Where Are The Health Care Dollars Going?
U. S. health care costs have increased from $1,100 per person in 1980 to $7,900 in 2009. Currently $1.5 trillion, 75 percent of all health care spending, is devoted to treating chronic diseases which are often preventable. Ninety-nine percent of all Medicare dollars spent are linked to chronic disease. Obesity and complications (diabetes, cancer, and heart disease) are responsible for an estimated $147 billion a year. Health care reform must address coverage for all Americans while dramatically reducing costs. Failure to address the situation will prevent American companies from competing in the global marketplace, increase taxes, and undermine our economy.
More than 130 million Americans suffer from chronic disease and millions of lives are cut short unnecessarily. The Partnership for Prevention report claims that better utilization of just five preventive services would save more than 100,000 lives annually. Eliminating just three risk factors – poor diet, inactivity, and smoking – would prevent 80 percent of heart disease, stroke, Type 2 diabetes, and 40 percent of all cancers in the U. S.
The Greatest Public Health Threat Our Nation Has Ever Faced
A recent study conducted by Emory University revealed that obesity is the fastest growing public health challenge our nation has ever faced. The Center for Disease Control (CDC) attributes the problem to environments that promote increased food intake, unhealthy foods, and physical inactivity. Obesity is defined as having a body mass index (BMI) of 30 or greater which is calculated by dividing weight in kilograms by height in meters squared. For those of us who haven’t memorized the metric conversions and can’t perform the calculations in our heads, The U.S. National Institutes of Health has an online BMI calculator.
The rates of obesity have increased from 12 percent in 1989 to 28 percent in 2010. If the current trend continues, half of the adult population will be obese by the year 2020. Direct health care costs for obesity are expected to climb to $344 billion (21 percent of the nation’s direct health care spending) unless the current trend is halted (The Future Costs of Obesity, 2009). The 2009 report on obesity in America produced by the Trust for America’s Health and the Robert Wood Johnson Foundation indicates the rates of obesity increased for 23 states and did not decline for any states between 2008 and 2009. Obesity rates among children have climbed to an unprecedented 30 percent (Obesity Rates Continue to Climb, 2009). Dr. David L. Katz, director of the Yale University School of Medicine Prevention Research Center states, “It truly is a public health crisis of the first order, driving many of the trends in chronic disease, in particular the ever-rising rates of diabetes.” (The Future Costs of Obesity, 2009).
According to the New England Journal of Medicine, smoking rates have dropped by 20 percent in the last 15 years. Unfortunately, any health benefits we should be realizing from the decline in smoking have been offset by the obesity rates that have shot up by 48 percent in the same time frame (Mertens, 2009). What should we conclude? As a nation we tackled smoking as a public health threat. The numbers speak for themselves. We can do the same thing with the obesity epidemic.
Reversing the Trend
Raising public awareness of the seriousness of this threat is a starting point but is not enough to provide the impetus for change. Reversing the trend will require a full scale national campaign involving evidence-based approaches. While there is no specific template for health initiative program design, successful programs involve community, schools, health care systems, and workplace intervention. The Partnership to Fight Chronic Disease (PFCD) suggests the following five elements are essential:
- Removing barriers and empowering Americans to take control of their health
- Educating Americans to see obesity as a serious medical condition that is life threatening
- Ensuring that fear about the stigma of obesity does not eclipse the need to combat it
- Redesigning our health care system to treat obesity like a preventable medical condition
- Engaging employers and communities to get them invested in promoting wellness (The Lewen Group, 2009)
The U. S. workforce is truly the backbone of our economy. Employers are a critical piece of the solution to the current health care crisis and obesity epidemic. Businesses need strategies for developing sustainable, adaptable programs that work to improve employee health and lower costs. Human Resource professionals are uniquely positioned to serve as catalysts in their organizations to educate and support employees through programs that promote wellness. Properly designed wellness programs can play a pivotal role in cultural reform and turning the tide on the obesity epidemic.
Employee absenteeism and presenteeism due to chronic illness has a detrimental affect on profitability. Almost 80 percent of workers have at least one chronic condition and 55 percent have more than one chronic condition. Absenteeism is defined as work missed due to sick days. Presenteeism is defined as the loss of productivity due to employees who report to work but are less productive due to illness. Lost economic output associated with absenteeism and presenteeism is costing American businesses $1 trillion a year (U.S. Workplace Wellness Alliance, 2009). Wellness programs can improve workforce morale, improve productivity, reduce absences, attract and retain employees, reduce costs, improve workforce safety, promote corporate image, and fulfill social responsibility.
Many businesses were ahead of the curve and are realizing a return on their investment in employee wellness programs. IBM has saved $175 million dollars through implementation of wellness programs (Partnership for Prevention, 2007).
