Cost Effectiveness for the Workplace

 

corporateThe Cost Effectiveness of Workplace Wellness Programs

 

Here are just a few of the many success stories of companies around the nation that offer employee fitness programs. Scroll down to read more on these topics:

 Injury Prevention

                                                                 Exercise Saves Companies Money

                                                                 Corporate Wellness is a Healthy Market

 

Take note of these interesting corporate wellness statistics

Success Stories

• Some 25 percent of U.S. companies were running corporate wellness programs in 1996.
In 2014 up to 90%

• Corporate wellness statistics depict a savings of $2.30 to $10.10 for every $1 spent on
wellness initiatives.

• Coca-Cola’s fitness program recouped $500 per year per employee, despite the fact that
only 60% of their staff was enrolled.

• AIpsos-Reid corporate wellness statistics paper in 2004 found the three major preventable
causes of staff absenteeism to be mental health (anxiety and/or depression), stress and a
bad relationship with a supervisor.

• Corporate wellness statistics from Prudential Insurance reveal a benefit expense of $312
per person enrolled in their wellness system, but $574 per non-enrolled employee.

•At the Coors Brewing Co., corporate wellness statistics illuminate a savings of $5.50 per $1
spent on fitness, with a positive side-effect of participant absenteeism dropping by 18%

• Johnson & Johnson’s Health and Wellness program has produced average annual healthcare savings of $224.66 per employee.(Source: National Athletic Trainers Assn.)

• Discovery Communications in Silver Springs, MD, states that investing in employee fitness
can have immediate returns. The company started a Body Challenge in 2004. 800 out of
6000 employees participated and lost a collective 4600 pounds. The company’s wellness
program consists of health and nutrition classes, weight-loss groups, and the 8-week Body
Challenge.(Source: Newsweek, 6/26/06)

• Daimler Chrysler Company’s weight-loss initiative resulted in savings of $1.2 million, or $5
to $16 per participant each month, depending on individual risk factors.(Source:
Washington Business Group on Health)

• Connecticut –based Northeast Utilities saved about $1.1 million with its wellness program.
The return on investment was calculated at $1.60 for every $1 spent.(Source: Denver
Post)

• The American Journal of Health Promotion published a study in 1999 that showed that
Citibank spent $1.9 million on health management which resulted in a $7 million savings
in reduced medical costs and absenteeism.(Source: Pittsburgh Post-Gazette)

• Coors Brewing Co., had a return of $6.15 per $1 invested over six years, according to a
study by health care specialist Zoezi Inc. That same study showed Steelcase had a return
of $5.80 for every $1 spent over five years, Equitable Life Assurance $5.52 over its first
year, and Travelers Corp., $3.40 over its first year.(Source: Pittsburgh Post-Gazette)
Almost 50% of medical costs are incurred due to illnesses that can be avoided with small
life-style changes. Corporations have begun to realize the importance of healthy
employees and are working encourage employees to lead increasingly healthier lifestyles.

Corporate wellness programs are well worth the time and effort invested in them. The success record of companies utilizing these programs indicates that an employee who is happy and healthy is more productive and motivated, stays away from work due to illness less often and remains employed with the company for a longer time. Investing in employee’s health is beneficial to the employee as well as to the company.
The volume of data to support the benefits with respect to organizations that have initiated corporate fitness programs is overwhelming. When viewed from a cost benefit standpoint, an effective fitness program will always handsomely reward the organization as well as the individual participants.

  • General Electric compared the health care costs for members of its fitness program with those for non-members. During the 18 months of the study, health care costs for fitness program members decreased by 38%. In contrast, the health care costs for fitness program members decreased by 38%. In contrast, the health care costs of non-members increased 21%.

Business and Health, Nancy Coe Bailey, November 1990

  • The Mutual Benefit Life Insurance Company of Newark, New Jersey, found that the average medical claims of its workers who participated in the corporate fitness program were 70% lower than those of non-participants. Workers who exercised missed 40% fewer work days.

American Demographics, Judith Waldrop, June 1991

  • Tenneco began an employee fitness program and found that the average annual medical claim was at least 50% lower for participants than non-participants.

