Financial Wellness

Employee Fitness: A Healthier Workforce Meets a Healthier Bottom Line

Employee Fitness: A Healthier Workforce Meets a Healthier Bottom Line

Look around on a daily basis, and you see the expanding waistlines and the declining health of Americans. The United States Department of Health and Human Services shows that nearly two-thirds of American adults are overweight, and nearly one-third of American adults are obese. With technology innovations and the trend of Americans to adopt a more sedentary lifestyle, more and more working Americans are using healthcare benefits at unprecedented levels.

For employers, especially those who are self-insured, keeping up with consistently rising medical costs has become a business-critical issue. By implementing innovative programs that promote employee accountability for healthcare utilization, employers can meet these challenges and have a powerful impact on the health of their employees and overall corporate performance.

Employers are increasingly finding that physical activity is a key cornerstone of effective programs to maintain health, reduce adverse outcomes and control debilitating chronic conditions. In an effort to enhance the health of their employees and contain healthcare costs, many employers have embarked on efforts to engage employees in fitness and wellness programs.

Promoting healthier lifestyles means employers can reduce absenteeism and presenteeism (the practice of coming to work despite illness or injury), lowering employee healthcare and associated costs; all while improving employee health, morale and productivity. According to the Benefits USA 2011/2012 Comdata Survey, the good news is that 48.2 percent of American employees who are offered a fitness program actively participate.

Reducing Healthcare Costs Integral to Business Success

In today's corporate environment, especially with a sensitive economy, cost control and containment are becoming a focus of everyday business operations. Reducing healthcare costs has become the primary focus for corporate executives, human resources leaders and benefit administrators.

With traditional approaches to reducing healthcare costs providing only temporary relief, many employers have discovered the benefits of addressing the primary drivers of healthcare costs - fitness, prevention and health risk management. A healthy workforce is not just the basis for good business, but it is critical to an employer's bottom line and the quality of products and services they offer.

As wellness programs for the workplace become more and more widespread, employers are finding that investing in their most important asset - the employees - is slowly yielding the healthcare cost savings they have been searching for. A University of Michigan study revealed health costs for a high-risk employee is three times that of a low-risk employee.

The American Institute of Preventive Medicine reports 87.5 percent of health claim costs are due to lifestyle. Companies implementing wellness activities save from $3.48 to $5.42 for every dollar spent, and reduce absences 30 percent.

With corporations constantly evolving to meet the demands of today's more mobile workforce, employers are faced with new challenges to make wellness and fitness programs a success. With employees working remotely and/or with flexible schedules, there are an increasing number of employees absent from the workplace.

Thus, innovation is necessary to meet the fitness program needs of the workforce, and one-size-fits-all wellness programs are not always successful. With a more mobile workforce, employers are finding it important to consider the needs, resources and environment of the individual employees when developing their programs.

A New Model, A New Solution

Comprehensive, structured wellness programs, with a concentration on fitness, is a solution that nearly two-thirds of United States companies are counting on in 2012. While large companies can support on-site fitness facilities and program coordinators, many smaller companies are seeking partners to help structure and coordinate their fitness and wellness programs.

Health insurers and third party administrators have been making valiant attempts in recent years to respond to their corporate customers' need for a managed fitness solution. These solutions, while mildly effective, are often fragmented and lack coordination. This need for increased focus on the anatomy of the program has given rise to a new type of organization, the fitness management company.

Fitness management companies are helping corporations, especially those who are self-insured, to design, implement, coordinate, and manage successful workplace fitness programs. The solutions offered are visible, resonate with employees, and support the employee's work/life balance.

By allowing fitness experts to design these types of turnkey programs, employers can realign their focus on their primary business. The success of an employer's workplace fitness program, and the key differentiator of using a fitness management company, lies in its ability to engage all stakeholders in the effort.

The programs produced by the fitness management industry help create a deep partnership between the employer and the employees, while contributing greatly to the overall health of the workforce and the bottom-line success of the corporation.

By empowering employees to be part of the solution, they feel invested in their employer's efforts and are more apt to buy-in to the program, set personal fitness goals of their own, and be a source of encouragement for colleagues. In the end, this creates a more positive work environment and contributes greatly to the employer's ability to acquire and retain valuable talent.

Participation in a fitness program is rarely mandatory and cannot be considered a condition of employment. To that end, it generally takes some form of incentive to encourage employees to participate. In cooperation with wellness managers, employers set fitness goals for their employees and benchmarks for measuring if goals are met.

These benchmarks are, in turn, monetized to reward employees when they reach those levels of fitness. As employees reach the benchmarks, they are rewarded with rebates towards their investment in the fitness center and/or program.

The employer investment represents a fraction of what it would cost for supporting the treatment of more advanced medical conditions which enhanced fitness and health have now avoided.

Minimal Investment, Maximum Benefit

With two-thirds of America's workforce overweight, the unhealthy behaviors of the American workforce cost employers and average of $670 more each year, according to Thompson Reuters. According to a study published in the January 2012 issue of the Journal of Healthcare Economics, just more than 20 percent of the annual national healthcare expenditure, about $190 billion, is spent on obesity-related medical care.

The impact of too much weight on health quality and life expectancy is now equal to if not greater than smoking. Chronic diseases like hypertension, high blood pressure, diabetes, asthma and depression are responsible for two-thirds of the total increase in healthcare spending, taking an enormous toll on employees and their families.

Fitness program costs can be comparatively minimal in most cases, from $50 to $500 or more per employee annually, plus incentives for health improvement. Fitness programs need to be structured, and employers should be prepared to invest in their success, but the program should not put undue financial strain and coordination concerns on the shoulders of employers.

In the end, the benefits of wellness and fitness management companies are clear. In an effort to stabilize costs, employers cannot continue to address the health of their employees in the traditional ways they have and expect better results. They need to provide employees with programs that are simple to understand, easy to access, and offer some type of reward in the end.

By using outside managers to organize and coordinate fitness programs, an employer can provide a customized program that meets the unique needs of their workforce while focusing on their core business. It's a win-win situation for all involved.

The employee reaches a higher level of fitness and quality health, while the employer can easily implement a fitness program that can stabilize and reduce costs. A healthier workforce is a more effective and productive workforce, providing bottom-line cost savings and enhancing the employer's financial health.

About The Author

Philip Tummarello is the Chief Executive Officer (CEO) of Advanta Health Solutions, a health and fitness provider that develops and manages physical activity programs for the beneficiaries of health plans, employers and other third-party organizations on a national basis. Advanta's programs are designed to increase physical activity levels, improve health outcomes, avoid future medical costs and increase beneficiary satisfaction.

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