Making the business case for a healthy workforce

By Mike McCallister
January 26, 2012

The role that today’s workplace plays in health and well-being is often debated. People spend much of their time at work, and wellness at work matters. Employers generally find that healthy employees contribute to business success, but the exact quantitative relationship between improvements in employee health and corresponding improvements in employee productivity and engagement remains elusive.

At the same time, employees around the globe are increasingly subject to non-communicable diseases – primarily cancer, heart and chronic pulmonary diseases, and diabetes. Many such diseases have their root in obesity or tobacco use, and thus to a large extent are preventable. Worldwide, non-communicable diseases cause an estimated $2 trillion in losses each year in economic activity, as well as the premature deaths annually of 18 million people still in their productive years. That’s why the World Health Organizations tags such non-communicable diseases as “the world’s biggest killer.”

For the past two years, the Workplace Wellness Alliance has been tackling the problem. Triggered by a call to action during the 2010 World Economic Forum, this consortium began with 13 companies and now has more than 100 major global employers representing 4.5 million employees worldwide, all dedicated to ensuring that – regardless of country or industry – optimum employee wellness is a priority in the workplace.

As the consortium has grown in size, so has its influence. In fact, the corporate social responsibility newswire CSRwire recently named the rapid growth of the Workplace Wellness Alliance as a “Top 10 CSR Moment of 2011.”

Specifically, the Alliance is helping establish a global standard of wellness – through metrics and best practices contributed by its member companies – to improve workforce health and productivity. Already, it has collected homogeneous health metrics from more than 150,000 employees across 20 global companies. These will help establish a measurable global workplace health baseline and provide the structure, tools and processes essential to maximize efforts against chronic diseases. It also has established a database of real-life case studies that describe successful workplace wellness programs.

It’s a critical effort. In the U.S., chronic illnesses affect more than one in three workers, with treatment costs accounting for about 75 percent of our national healthcare spending annually.

The consequences are equally dire elsewhere. In the Russian Federation, every employee on average loses 10 working days a year to chronic disease and injury. In the United Kingdom, the cost of mental ill-health to employers was estimated at 25.9 billion British pounds in 2006.  The societal implications are far-reaching as well. In Taiwan, if you’re diagnosed with diabetes or cardiovascular disease, your chances of being hired are reduced by 19 percent and 27 percent, respectively.

Making progress against the problem, as the Workplace Wellness Alliance is doing, can make a real difference. A recent Harvard-led analysis of 36 workplace wellness programs found that for every U.S. dollar spent on such initiatives, the average return on investment is $3.27.

The Alliance is pursuing several initiatives to help employers. On the technology front, it offers an app that provides a quick way for companies to estimate potential savings from employee wellness programs. The tool estimates their company’s current healthcare costs and costs of productivity losses from prevalent health conditions. Then it calculates savings by asking users to select behaviors to target in a simulated wellness program.

Another tech offering is a behavior change tool from Stanford University that helps employers design solutions to achieve the desired health changes. And the real-life case studies the Alliance provides online at its website, www.alliance.weforum.org, describe workplace wellness programs that can prove useful in other organizations.

In the Philippines, Nestlé set up a holistic set of behaviors, including physical activity and nutrition, as part of its “I choose wellness” program. Within two years, nearly 1,200 program members had lost more than 2 tons of body weight in total.

At Humana, in partnership with Discovery Holdings Ltd., we recently launched HumanaVitality – a wellness and loyalty environment that features a wide range of well-being tools and rewards that are customized to the individual member’s needs and desires. And in September, in partnership with the World Economic Forum and World Health Organization, Humana helped organize the world’s first “Wellness Week” to inspire people to take a more active role in their health. Situated at Columbus Circle near Central Park in the heart of New York City, the Humana Wellness Week tent featured a bike-sharing program, individual health screenings, and a “smart bike” prototype that takes biometric measurements and offers health recommendations to riders in real time.

Over time, the Workplace Wellness Alliance is dedicated to creating a ”business case” for employee well-being that is just as compelling, and measurable, as the business case for an acquisition or a new-product launch. Faced with the health challenges of the 21st century, the achievement of this milestone will benefit not just employees and their businesses but the whole of global society.

PHOTO: A doctor checks the blood pressure of a patient at the J.W.C.H. safety-net clinic in the center of skid row in downtown Los Angeles, July 30, 2007. REUTERS/Lucy Nicholson

One comment

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There is no “business case for a healthy workforce”.

It’s an oxymoron.

The only rational “business case for a healthy workforce” is to quietly get rid of an employee when he/she (or their family) becomes a healthcare burden to the employer, since it directly affects the bottom line.

This also includes the ongoing need for “preemptive action” on the part of an employer to keep its employee base as young as possible, since an older workforce tends to cost more, but without generating any additional efficiency that drops profits to the bottom line for investors.

US jobs are “outsourced”, not only because of direct labor cost, but also to avoid having to pay the “overhead” associated with a US work force, which includes, among other things, health care costs that are rising rapidly each year.

No matter how you look at it — from a financial investment standpoint — maintaining a business in the US versus overseas is a lose-lose proposition.

And, taking the US economy as a whole, the fewer individuals insurance companies have to spread the risk over, the higher the healthcare costs to the employer.

Then the cycle begins again, ad infinitum.

It’s the dirty little secret about healthcare no one wants to talk about, but it exists nevertheless.

What we REALLY need to do is to take the employer out of the equation altogether, thus reducing business overhead costs, which are a direct conflict of interest for any employer, and then we can REALLY focus on a “healthy workforce”, plus a whole lot of other social problems that contribute to an unhealthy US workforce.

The underlying problem is that neither government nor business can seem to understand that maintaining this employer-based health care system is destroying this country, no matter how you choose to look at it.

What we REALLY need is a healthcare system like many European countries, which would probably give us better coverage for less cost.

The underlying problem is that moving to a healthcare system that really works, would gore too many “sacred cows” in the healthcare industry.

What we REALLY need is way to force healthcare changes on an industry that is unwilling to reform itself.

The underlying problem is the healthcare industry has too much clout with the federal government to ever allow that to happen.

Which brings us back to square one again — a massively overburdened healthcare system, that delivers poor results, and costs a fortune to boot.

Privatizing this system is guaranteed to make matters even worse than they are now — just like privatizing other industries has done. It is NOT the solution.

Why doesn’t someone tell the truth for a change as to what is really wrong with our healthcare system?

Recognizing the problem would at least be a start to correcting it, which would be a lot further than we are today, since we are clearly moving in the opposite direction from any solution that will work.

PseudoTurtle
CPA/MBA

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