WELCOA




Building a Well Workplace: Six Reasons Why Health Promotion Makes Good Business Sense

Today, more than 81% of American businesses with 50 or more employees have some form of health promotion program—the most popular being exercise, smoking cessation classes, back care programs, and stress management. Most employers offer wellness programs simply because they think the benefit is worth the cost. Yet business leaders continue to ask themselves how to control huge annual increases in health insurance premiums and healthcare costs.

For many companies, medical costs can consume half of corporate profits—or more. Some employers look to cost sharing, cost shifting, managed care plans, risk-rating, and cash-based incentives. But these methods merely shift costs. Only worksite health promotion stands out as the long-term answer for keeping employees well in the first place.

Below you’ll find six reasons why worksite wellness has become a national imperative. These reasons will challenge you to think twice about the investment you are making in your most valuable asset—your employees—as well as the impact this investment can have on your bottom line.



REASON #1: Although we spend more dollars on health care than any other industrialized nation, our citizens are not the world’s healthiest.

1. Our nation’s population is largely sedentary.
  • Over 60% of adults do not achieve the recommended amount of regular physical activity and 25% of all adults are not active at all.

  • Approximately one half of the youth in this country are not active on a regular basis.

    • Source: Surgeon General’s Report on Physical Activity & Health, 1996.

    2. Obesity is reaching monumental proportions.
  • According to the Centers for Disease Control and Prevention, almost 1 in 5 American adults is now considered obese.

  • Over half of all Americans are overweight.

    • Source: Centers for Disease Control & Prevention (CDC) and National Institute of Diabetes & Digestive & Kidney Diseases.

    3. Despite overwhelming evidence, tobacco use continues to be popular.
  • Since the release of the Surgeon General’s Report on Smoking and Health in 1964, Americans have consumed 17 trillion cigarettes and approximately 10 million people in the United States have died from smoking related causes.

  • Sadly, 3,000 young people begin smoking every day.

    • Source: The American Cancer Society, CDC.

    4. The World Health Organization describes stress as a “World Wide Epidemic.”
  • 72% of Americans experience frequent stress related physical or mental conditions.

  • 75-90% of visits to Primary Care Physicians are for stress related problems.

    • Source: Murphy, American Journal of Health Promotion, 1996.

    5. High risk alcohol consumption silently takes its toll on American’s health.
  • Excessive alcohol consumption causes more than 100,000 deaths every year in the United States.

  • 20-40% of all Americans in general hospital beds are being treated for complications of alcoholism.

    • Source: National Council on Alcohol & Drug Dependency, 1995.

    6. Chronic health conditions continue to plague the American population.
  • According to the National Center for Health Statistics and the National Health Survey, the typical US adult over the age of 18 has seven chronic health conditions.

  • In addition, more than 90 million Americans are presently living with chronic illnesses.

    • Source: National Center for Health Statistics.



    REASON #2: Much of the illness in the US is directly preventable.

    Over 95% of our nation’s health expenditures, including most of the billions of dollars employers spend on health coverage, is committed to diagnosing and treating disease only after it becomes manifest.

    Source: Partnership for Prevention.

    Researchers have estimated that preventable illness makes up approximately 70% of the burden of illness and the associated costs.

    Source: Fries, New England Journal of Medicine, 1993.

    Of the 2+ million people who die in the US each year, approximately 1 million of these deaths are due in large part to preventable causes. In fact, the leading causes of death in the United States in 1990 were:

  • tobacco (400,000)

  • diet and activity patterns (300,000)

  • alcohol (100,000)

    • Source: McGinnis & Foege, JAMA, 1993.



    REASON #3: Healthcare costs are an issue of significant concern.

    Our country spends more dollars on healthcare than any other country in the world.
    In fact we spend over $1 trillion dollars on healthcare, the equivalent of 13.5% of the gross domestic product.

    Source: Fries et al, New England Journal of Medicine, 1993.

    Healthcare coverage per person totals almost $4,000 per year.
    Lifetime costs are estimated at $225,000 per person.

    Source: Fries et al, New England Journal of Medicine, 1993.

    National health expenditures are projected to reach $2.1 trillion by the year 2007.
    According to the Kiplinger Washington Letter, the nation’s healthcare bill will jump more than 100% by 2007. What’s more, as a share of the GDP, health spending will grow from 12% now to almost 17% in just eight years.

    Source: Kiplinger Editors, The Kiplinger Washington Letter, 1998.

    The number of people without health insurance continues to rise.
    In fact, in 1997 the number of people without health insurance reached the highest level in a decade at 43.4 million, or 16.1% of the population.

    Source: Iglehart, New England Journal of Medicine, 1993.



    REASON #4: The worksite is an ideal setting to address health and well-being.

