How Companies Are Controlling Health Care Costs

Healthy Initiatives: How Companies Are Controlling Health Care Costs

A healthy workforce is good for the bottom line—that’s the common-sense finding of the 2005/2006 Staying@Work Survey. American business, pummeled by years of double digit health care cost increases, is paying attention.

The survey of 275 employer organizations found that more than 41 percent already incorporated health and productivity initiatives into their overall health care planning. Another 32 percent in-tended to do so within the next year.

Employers recognize that a healthy and productive workforce directly impacts the bottom line, and with many different factors affecting their employees’ health and productivity, employers are taking action.

Fully 75 percent of the companies surveyed offered a health promotion program this year, up from 56 percent in 2003. Another 72 percent used health risk appraisals, while 40 percent provided personal health coaches. Remarkably, 81 per-cent provided a return-to-work program in 2006, up from 56 percent in 2003.

More Is Better

As might be expected, employers that implemented a greater number of health and productivity practices were more successful at reaching their goals—from reducing lost time to improving employee health, reported the survey. Self-care guides, preventive care reminders, online health/prevention information and work/life programs were the best practices associated with lower incidental absence rates.

For example, 57 percent of companies that had 20 or more practices reported better employee understanding of health improvement compared with just 9 percent of companies that had fewer than 10 practices. Similar-ly, twice as many employers with 20 or more practices said their strategy was effective at increasing employee satisfaction with their benefits compared with employ-ers that had fewer than 10 practices.

The study also found that employers that integrated three or more programs such as workers’ compensation, disability, sick leave and family medical leave were more effective at achieving desired outcomes, such as reduced lost time, improved workforce health and lower costs for workers’ compensation, sick leave and short-term disability (STD).

Workers Accountable for Health

Study results show a large gap in employer efforts to hold workers accountable for their health and productivity. While three out of four employers (74 percent) believed that their employees should be held accountable to a great extent for their health, only 4 percent thought their employees are held accountable.

Overall, employers are not doing very much to encourage employee accountability, the organizations that work most closely with employees to en-courage healthy behaviors will ultimately be most successful at closing this gap.

To effectively manage employee health and productivity, employers will need to overcome barriers such as a lack of metrics (46 percent) and inadequate access to data (43 percent). Organizations that measured the re-turn on investment of their programs reported lower sick leave costs than those that did not (1.7 percent of payroll versus 2.6 percent, respectively).

Without data and metrics, organizations cannot gauge the effectiveness of their health and productivity strategies and practices, measuring the re-turn on investment will help keep these practices in place and enable employers to achieve the results they want.

Extensis provides cost effective access to the Health Benefits. We work with our clients to craft the RIGHT health benefits package for their business and work with them to manage their total cost, year over year. Healthcare planning is more than a rate chart, it requires experience and the flexibility that Extensis can provide your business.

For more information, go to www.extensisgroup.com, or call 888-473-6398.