Control Health Care Costs

Workplace health programs can impact health care costs

An investment in employee health may lower health care costs and insurance claims. In fact, employees with more risk factors, including being overweight, smoking and having diabetes, cost more to insure and pay more for health care than people with fewer risk factors.1, 2

A workplace health program has the potential to both keep healthy employees in the “low-risk” category by promoting health maintenance, while also targeting those unhealthy employees in the higher-risk categories, therefore lowering overall health insurance costs. A systematic review of 56 published studies of worksite health programs showed that well-implemented workplace health programs can lead to 25% savings each on absenteeism, health care costs, and workers’ compensation and disability management claims costs.3

Individual employees can also save money by improving their health. For example, a smoker who spends $5 per pack of cigarettes per day can save $1825 a year by giving up smoking and many companies provide lower insurance premiums for non-smokers creating additional savings.

Other insurance premiums such as life insurance are also lower when an individual has lower health risks. And by practicing a healthy lifestyle and getting recommended clinical preventive services, an individual employee may reduce the number of trips needed to go see the doctor because of an illness and the co-payments which come with those office visits, such as getting an influenza vaccine to avoid getting influenza.

Example – Employee Health Concern: Heart Disease and Stroke
  • A workplace health program at Duke University has dedicated efforts to assist employees in controlling high blood pressure and cholesterol and has demonstrated a positive return on investment for its blood pressure ($1.21 to $1.00) and cholesterol programs ($3.39 to $1.00)4
  • Johnson & Johnson’s Health and Wellness Program has demonstrated a long term impact on controlling health care costs (medical costs decreased by approximately $225 per participating employee per year during a four year study) through its policy, environmental, and education components for addressing risks that lead to high blood pressure and cholesterol5

1.  Yen L, Schultz A, Schnueringer E, Edington DW. Financial costs due to excess health risks among active employees of a utility company. J Occup Environ Med. 2006;48(9): 896-905.

2.  Goetzel, RZ, Anderson DR, Whitmer RW, Ozminkowski RJ, Dunn RL, and Wasserman J. The relationship between modifiable health risks and health care expenditures: an analysis of the multi-employer HERO health risk and cost database. J Occup Environ Med. 1998;40(10): 843-854.

3.  Chapman LS. Meta-evaluation of worksite health promotion economic return studies: 2005 update. Am J Health Promot. 2005 Jul-Aug;19(6):1-11.

4.  Goetzel RZ, Kahr TY, Aldana SG, Kenny GM. An evaluation of Duke University’s Live for Life Health Promotion Program and its impact on employee health. American Journal of Health Promotion. 1996;10(5):340-342.

5.  Ozminkowski RJ, Ling D, Goetzel RZ, Bruno JA, Rutter RR, Isaac F, Wang S. Long-term impact of Johnson & Johnson’s Health & Wellness Program on health care utilization and expenditures. Journal of Occupational and Environmental Medicine. 2002;44(1):21-29.