Building Wellness Programs with Impact

Rising worker's comp medical costs create a strong case for them.

• By Sonya C. Conner
• Apr 01, 2013

Historically, many employers have implemented wellness programs necessitated by the pains associated with rising company medical insurance premiums. These increasing premiums are due, in part, to the significant increase in risk factors of America's workforce, such as obesity, smoking, heart disease, diabetes, and aging workers.

Today, employers are also considering the impact of these risk factors on the medical costs of their worker’s compensation claims. Medical costs have steadily increased during the past 20 years, accounting for nearly 58 percent of the total cost of worker’s compensation claims in 2009.¹ According to the Insurance Information Institute, if this increasing trend holds, medical costs will account for up to 67 percent of total costs of worker's compensation claims by 2019.

Worke'’s compensation premiums are one of the largest operational expenses for many employers. While any risk factor may potentially affect the cost of a worker’s compensation claim, obesity and related diseases top the chart. A National Council of Compensation Insurance (NCCI) study concludes that medical costs for the same injury are three times higher among obese claimants in the first year, increasing to five times higher at 60 months. In addition, claims for the non-obese are much more likely to be "medical only" (obese workers, when injured, tend to lose time and collect indemnity). For the same injury and all else being equal, the range of medical treatment, the costs, and the duration of the claim are consistently greater for obese employees.²

Implementing a workplace wellness program can help employers control worker's compensation claim costs by generating a reduction in return-to-work days, a reduction in frequency and severity of claims, and an increase in staff productivity. Wellness programs provide mechanisms that aid employees in adopting healthier lifestyles and help educate them on reducing or eliminating their risk factors. Creating awareness of health benefits, as well as introducing an interdisciplinary wellness program into a company’s workplace, has multiple benefits, such as:

• Helping to control costs. An investment in employees' health may lower health care and medical costs associated with worke'’s compensation claims. A wellness program also encourages employees with health risk factors to make lifestyle changes to improve their quality of life and lower costs. The payoff in dollars, as well as in quality of life, can have a big impact on your company's bottom line.
• Healthier employees are more productive. This has been demonstrated in factory settings and in office environments in which workers with workplace wellness initiatives miss less work. Presenteeism, in which employees are physically present on the job but are not at their most productive or effective, is reduced in workplaces that have wellness programs.
• Healthier employees miss less work. Companies that support wellness and healthy decisions have a greater percentage of employees at work every day. Because health frequently carries over into better family choices, employees may miss less work caring for ill family members. The cost savings of providing a wellness program can be measured against reduced overtime to cover absent employees and other aspects of absenteeism.
• Improved morale and enhanced image for the organization. A company that cares about its employees' health is often seen as a better place to work. Those companies save money by retaining workers who appreciate the benefit of a wellness program and also by attracting new employees in a competitive market.

Seven Benchmarks for Solid Wellness Programs
Employers who understand the impact of and implement wellness programs can positively affect their bottom line by reducing both their medical insurance premiums and their worker's compensation costs. Achieving these results will require a team approach with the human resources, employee safety, and worker's compensation departments working in concert.

The relationship between living a healthy lifestyle and decreased work-related injuries is marked now more than ever. The challenge of managing rising cost takes a risk management strategy that embodies a holistic approach. Incorporating a wellness program that focuses on a prevention strategy will help to control risk factors that cause present and future losses related to injuries and or illnesses.

Wellness programming needs to take an innovated risk management approach similar to that of safety programs: Identify the root cause of claims and attack those instead of waiting for claims to occur.

Employee safety and worker’s compensation directors should become familiar with the resources available to their employees from the medical benefits side. These benefits often include wellness initiatives such as assistance with tobacco cessation, weight loss, nutritional counseling, reduced pricing on gym memberships, and stress management. These programs are typically underutilized, yet may give the employer a cost effective way to proactively promote wellness. Employees spend many of their waking hours at work, nearing 50 hours per week on average. This makes the workplace is an ideal setting to address health and wellness issues.

Employers who are considering implementing wellness programs are often overwhelmed with the idea and are unsure where to start. The Wellness Councils of America (WELCOA), an organization dedicated to the promotion of work site wellness, has identified the following seven benchmarks for developing results-oriented workplace wellness programs.³

1. Capture CEO support. A commitment from the top is critical to the success of any wellness initiative.
2. Create cohesive wellness teams. Wellness teams should include a cross-section of potential program participants.
3. Collect data to drive health efforts. Gather baseline data to help assess employees’ health interests and risks.
4. Carefully craft an operating plan. The plan should include a mission statement for the program along with specific, measurable, short-and long-term goals and objectives.
5. Choose appropriate interventions. Interventions should address prevailing risk factors in your employee population and be in line with what both management and employees want from the wellness program.
6. Create a supportive environment. Create a culture that supports work site health promotion that may have features such as healthy food choices in their vending machines, a no-smoking policy, and flexible work schedules that allow workers to exercise.
7. Carefully evaluate outcomes. Evaluation allows the company to celebrate goals that have been achieved and to discontinue or change ineffective initiatives.

Toward a Fit and Healthy Bottom Line
As employers face rising premiums in health care and worker's compensation insurance, many are turning to wellness programs in order to reduce costs. Implementing a holistic wellness program enables employers to reap the benefits of workplace health promotion, including healthier employees, reduced absenteeism, increased productivity, a boost in morale, as well as reduced costs.

All of these benefits will contribute to keeping the company’s bottom line fit and healthy.

References
1. National Council on Compensation Insurance (NCCI), www.ncci.com
2. NCCI Holdings Inc. Research Brief, How Obesity Increases the Risk of Disabling Workplace Injuries, December 2010
3. Wellness Councils of America (WELCOA), www.welcoa.org

This article originally appeared in the April 2013 issue of Occupational Health & Safety.