Cut Health Care Costs by Establishing a "Culture of Health"

Jerry Kornfeld MD, Speaker Visit Website

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:

• 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.
• 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.