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The Rising Costs of Healthcare: Employee Wellness as a Business and Government Challenge

The increasing healthcare costs in the U.S. pose significant challenges for both businesses and the government. Premiums have fluctuated dramatically over the years, with recent periods showing double-digit growth rates. Chronic diseases, obesity, and associated healthcare expenses contribute significantly to these rising costs. Furthermore, workplace wellness programs can reduce medical expenses and improve employee productivity. It is essential for organizations to prioritize wellness initiatives to combat these issues and foster a healthier workforce.

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The Rising Costs of Healthcare: Employee Wellness as a Business and Government Challenge

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  1. Why Employee Wellness?

  2. Health Costs Challenge Business & Government Source: CMS

  3. > Spending Leads To > Premiums • Mid-1990s: premiums fell sharply • 2001 – 2004: premiums grew at double digit rates Source: KFF/HRET; Bureau of Labor Statistics; U.S. Consumer Price Index

  4. Health Benefit Costs, Per Active Employee Source, Mercer HR Consulting, “Health Benefit Costs Slow for A Third Year ...”, Nov. 20, 2005

  5. Why Are Healthcare Premiums Increasing? Source: PricewaterhouseCoopers The Factors Fueling Rising Healthcare Costs 2006

  6. Reasons Why Utilization Is Increasing

  7. Increasing Prevalence of Chronic Disease Projected Number of People with Chronic Conditions (in millions) Source: Wu, Shin-Yi, and Green, Anthony, “Projection of Chronic Illness Prevalence and Cost Inflation,” RAND Corp., October 2000

  8. The Obesity Burden • 64%: Increase in diabetes patients, 1987-2002 • 1,000%: Increase in obesity-related costs, 1987-2002 • $1,244: Annual health care spending difference, normal weight v. obese adults. Source: Health Affairs, June 2005 % of U.S. Health Spending On Obesity-linked Conditions

  9. “Un-Wellness” Costs (in Billions) Source: Health Promotion Advocates, from CDC, NIH, National Institute of Diabetes and Digestive and Kidney Diseases, and Journal of Occupational Medicine.

  10. $5,520 $3,460 $3,039 $2,199 Edington, AJHP. 15(5):341-349, 2001 Excess Medical Costs Due to Excess Risks

  11. Excess On-The-Job Loss Due to Excess Risks 14.7% Burton, Chen, Conti, Schultz, Pransky, Edington. JOEM. 47(8):769-777. 2005

  12. HRA Participants Non-Participants (N=4,649) Low Risk 0-2 Risks (N=685) Medium Risk 3-4 Risks (N=520) High Risk 5+ Risks (N=366) WC Claims STD Claims Absence Record Disability Claim 25.4% 23.4% 49.9% 61.3% 30.2% 30.8% 63.1% 72.5% 30.2% 29.6% 41.0% 64.4% 38.0% 46.7% 69.7% 81.7% Percentage of Employees with a Disability Claim by Risk Status Wright, Beard, Edington. JOEM. 44(12):1126-1134, 2002

  13. What Can Schools Do? Create awareness of need Create a sense of urgency Empower with resources Build and support a culture of wellness • Policies • Environment • Include everyone

  14. What Can Schools Do?

  15. Devastating Consequences of Doing Nothing • Today’s generation of American children may be the first in modern history to live shorter lives than their parents U.S. Surgeon General Richard Carmona March 2, 2004

  16. No Data <10% 10%–14% Obesity Trends* Among U.S. AdultsBRFSS, 1985 (*BMI 30, or about 30 lbs overweight for 5’4” person)