    The majority of Americans work.
    In fact, of the nation’s 203 million people over the age of 16, 136+ million (67.1%) are employed in the U.S workforce.

    Source: Chapman, Proof Positive, 1996.

    People spend most of their waking hours at work.
    Believe it or not, the average workweek has grown to almost 50 hours per week. Indeed, the typical employee now works the equivalent of one extra month per year as compared to his or her counterpart in 1970. More than one-third of Americans are now working 10+ hours a day and 39% are working on the weekends.

    Source: Schor, The Overworked American, 1992.

    Employers have a vested interest in health-related issues.
    Because private employers and employees are the primary purchasers of health care through the insurance premiums they pay together for coverage, it makes a great deal of sense to address individual health and well-being. In fact, of the $585 billion that private payers expended for medical services in 1997, about 60 percent ($348 billion) was spent by employers and employees to purchase health insurance.

    Source: Igelhard, New England Journal of Medicine, 1999.

    Poor health habits take an enormous toll on American business.
    Consider the following statistics:
  • It costs on average $1300 for an employee who smokes per year.

  • Workplace alcohol, tobacco, and other drug use costs US companies over $100 billion each year.

  • Up to 40% of industrial fatalities can be linked to alcohol consumption and alcoholism.

  • Job stress is estimated to cost American industry $200-300 billion annually.

  • National Safety Council estimates that 1 million employees are absent on an average workday because of stress related problems.

  • Work injuries cost $121 billion in medical care, lost productivity and wages.

  • At least 100 million workdays are lost each year to lower back pain at a cost to employers of about $20 billion.

  • Every 5 seconds a worker is injured.

  • Every 10 seconds a worker is temporarily or permanently disabled.


    • Source: CDC.

    Unnecessary medical care costs consume corporate profits and employee paychecks. In many instances, medical care costs can consume half—or even more—of corporate profits.

    Source: Rosen, The Healthy Company.

    Unless employers take aggressive measures, the end appears to be nowhere in sight. In a recent article, The Wall Street Journal cited a survey of Fortune 500 benefits managers, who anticipate premium increases averaging 10.3 percent for 1999, as compared with 5.9 percent for 1998. Small businesses’ costs are expected to rise even faster.

    Source: Kuttner, New England Journal of Medicine, 1999.



    Reason #5: Recent empirical research validates that health promotion programs can improve health, save money and even produce a return on investment.

    Here is what the experts have found:

    1) Steven G. Aldana, PhD—In a review of literature on the financial impact of worksite health promotion covering 54 studies, Dr. Aldana notes that, “the reductions reported in medical care costs and absenteeism are significant in most cases.” Of these studies, which span from 1975 to 1997, almost all support the hypothesis that health promotion programs can reduce employee related health care costs and absenteeism. (1)

    2) Mark G. Wilson—In a review of 316 studies which critically examined the effectiveness of worksite health promotion programs. It was found that “although the relationship is stronger in some areas than in others, the evidence generally supports the effectiveness of worksite health promotion programs.” (2,3)

    3) Larry S. Chapman—30 articles examining comprehensive worksite health promotion programs were reviewed in Proof Positive. These publications examined more than 293,000 experimental subjects and comprise more than 120 years of formal study. All but two of the thirty studies reviewed provide evidence of positive cost savings. (4)

    4) Kenneth R. Pelletier—Health and cost outcomes of worksite-based comprehensive health promotion and disease prevention programs indicate: (5)

  • Immunization for measles, mumps and rubella can save approximately $14 for every dollar spent

  • A program to increase the use of bicycle safety helmets can yield an estimated net savings of more than $200 million each year.

  • Screening mammograms for women 50 to 70 years of age every 2 years is highly cost-effective at $4,050 per year of life saved.

  • Programs that target smoking during pregnancy can save more than $6 for every dollar spent.


    • (1) Aldana, S. G. (1998). Financial Impact of Worksite Health Promotion and Methodological Quality of the Evidence.
    The Art of Health Promotion. Volume 2, Number 1.

    (2) Wilson, M.G. (1996). A Comprehensive Review of the Effects of Worksite Health Promotion on Health-related Outcomes.
    The American Journal of Health Promotion. Volume 10, Number 6.

    (3) Wilson, M.G. (1996). A comprehensive Review of the Effects of Worksite Health Promotion on Health-related Outcomes: An Update.
    The American Journal of Health Promotion. Volume 11, Number 2.

    (4) Chapman, L.S. Proof Positive: An Analysis of the Cost-effectiveness of Worksite Wellness. 3rd ed. Seattle: Summex Corporation, 1996.

    (5) Pelletier, K.R. A Review and Analysis of the Health and Cost-effective Outcome Studies of Comprehensive Health Promotion and disease Prevention Programs at the Worksite: 1993-1995 Update. The American Journal of Health Promotion. Volume 10, Number 5.



