In 1970, total health care spending in the United States was about $75 billion, or only about $365 per person, according to a study by the Henry J. Kaiser Family Foundation. In less than 40 years these costs have grown to $2 trillion, or $6,697 per person per year.
As insurance premiums rise - about 10 to 11 percent annually - businesses, both large and small, are looking for ways to control health care costs, said Dr. J. James Rohack, director of Scott & White Center for Healthcare Policy.
Studies that have looked at the benefit of offering incentives to workers who maintain healthy lifestyles indicate such programs result in decreased health care costs, Rohack said.
Also, more employers are inquiring about incentive-type programs, he said.
Locally, the city of Temple and Scott & White have implemented wellness plans, Rohack said.
The city of Temple launched its wellness program in September 2006, according to Denny Hainley, benefits coordinator for the city.
Insurance costs are one factor for starting the program, Ms. Hainley said, but equally important is the overall wellness of the workforce.
“Wellness is several things - emotional, physical, mental and spiritual,” she said.
If employees have balance in those areas several things are going to happen, including decreased costs in health care, which are based on use, Ms. Hainley said.
“We’re going to see a difference in the workforce … they’re going to be happier and more productive, which leads to longevity,” she said.
The goal is to have a healthy workforce … decreasing insurance cost is a bonus, Ms. Hainley said.
Also, most accidents occur at home after employees get off work and are fatigued, she said. If the staff is in better physical shape, those accidents and injuries may not happen.
Studies have shown that wellness programs can reduce health care costs and absenteeism rates as well as improve employee productivity, according to the Scott & White publication The Ecology of Healthcare in Texas and the United States.
A study at Citibank showed that for every $1 spent on a wellness program, the return was between $4.56 and $4.73. Additionally, health care expenditures are less for participants in wellness programs than non-participants.
“It’s all very logical, but there are people who don’t buckle up with their seat belts or take other preventative measures,” he said.
Most wellness programs use a Web-based format that require the participant to log on and do a health-risk appraisal and participate in the program, Rohack said.
The information remains confidential and the insurance vendor would only be told if the employee signed up and completed the program.
“That’s important because you don’t want to get into a situation where sensitive personal information is being shared inappropriately,” he said.
With some companies, the employee will receive a cash amount or a lower insurance premium if the form is completed.
The challenge is trying to monitor what an individual can achieve and determine what type of programs would benefit the company’s population, Rohack said.
Insurance companies will use experience ratings when determining new rates for its clients. If a company has a large number of employees seeking medical care for diabetes complications, those increased numbers will likely result in a higher rate, Rohack said.
“That’s when the negotiations begin … employers will be looking at ways to control insurance costs and the insurance companies may suggest the company offer programs to help its employees control their diabetes,” he said.
With education and specialized programs directed at a couple of disease states, within a year the employer may see a decrease in insurance costs or at least a lesser rate increase, Rohack said.
“It’s all about making sure your health care dollars are being spent for the right care at the right place by the right person,” he said.
Some companies may seek to reduce the number of emergency room visits for non-emergency situations by offering additional resources like a 24-hour advice nurse line.
“Ten years ago the co-payment for visiting an emergency room was about $25 … now it’s $100,” he said. “Part of it is making the person think before going to an emergency room for something like a cold.”
Providing health insurance for an individual costs a company an average of about $7,000 a year. To provide coverage for a family runs about $11,000 per year.
Though the average insurance rate will increase about 10 percent, companies that use a lot of health care resources may see a 25 percent jump in premiums, Rohack said.
“The challenge then is for the employer to control costs and that may be through offering employees wellness incentives,” he said.