  17. No Data <10% 10%–14% Obesity Trends* Among U.S. AdultsBRFSS, 1986

  18. No Data <10% 10%–14% Obesity Trends* Among U.S. AdultsBRFSS, 1987

  19. No Data <10% 10%–14% Obesity Trends* Among U.S. AdultsBRFSS, 1988

  20. No Data <10% 10%–14% Obesity Trends* Among U.S. AdultsBRFSS, 1989

  21. No Data <10% 10%–14% Obesity Trends* Among U.S. AdultsBRFSS, 1990

  22. No Data <10% 10%–14% 15%–19% Obesity Trends* Among U.S. AdultsBRFSS, 1991

  23. No Data <10% 10%–14% 15%–19% Obesity Trends* Among U.S. AdultsBRFSS, 1992

  24. No Data <10% 10%–14% 15%–19% Obesity Trends* Among U.S. AdultsBRFSS, 1993

  25. No Data <10% 10%–14% 15%–19% Obesity Trends* Among U.S. AdultsBRFSS, 1994

  26. No Data <10% 10%–14% 15%–19% Obesity Trends* Among U.S. AdultsBRFSS, 1995

  27. No Data <10% 10%–14% 15%–19% Obesity Trends* Among U.S. AdultsBRFSS, 1996

  28. No Data <10% 10%–14% 15%–19% ≥20 Obesity Trends* Among U.S. AdultsBRFSS, 1997

  29. No Data <10% 10%–14% 15%–19% ≥20 Obesity Trends* Among U.S. AdultsBRFSS, 1998

  30. No Data <10% 10%–14% 15%–19% ≥20 Obesity Trends* Among U.S. AdultsBRFSS, 1999

  31. No Data <10% 10%–14% 15%–19% ≥20 Obesity Trends* Among U.S. AdultsBRFSS, 2000

  32. Obesity Trends* Among U.S. AdultsBRFSS, 2001 No Data <10% 10%–14% 15%–19% 20%–24% ≥25%

  33. Obesity Trends* Among U.S. AdultsBRFSS, 2002 (*BMI 30, or ~ 30 lbs overweight for 5’4” person) No Data <10% 10%–14% 15%–19% 20%–24% ≥25%

  34. Obesity* Trends Among U.S. AdultsBRFSS, 2003 No Data <10% 10%–14% 15%–19% 20%–24% ≥25%

  35. Diabetes Trends* Among Adults in the U.S.(Includes Gestational Diabetes)BRFSS 1990 Source: Mokdad et al., Diabetes Care 2000;23:1278-83.

  36. Diabetes Trends* Among Adults in the U.S.BRFSS 1991-92 Source: Mokdad et al., Diabetes Care 2000;23:1278-83.

  37. Diabetes Trends* Among Adults in the U.S.BRFSS 1993-94 Source: Mokdad et al., Diabetes Care 2000;23:1278-83.

  38. Diabetes Trends* Among Adults in the U.S.BRFSS 1995-96 Source: Mokdad et al., Diabetes Care 2000;23:1278-83.

  39. Diabetes Trends* Among Adults in the U.S.BRFSS 1995 Source: Mokdad et al., Diabetes Care 2000;23:1278-83.

  40. Diabetes Trends* Among Adults in the U.S.BRFSS 1997-98 Source: Mokdad et al., Diabetes Care 2000;23:1278-83.

  41. Diabetes Trends* Among Adults in the U.S.BRFSS 1999 Source: Mokdad et al., Diabetes Care 2001;24:412.

  42. Diabetes Trends* Among Adults in the U.S.BRFSS 2000 Source: Mokdad et al., J Am Med Assoc 2001;286:10.

  43. Diabetes Trends* Among Adults in the U.S.BRFSS 2001 Source: Mokdad et al., J Am Med Assoc 2001;286:10.

  44. 3 Keys to Success • Keep It Simple: Focus on a few key issues; aim for high participation rates • Communicate Effectively: Build infrastructure for future success • Reward Healthy Behaviors: Celebrate success

  45. Where to Begin • Know your needs • Set realistic goals and objectives • Evaluate your resources • Involve the “right” people • Develop a long-term strategy • It’s all in the execution – DO SOMETHING

  46. Know Your Population’s Needs Physical activity Healthy eating Weight management

  47. Set Realistic Goals and Objectives • GOALS • Faculty and staff will be more active • Faculty and staff will improve eating habits • OBJECTIVES • At least 40% of faculty and staff will complete 8-week physical activity challenge • Healthy food items will be labeled in cafeteria and vending machines

  48. Evaluate Your Resources • In Your School • Ways to communicate • Health teachers, physical education teachers, food service professionals, school nurses, others • Resources provided by Bower Foundation • In Your Community • Non-profit health agencies • Local hospitals • Home extension service

  49. Involve the “Right” People • People who want to be involved • Those with access to resources • Decision makers • Representative Committee • Meet monthly • Identify opportunities • Coordinate baby steps • Build infrastructure

  50. Develop a 3-Year Strategy • YEAR 1 • Start with small simple steps • Focus on participation, and measure it • Focus on FUN • YEAR 2 • Build on success • Focus on outcomes, and measure them • YEAR 3 • Continue to build on success • Tell your school’s story to others

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