Americans today are heavier than ever before, thanks in large part to more sedentary occupations and lifestyles. About two-thirds of adult Americans are overweight or obese.* At the same time, workers' average age has crept up in tandem with their average weight – a development that will likely gain momentum over the next 25 years as more workers delay retirement.**

Together, these two trends help account for a decline in the health status of American workers over the past several years, which represents significantly higher group health care and workers' compensation costs. Although you can't stop your employees from aging, you can adopt an innovative new type of health plan that focuses on prevention of illness as well as of the associated high costs.

Higher Risks, Higher Costs
Out-of-shape workers face higher risks of serious – and costly – health problems. Obesity has been linked to higher incidence of chronic conditions, such as high blood pressure, heart disease, type two diabetes, certain cancers and respiratory ailments, as well as carpal tunnel syndrome, low back pain and other injuries. In addition, when an illness or injury does occur, the length and costs of treatment tend to be much greater for those who are already unhealthy than for their more fit counterparts.

"Health insurance is quickly becoming the largest line item of a company's expense sheets," said Terry Flanagan, employee benefit advisor, Insurance Services. In fact, over the past few years, the medical benefits portion of workers' compensation claims has increased around 10 percent annually, according to the National Council on Compensation Insurance (NCCI). And this trend is poised to gain momentum. The largest chunk of American health care dollars are spent on people with chronic health conditions – a population that is expected to grow by almost 40 percent by 2030.***

Invest in Prevention
"Most Americans take a repair approach to their general health, only fixing things that go wrong," said Flanagan. "But that's a much more costly tactic than preventing problems in the first place." Yet, despite the direct connection between employee fitness and health care costs, companies traditionally have not tried to affect change in workers' lifestyles. In an effort to offset or shift escalating medical expenditures, some employers have implemented cost containment strategies, such as increased premium sharing, reduced benefits and higher deductibles. However, these programs do nothing to address the increased risks of injuries, health problems and the associated costs faced by workers who live unhealthy lifestyles.

The most effective solution to this growing problem may lie in changing the role of the employer – from that of health care provider to that of engager. "Recognizing that prevention of injury or disease is more cost effective than treatment, most American industries have implemented workplace safety programs to minimize accidents and control workers' compensation injuries," said Jim Mann, vice president, Insurance Services. "Applying the same logic, an investment in employees' overall health can save money in the long run," Mann continued.

By implementing group health and productivity management initiatives (otherwise known as wellness programs), companies can create a culture of wellness, making employees more aware of their health status and the associated risks. These programs encourage more healthy choices, which can go a long way toward keeping workers out of the very high health risk category. That change, in turn, can help reduce the incidence, as well as the cost and duration, of disease and injury treatment. Employers may benefit from wellness programs in another way as well, as healthy employees spend less time at home or in hospitals, and more time at work.

Information Provides Motive and Means
An effective wellness program starts with a strong commitment from management and requires the buy-in of a large number of employees. "The greatest benefit from a wellness program generally comes from the borderline workers – those who are not yet very unhealthy, but whose lifestyles put them well on their way," said Mann. That's why he recommends designing a plan to encourage a large majority (at least 80 percent) of the workforce to participate.

Most good wellness programs will include an initial health risk assessment, to increase employee awareness of their current health status, as well as education about the link between lifestyle and health. Along with resources like smoking cessation programs and weight management clinics, information can give workers the motivation and the means to make significant positive changes in their lives. For example, specific data about hospital success rates allows employees to seek treatment at the best institution for their particular condition, not just the closest. The main goal of a good wellness program is to give employees access to all the information they need to make sound decisions about their lifestyle choices and their health care purchases.

*Source: Swann, Lynn (2004, June 3). The Obesity Crisis in America. U.S.Department of Health and Human Services. Retrieved from www.fda.gov/ola/2004/obesity2_0603.html

**Source: 65+ in the United States: 2005, U.S. Census Bureau, December 2005.

***Source: Managing Care for Adults with Chronic Conditions. Agency for Healthcare Research and Quality. Retrieved Feb. 12, 2007, from www.ahrq.gov/news/ulp/chronic/ulpchron1.htm

This article originally appeared in the 2007, 2nd quarter edition of the Mesirow Financial Quarterly. Click here to access the current and all past issues of the Quarterly.