    REASON #6: More and more companies are building world-class wellness programs.

    Union Pacific Railroad:
    Wellness on the Fast Track.
    Union Pacific Railroad (UPRR) has 57,000 employees in 23 states throughout the US. Most employees are mobile, unionized, blue-collar workers. In 1990, UPRR determined that 29% of their health care costs were lifestyle related, compared to a national average of 19%, and the medical costs per employee were nearly double.

    Their program started with a self-care initiative at an annual cost of $50 per person. That program alone achieved a net savings of $1.26 million for a benefit cost ratio of $2.77 for every $1. Employees in the treatment group lowered their risk of high blood pressure (45%) and high cholesterol (34%); others moved out of the at risk range for weight problems (30%); and 21% stopped smoking.

    After five years of targeted health promotion activities, UPRR has reduced the rate of lifestyle related health costs from 29% to 24%. What’s more, they estimate that they have saved three times as much money through indirect productivity savings as they have in direct medical costs. Union Pacific re-certified as a Gold Well Workplace in 1999.

    Lab Safety Supply:
    Commitment to prevention.
    Lab Safety Supply (LSS) is the leading catalog supplier of safety and industrial supplies. They employ 750 people in Janesville, Wisconsin. More than 75% of their population is female and the average age is 36. LSS earned WELCOA’s Gold Well Workplace in 1996, and was re-certified in 1999.

    They offer fitness programs, health fairs, medical screenings, counseling, safety training, self-education programs, insurance liaison services and more. Since 1995 they have seen a 97% decline in lost workdays, which is due in part to immediate case management and follow up, onsite rehabilitation, and back to work through a light duty program.

    What's more, realizing that they had 20% of their employees still smoking in designated areas, LSS decided in 1998 the company would go completely smoke-free. In addition to implementing a no smoking policy, LSS went above and beyond in helping smokers by offering a variety of free smoking cessation programs. The results were amazing. Corporate smoking cessation programs are considered very successful if they achieve 30-35% quit rates. At LSS, 80% of the 82 people in the nicotine patch program quit. Eighty-five percent of the 78 people in the hypnosis program quit, and after six months, 68% were still not smoking. At Lab Safety Supply the commitment to their employees is apparent at every turn.


    Offutt Air Force Base:
    Wellness for a large population.
    Offutt Air Force Base in Nebraska is home to the Fightin’ Fifty-Fifth, the largest wing in the Air Combat Command. The Department of Defense allocated funds to develop health promotion programs for the Air Force in 1994. That same year, Offutt established their Health and Wellness Center. They serve approximately 7,800 active duty personnel and their families, retirees, and civilian employees—almost 58,000 people in all. They have four remote sites, and were awarded the Gold Well Workplace Award in 1998.

    The former airplane hanger at Offutt now contains a soccer field, Olympic size pool, basketball, volleyball, racquetball and tennis courts, cardiovascular and strength training machines, and a running track. Next to the gym is the health and wellness center, which has a full kitchen for cooking demonstrations, nutrition classes, classrooms, offices, a library of videos and books, a physical therapy satellite clinic, and their fitness testing room.

    Although two-thirds of the Health and Wellness Center’s clients are active duty, all of their programs are open to the entire Offutt community. In addition, due to the fact that many personnel are deployed each month, they implement programs that are frequent and flexible.


    Miami Valley Hospital:
    Focusing on risk factors.
    Miami Valley Hospital employs about 5,000 people in Dayton, Ohio. Eight percent of the employees are female, with an average age of 39. they received the Gold Well Workplace Award in 1998.

    Miami Valley Hospital is serious about getting measurable results in their program. In fact, with the implementation of their wellness initiative, they have significantly reduced the number of lifestyle related risk factors their employees carry. They are able to achieve such results by offering monthly awareness programs based on employee risk factors and ‘round the clock, portable, flexible programming that allows them to reach workers on all shifts.

    They have a fitness center that is open 24 hours where employees can work out or take classes ranging from personal finance to gardening on the lunch hour and in the evenings. Finally, they offer an HRA that focuses on readiness to change and provides follow up based on the risks identified. Since the inception of their HRA program, Miami Valley employees improved in 11 out of 14 health categories in two years.


    MassMutual Life Insurance:
    Frequent interventions yield cultural change.
    Massachusetts Mutual Life Insurance Company (MassMutual) is a Fortune 500 company operating primarily at two sites. About 3,800 people work in Springfield, Mass. and another 1,200 employees are located in Hartford, Conn. The company was awarded the Gold Well Workplace Award in 1995 and again in 1999, and has repeatedly made Working Mother magazine’s list of the 100 most family-friendly places to work.