Journal of Occupational Medicine,
Dr. William Baun, Dr. Edward Bernacki, and Dr. Shan Tsai, January 1986

  • Steelcase found that medical claims were 55% lower for participants in its corporate fitness program than for non-participants over a six-year period. The average medical claim for an inactive employee was $869.98: the average medical claim for the active employee only $478.61!

American Journal of Health Promotion,
Louize Tze-ching Yen, et al., September/October 1991

In addition to lowering costs associated with illness, employee fitness programs also help companies attract health-conscious, high-achieving employees, improve employee satisfaction, boost morale and commitment. Any way you look at it, employee fitness programs are a win/win proposition!

  • Published research investing the economics of physical activity has reported improved health and LOWER health care costs, absenteeism, and disability associated with exercise and fitness programs.

Larry R. Gettman, Ph.D.
President’s Council on Physical Fitness & Sports

Injury Prevention

NOVACARE INC., THE LARGEST EMPLOYER OF PHYSICAL THERAPISTS In the United States, reports that 66 percent of physical therapists in a recent survey said they were treating more workplace injuries today than five years ago. Workers in the 36 to 45 year-old age group had the most on-the-job injuries. Where are the majority of injuries in this group?

  • neck: 65%
  • back: 60%
  • hand: 50%
  • shoulder: 45%
  • knee: 40%
  • carpal tunnel syndrome: 56%

The physical therapists surveyed believed 56 percent of these injuries were preventable, which points to the wisdom of functional training that strengthens clients’ weak muscles and teaches correct posture, lifting techniques, etc.

IDEA Personal Trainer JUNE 1997

Exercise Saves Companies Money

  • Conners (1992) reported that GE Aircraft employees who were members of the fitness center for three years lowered their average annual health care costs from $1,044 to $757 per individual. In contrast, non-members increased their average annual health costs from $773 to $941 per person.
  • Shephard (1992) reported a zero increase in medical costs for a company with a fitness program and a 35 percent increase in medical costs for a company with NO fitness program!
  • In a study that spanned 14 years, Cady (1985) showed that the fittest employees had only one-eighth as many injuries as the least fit employees and that unfit employees incurred twice the injury costs.
  • Gettman (1986) found that per person, physically active employees at Mesa Petroleum Company spent $217 less on medical claims and took 21 fewer sick time than sedentary employees.
  • Baun (1986) showed that exercisers in a Tenneco fitness program had $553 lower health care costs per person compared to non-exercisers.
  • Describing an Army staff project, Karch (1988) noted that participants who logged the most hours of exercise had the greatest decrease in the number of health services used.
  • Tsai et al. (1988) showed that injury rates and costs associated with injuries decrease as physical activity levels increase.
  • Shore et al. (1989) showed that injury rates and costs associated with injuries decrease as physical activity levels increase.

It has been established that physical inactivity increases the risk for several health problems and diseases (Blair et al., 1992). Logic tells us that if a person is inactive (sedentary) and develops more health problems than an active person, the sedentary, unhealthy, or diseased person is going to spend more dollars on health care than the healthy, active person. Therefore, physical activity that leads to healthier living will be economically beneficial because fewer dollars will be spent on health problems.

The report was published by the President’s Council on Physical Fitness and Sports, at (202) 272-3421(202) 272-3421 or fax (202) 504-2064.

Corporate Wellness is a Healthy Market

More than 81% of American Businesses with 50 or more workers have some kind of employer-sponsored wellness program, according to the Wellness Councils of America. (WELCOA). These range from lunch-time lectures on various health topics, to group exercise classes in a conference room, to full service, on-site gyms. Employers invest in wellness programs to LOWER ABSENTEEISM and HEALTH-CARE COSTS while IMPROVING PRODUCTIVITY and EMPLOYEE MORALE.

Many of WELCO’s 3,000-member companies see these programs as the key to TRIMMING SPIRALING INSURANCE COSTS, which EAT UP MORE THAN HALF A COMPANY’S PROFITS.

  • Spending just $50 per person, Union Pacific Railroad achieved a net saving of $1.26 million.
  • CIGNA’s Healthy Babies prenatal program delivered average savings of $5,000 per birth.
  • The Du Pont Co. credits workplace health programs with reducing absenteeism 14 percent.
  • The Travelers Corp. saved an estimated $146 million in benefits costs while sick leave dropped 19 percent.

Allison Ashton – ACE Certified News, Vol. 4, Number 2, Feb. Mar. 1998

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