By Diamond H Recognition
Summary: The Value of Reward Driven Wellness Programs
The U.S. is on the threshold of a major shift in the way health care costs are managed. With health care costs as a percentage of GDP having already surpassed the 15% mark, the Obama Administration has clearly made health care reform a priority. U.S. companies, which bear a majority of employee health care insurance premiums, have also been taking measures to control expenditures.
While increasing employees’ share of costs has been the most direct approach to containing costs, it has failed to meet the broader objectives of improved health care. Experiments with wellness programs started several decades ago. There are examples of companies which operated such programs as early as the 1980s. Gradually, the popularity of these programs has increased.
Wellness programs started out as purely educational efforts in the 80’s and 90’s, but results were mixed. Researchers learned over the past several decades that the very people who made it a priority to attend and participate were those on the healthier end of the scale. The groups hardest to target with wellness programs are those in high-risk categories, such as smokers and obese individuals, or those who need to efficiently manage chronic diseases such as asthma, diabetes or high blood pressure.
Changing a lifetime of behavior and creating healthy habits is difficult, but what helps is if there are immediate rewards for doing so. Common sense tells us that people should be motivated by the long-term benefits of living a longer, healthier life, but research indicates that the human brain isn’t necessarily wired that way. The science of applied behavior analysis strongly suggests that humans are motivated more by an immediate consequence than a short-term one. In plain language, if a cookie tastes good today, most people don’t care as much about the potential for an extra pound tomorrow.
What companies have started to realize is that by directly offering immediate rewards – whether for filling out a Health Risk Assessment [HRA] or attending a weight management class – they can reach and influence those in the higher risk category and those with chronic diseases.
As a result, more and more companies are offering reward-driven wellness programs. In fact, many recent studies suggest that about 65-85% of respondents now offer wellness and disease management programs.
The key factor driving this rise in acceptance is the success of these programs in lowering costs while improving workforce morale and productivity. Recent studies also indicate that well-designed wellness programs can provide a return on investment (ROI) as high as 300% while promoting employee health.
The key elements of a successful implementation strategy include commitment from senior management, effective communication, continuous program improvement, an environment that is conducive to good health, and meaningful rewards. Rewards are the most crucial factor in determining employee participation and program success. Companies provide rewards at different stages and in various forms. There are no set rules – the particular incentives are governed by the focus of the program and the form of reward is driven by employee preferences.
Clearly, reward-driven wellness programs are emerging as one of the most flexible and effective approaches to curb exploding health care costs.
Health Care Costs Impact Corporate Profitability
• The U.S. spends nearly 40% more on health care per capita than its GDP per capita would predict
• Health care costs are a major concern for U.S. companies
• The U.S. government acknowledges the significance of health care for present and future wellness
Rising Health Care Costs: A Ticking Time Bomb
The U.S. has one of the most expensive health care systems in the world. For the past 30 years, U.S. health care costs have grown by at least two percentage points more than the nation’s overall GDP growth.
In 2009, U.S. health care spending is expected to grow 6% to reach $2.6 trillion. By 2017, it is expected to reach $4.3 trillion.