PHC4 FYI - Lowering Costs by Encouraging Healthy Behaviors

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The value of having healthy employees is indisputable. Healthy people use less medical care, disability benefits and worker’s compensation. They have increased productivity and decreased absenteeism. For many health plans, it is estimated that a staggering 60 to 70 percent of costs are due to conditions related to modifiable personal health behaviors, such as physical inactivity, poor diets, smoking and problem drinking. This FYI spotlights the impact of these risk factors and creative ways that health care purchasers are encouraging healthier behaviors.

Physical Inactivity, Poor Diets

National data indicate that the prevalence of obesity in the United States is increasing in children and adults. Furthermore, research has shown that health care utilization and costs increase as body mass increases. For instance, a U.S. Department of Health and Human Services (DHHS) report - "Prevention Makes Common 'Cents’" - indicates that obese individuals not only use more hospital and physician services, but also pay up to 77 percent more each year for prescription drugs. Additionally, a 2004 Journal of Occupational and Environmental Medicine study found that employees who are moderately fit and engage in more physical activity perform better on the job.


Although obesity is gaining ground, tobacco use remained the leading preventable cause of death in the U.S. last year. The CDC reports that more than 440,000 people die each year due to smoking, and that nearly 10 percent of these deaths are from exposure to second-hand smoke. Nationally, the direct and indirect costs of smoking-related illnesses exceed $157 billion annually. Action on Smoking and Health, a national anti-smoking organization, says smoking impacts employers through increased absenteeism, decreased productivity and higher insurance costs. The average smoker is absent 50 percent more often than the average nonsmoker, and can cost employers more for health, fire, accident and disability coverage.

Problem Drinking

Untreated alcohol problems can increase business costs through greater use of worker’s compensation and disability benefits, accidents, increased turnover, diverted supervisory time, co-worker friction, increased liability and theft/fraud. Each year, 17 million adults suffer from a serious drinking problem, but only three million seek treatment, according to Ensuring Solutions to Alcohol Problems, a research project based at the George Washington University Medical Center. The project also found that colleagues of problem drinkers are greatly impacted: 20 percent of workers have suffered injuries, have covered for a co-worker, or needed to work harder due to a co-worker’s drinking. Another result is decreased productivity. For example, a DHHS survey found that problem drinkers call off work 30 percent more, and go to the emergency room 33 percent more than people without drinking problems.

Examples of Creative Solutions

The preceding examples are just the tip of the iceberg. A recent national survey conducted by Hewitt Associates, a human resources consulting firm, reveals that employees could be looking for additional guidance; 93 percent of the 39,000 polled said they were willing to take on greater responsibility for their health, but were not sure how to begin. Employees need information from employers and their unions about how modifiable behaviors impact their health, as well as advice about available support options. While there are countless online resources about modifiable health risks, purchasers should also ask their insurers for help. Many have well-designed initiatives already in place.


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