Next-generation solutions for reducing healthcare costs resulting from obesity

December 1, 2004

Next-generation solutions for reducing healthcare costs resulting from obesity

By Aaron Day

As businesses bear the burden of America’s fast-food culture by paying increased healthcare costs, a number of them have responded by cutting back on or completely dropping employee benefits. It is becoming more common for businesses and HMOs to reestablish utilization reviews and implement higher co-pays and deductibles, while severely limiting employees’ healthcare options by pushing them toward cheaper providers. The Employment Policy Foundation, a Washington, DC-based research firm, found that the level of employer-sponsored health coverage dropped from 53% in 1999 to 45% in 2003; an alarming statistic for such a short period of time.  

Generally, companies want to promote a healthy work environment, while improving their bottom line. Forward-thinking companies like General Electric, DuPont and IBM, found a way to do both by utilizing first generation weight-loss programs-usually discounted gym memberships-to motivate their workforce to live healthier lifestyles and to lower the companies’ overall healthcare costs. A study conducted by NBGH found that 56% of companies reported an increase in morale resulting from wellness initiatives. Of those companies, 27% said the programs resulted in significant savings in healthcare costs.

According to the Wellness Councils of America (WCA), a non-profit organization dedicated to promoting healthier lifestyles for Americans, large corporations have reported significant healthcare savings after installing corporate gyms and providing their employees and spouses with inexpensive entry and training fees. Dietary assistance, including Weight Watchers and similar programs, and diet-specific meals in company cafeterias are also popular corporate weight management strategies. Although these steps seem to have positive short-term impacts on healthcare costs and employee wellness, there are still statistics showing that the workforce is continuing to gain weight. Companies that participate in employee wellness programs often find that the biggest challenge is keeping employees interested and focused enough to consistently participate in the initiatives, which leads to regular savings and improved ROI for the companies’ wellness investments. 

As an alternative to reducing or eliminating healthcare, employers might review new corporate wellness programs. These programs are designed to motivate employees by giving them simple and easy-to-use tools to reach their goals, and then rewarding them for achieving and maintaining those goals. For businesses, the benefits are reduced healthcare costs, increased productivity and more satisfied, motivated employees.

In addition, companies are also finding that wellness programs are more successful when an element of community is incorporated, providing a shared sense of competition and success. Based on the theory that competition can improve individual performance, encouraging community with “team-based” components can popularize the program with employees who would otherwise not participate.

Other features of the best new wellness programs include:

· Ease of use: Simple tracking and measuring combined with home and office access via the Web will keep the program at employees’ fingertips and will help keep them involved.

· Community: Even the most successful dieters don’t do it alone. Programs with an opportunity to build community help employees become more successful.

· Rewards/Incentives: The key to long-term success is rewarding employees for achieving and maintaining improved health. Monetary incentives are best, but alternatives like vacation days or bonuses can also be used.

· Privacy: Health Insurance Portability and Accountability Act (HIPAA) compliance ensures employees the utmost privacy, an aspect important to many when it comes to personal health and weight loss.

It is important that healthcare executives look into these next-generation programs, whether it is to work in conjunction with existing weight-loss incentives like corporate gyms and diet counseling, or as a stand-alone method. A popular, effective solution is to partner with one of the new companies supplying corporate wellness programs to decrease healthcare costs.

Aaron Day is the founder and CEO of Realize (www.realize-health.com), a unique corporate weight-loss and management solution for businesses that provide health insurance for their employees. Day can be reached at ard@realize-health.com or

+1-617-248-8990.