health status of employees so that less medical care is
required.
Both healthy and
chronically ill employees will benefit from an improvement in their
wellbeing, regardless of their current health levels. In addition, a
positive program of disease management and prevention helps to reduce
medical costs and has a direct impact on workers compensation, disability
costs, absenteeism and productivity. This approach also complements health
care consumerism as a strategy for health improvement and benefit cost
reduction.
The bottom line is that
getting your employees involved in a culture of health will result in
improved employee health, outlook and satisfaction, as well as cost savings
to you.
Where Do You Stand?
The most effective
workplace health promotion involves a comprehensive program that aims at
improving four key areas:
-
Physical environment.
A healthy, well-designed, safe place to work.
-
Psychosocial
environment.
A culture that supports employee wellbeing.
-
Personal resources.
Having resources available to assist in coping with stresses when needed.
-
Personal health
practices.
The opportunity to learn how to make lifestyle choices that support
long-term health and wellness.
To determine how well your
organization measures up to these criteria, answer the following questions:
-
Do you have a strategic approach in place to
develop and sustain a healthy workplace?
-
Do your executives demonstrate (through their
comments and actions) a commitment to the management of a healthy
workplace?
-
Do you have a formal program in place to
evaluate employee health and health needs?
-
Do you have methods in place that make it easy
for employees to obtain health information so that they have help in
making lifestyle changes?
-
Have you suggested incentives to help your employees adopt this culture of
health?
Nearly 50 percent of
Americans report having a chronic illness, and they account for 75 percent
of our national spending on health care. These high numbers have a direct
impact on costs, disabilities, increased absenteeism, lower productivity,
safety and morale. You can't control the insurance companies and their fees,
but you certainly have some control over your employees. Establishing a
culture of health will help with a long-term strategy of health care
management.
Currently, health care
costs are estimated to cost $3,000 to $4,000 per employee, per year. Yet, 80
percent of all illness is preventable. For example, heart disease is the
number one killer of men and women in America, but it is mostly a lifestyle
disease. As I mention in my soon-to-be-released book, "Your Hundred Year
Heart," the majority of those who succumb to heart disease could have
prevented its occurrence by changing a few habits and adopting a healthier
lifestyle.
A Program that Works
How do you create a
culture of health?
Start by explaining to
new employees that you're interested not only in their occupational skills,
but also in their good health. From day one, let them know about your
commitment to providing exposure to all of the latest methods of dealing
with their illness and providing programs to help them prevent additional
medical problems. To succeed, the program must involve a collaborative
approach between employer and employee. The end result is healthier and
happier employees and an improved bottom line through lower health care
costs.
The lifestyle changes
promoted by a culture of wellness and its impact on costs have been
documented by many large corporations. For example:
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DuPont reported that for every dollar invested
in workplace health programs, they received a $1.42 benefit in lower
absenteeism over a two-year period.
-
Johnson and Johnson reduced their absenteeism
by 15 percent within two years after introducing their wellness programs.
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After analyzing claims over a two-year period, Sony Corp. of America found
that 50 percent of its indemnity plan costs were incurred by employees
with medical conditions that were life-style related or that could be
changed.
As a speaker, consultant, doctor and former HMO medical
director, my recommendation is that every CEO and business owner strive to
establish a culture of wellness for their company. Certainly, every business
decision involves a careful risk/reward analysis. But when it comes to
investing the dollars to develop this a culture of health for your
employees, the rewards far outweigh the risk.
Created for Vistage View.
Copyright 2006, Vistage International, Inc. All rights reserved
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