Lincoln Industries is a manufacturing plant with 565 employees. They have a multifaceted wellness program that rewards behaviors. One of the coveted rewards employees can aspire to is a three-day, company-paid trip to climb a 14,000-foot peak in Colorado. Lincoln has reported a $2 million annual savings in health-care costs. They spend approximately $4,000 per employee. Additionally, workers’ compensation costs have been reduced by $360,000 per year. The ROI for this program is 5:1 (Design Matters, 2010).
In 2005 Safeway grocery chain implemented their Healthy Measures program. They have made continuous improvements each year. Safeway’s plan utilizes a provision in the 1996 Health Insurance Portability and Accountability Act which allows differentiating premiums based on behaviors. CEO, Steven Burd stresses the key to successful plans lies in rewarding behavior. Safeway is committed to building a culture of health and fitness by addressing behaviors linked to chronic disease such as smoking, obesity, blood pressure, and cholesterol (Burd, 2009). During the four year period following implementation, Safeway’s health care costs remained constant while most American companies have experienced a 38 percent cost increase over the same four-year period. In addition to the Healthy Measures program, Safeway supports employee behaviors by offering:
- A state-of-the-art fitness center near Safeway’s headquarters
- Free lunch at the company cafeteria for every eight visits to the gym
- Subsidized cafeteria, which offers lots of vegetarian fare
- Portion size, calorie count, cholesterol and fiber count posted for all prepared meals in the cafeteria (Rodman & Gathright, 2009).
Programs that combine a culture of wellness with incentives that reward healthy behavior have proven to be far more effective than traditional wellness programs that have had disappointing adherence rates. Price Waterhouse Coopers found that less than 15 percent of eligible employees enroll in traditional wellness programs. However, if they received some form of incentive employees are two to four times more likely to enroll. In another study by Suffolk University 73 percent of Americans surveyed would change their behavior if they could save money (Donnelly, 2009).
Are You Leading Change?
As with any change initiative, creating a culture of health and wellness for your organization will have its unique challenges. However, the alternative is not attractive. Change is inevitable–growth is optional. Your organization will experience change, but the question is will you be out in front leading positive change or reacting to a crisis after it erupts? American business leaders should exercise the opportunity to initiate a culture of health and wellness in their organizations not only because it is socially responsible, but it is good for the bottom line as well. Executives who exhibit strong vision and model desired behaviors will have a distinct advantage over those who sit back and wait to see what unfolds.
Burd, Steven A. “How Safeway Is Cutting Health-Care Costs.” Wall Street Journal, 12 June 2009. Web. 8 Jan. 2010.
Design Matters: Health Promotion ROI Closely Linked to Evidence-Based Programming. Rep. Atlanta: Institute for Advances in Policy Solutions, 2009. Web. 4 Jan. 2010.
Donnelly, Julie. “Massaging employee health: Financial incentives change behaviors, experts say.” Boston Business Journal (2009).
The Lewin Group, comp. Keeping America Healthy: Essential Elements of Successful Programs. Rep. Partnership to Fight Chronic Disease, June 2008. Web. 30 Dec. 2009.
Mertens, Maggie. “Obesity Epidemic Cancels Out Anti-Smoking Gains.” Web log post. NPR’s Health Blog. National Public Radio, 2 Dec. 2009. Web. 11 Jan. 2010.
“Obesity Rates Continue to Climb.” Forbes. HealthDay News, 1 July 2009. Web. 12 Jan. 2010.
Rodman, Juliet, and Fiona Gathright. “Safeway’s Wellness Incentive Program.” Wellness Corporate Insights (6 Jan. 2009). Wellness Corporate Solutions. 6 Jan. 2009. Web. 11 Jan. 2010.
Trott, Bill, ed. “More Amercans than ever are obese: CDC.” Reuters. Thomson Reuters 2009, 8 July 2009. Web. 11 Jan. 2010.
United Health Foundation, American Public Health Association, and Partnership for Prevention. The Future Costs of Obesity: National and State Estimates of the Impact of Obesity on Direct Health Care Expenses. Rep. 2009. Print.
U.S. Partnership for Prevention. National Commission on Prevention Priorities. Prevention Care: A National Profile on Use, Disparities, and Health Benefits. Partnership for Prevention, 7 Aug. 2007. Web. 5 Jan. 2010.
U.S. Workplace Wellness Alliance. Partnership to Fight Chronic Disease. The Burden of Chronic Disease on Business and U.S. Competitiveness. By Kenneth E. Thorpe, PhD., Anthony C. Wisniewski, and Garry M. Lindsay. 2009 Almanac of Chronic Disease, 2009. Web. 10 Jan. 2010.