    The focus at MassMutual is on culture change where they program for a younger, more diverse workforce. Prenatal care, parenting classes, and work/family balance are just some of the program priorities they offer. Their wellness program believes that short, frequent interventions several times a week for months result in meaningful changes.

    Since nearly everyone at MassMutual operates from a computer, future plans for their program include going on-line—utilizing their company Intranet. They are developing their wellness web site so that the user is able to choose from dozens of health and wellness topics, which will make their programs year round instead of occasional.


    DaimlerChrysler:
    Commitment to setting the standard.
    From 1986 to 1998 DaimlerChrysler Corporation worked to implement a comprehensive on site health promotion program at all 34 of their sites in North America that employ 500 or more workers.

    DaimlerChrysler Corporation’s wellness program is confidential and voluntary. Outside vendors, the StayWell Company and the American Institute for Preventative Medicine, provide the staff and programming elements. DaimlerChrysler Corporation, along with the United Autoworkers Union (UAW) provides the guidelines, corporate atmosphere and oversight that ensure the program’s success. Employees are given a health risk appraisal and offered risk reduction programs based on their health needs. In addition, employees earn incentive points for participating in the wellness program.

    DaimlerChrysler Corporation made a very large commitment to health promotion at a time when the research to support such a comprehensive program didn’t exist. Their determination has continued with the growth of their program. To date, 30 of DaimlerChrysler’s sites have received the Gold Well Workplace Award—23 in 1998 and 7 in 1999.


    Lincoln Plating Company:
    A team approach yields bottom line results.
    Lincoln Plating Company is an electro finishing plant in Lincoln, Nebraska that employs 210 people. They won the Silver Well Workplace Award in 1991 and were awarded the Gold Well Workplace Award in 1997.

    They estimate that they made an $800,000 return on an $85,000 investment in employee wellness in just over five years! Most of the savings have come from lower heath insurance premiums. The rest of the savings result from a 50% reduction in injuries, and reducing workmen’s compensation costs. They attribute the decrease in injuries to making stretching before work part of the daily routine. These figures don’t include dollars saved in reduced annual turnover (down 70% in 1996 to 35% in 1998), lower absenteeism rates or increased productivity—which reached a new high in 1998


    Jacksonville Electric Authority:
    A grass roots wellness program.
    JEA is a public utility that operates electric, water and sewer systems that serve more than 335,000 customers in and around Jacksonville, Florida. JEA won the Bronze Well Workplace Award in 1995, and was awarded the Gold in 1999.

    JEA’s wellness program started in 1989 with a small group of employees who wanted a place to work out. After getting approval from management for space, they went to their credit union and signed a loan to purchase used exercise equipment. After signing up members, they were able to pay off the loan in just a couple of years and the program continued to grow. Today, their gym has 227 employee members, $100,000 worth of top of line equipment, and aerobics classes. Employees pay a $35 initiation fee and only $5 per pay period to use the facility and participate in other wellness programs.


    Townsend Engineering:
    A vision with history.
    Townsend Engineering, manufacturers of meat processing equipment, was re-certified as a Gold Well Workplace in 1999. Townsend has grown from their initial four employees to 157 today, and employs another 50 at a plant in Holland.

    The founder of Townsend Engineering, Ray Townsend, built a 30,000 square foot wellness facility in 1978. In addition, he always believed that labor and management were not adversaries. Their corporate pledge states that “when the company prospers so to will their employees.” Based on their product sales, bonuses are split and distributed evenly every six months. In addition, Townsend Engineering pays for their employees and families to go on company trips to places like Hawaii and the Bahamas.


    Highsmith, Inc.:
    Total employee development.
    In 1989, Highsmith, Inc. became one of the pioneers in developing risk-rating to assess and reward good health among its workers. From the beginning, the risk-rating program was completely voluntary and embedded in a larger, comprehensive approach to wellness. Employees who chose not to participate continued to receive the company’s standard health insurance premium contribution of 60%. Those who were willing to sign on received a higher contribution—up to 80% for low risk employees.

    While these efforts were effective in the fiscal management of corporate health, research indicated that the program should address more specifically the population needs of Highsmith employees. The company also took note of the impact risk-rating appeared to be having on the corporate culture. It frustrated some employees whose good faith efforts to adopt healthy lifestyles produced no improvement in annual screening scores. Further evolution was prompted by passage of the Health Insurance Portability Act, which prohibited the incenting of employees based upon health outcomes. Risk-rating gave way to a new initiative entitled TAG, which stands for:

    Total commitment to developing human potential
    Access to learning opportunities
    Growth as an individual and as a company

    The initiative demonstrates Highsmith’s belief that traditional job and career development are just the beginning of helping an employee reach full potential. Personal and physical well-being, self-care and work/life enrichment are all aspects of individual and organizational growth.






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