Business of Well-being

Bending the Cost of Healthcare - Get Paid to Lose Weight

As the lively debate over healthcare reform continues, there has been frequent mention of bending the healthcare cost curve in the United States. By focusing on obesity, which makes up ten percent of national healthcare costs, not to mention the insurmountable costs due to lost productivity and absenteeism caused by obesity related ailments and diseases, employers can find a way to reduce their costs. By using an incentive-based weight management program that pays employees to lose weight and keep it off for the long term, many companies are now seeing a significant return on investment.

The current healthcare reform debate includes the idea that wellness will play a vital role in reducing the cost of healthcare. That's a good thing. For Birmingham, Alabama-based O'Neal Steel, the nation's largest family owned steel service center, waiting for change is not an option. No matter what happens with healthcare, O'Neal Steel is already realizing the cost and productivity benefits of wellness. While the economy continues to challenge American businesses, O'Neal Steel, recognizes the importance of keeping their employees healthy and the cost benefit of providing a voluntary incentive-based weight management program.

They save on average, 10 percent of healthcare costs year after year. When the program started at O'Neal Steel in January of 2009, 85 percent of participants were classified, based on their Body Mass Index (BMI), as overweight or obese. By July 2009, that number dropped to 78 percent. More significant was the drop in obese participants, from 54 percent to 41 percent. In just three months, two tons of weight are gone and O'Neal Steel is not looking back.

Craft O'Neal, Chairman of O'Neal Steel feels strongly about the firm's commitment to keeping employees healthy. For O'Neal Steel, obesity is a big cost issue and unfortunately, like many companies, it is difficult for them to contain healthcare costs with an unhealthy population. Now they can save money and shift those dollars to other valued employee benefits. The Wellness program is working for 44-year old, Steve Baumgartner, Inside Account Manager at TW Metals, a subsidiary of O'Neal Steel that handles metals distribution.  

Baumgartner, who stands 6 feet tall and weighed 260 pounds in January 2009, has recently lost 16 pounds. Because the wellness program is a non-prescriptive program, Baumgartner decided to eat healthier, rather than choose among a number of commercially available diet plans also available on the wellness program. He has a weight goal of 215 pounds. Baumgartner has high blood pressure, a condition exacerbated by obesity, which he needs medication to control it.

He also had high cholesterol before starting the wellness program program. Since he's lost the weight and started eating healthier foods, his doctor told him he could cut back on the blood pressure medication and that his cholesterol levels had improved. Plus with less weight, he reports that his knees don't ache as much and is more productive. O'Neal Steel's voluntary wellness program offers incentives to employees who improve their health by achieving and maintaining a healthy weight.

The recurring quarterly program encourages weight management through individual rewards and teamwork. The wellness program lowers the cost of healthcare without forcing employees to participate in its program and increases the profitability of employers and employees by paying them cash or rewards to lose and maintain their weight. The long-term program is a simple, innovative solution to employers' healthcare costs woes because it tackles the most controllable and expensive health condition - obesity.

While not all health costs are controllable, by cutting costs related to the things we can control, like obesity, companies will have the ability to keep providing health coverage for their employees and put the individual participants on the path to better health. O'Neal Steel is not new to wellness.  In addition to health club subsidies, health coaching, on site flu shots, smoking cessation incentives and other individual health and wellness workshops and communication, O'Neal Steel has administered their own weight loss competition and had amazing success.

But the administrative difficulty of running the weight loss program means they can only offer it for three months a year. Using a long-term program gives O'Neal Steel the ability to have an ongoing program that eliminated the yo-yo effect of short-term weight loss competitions. Nearly 700 employees participated in the Wellness program at 29 of O'Neal's 78 locations throughout the U.S.

Employees are now gearing up for their next quarter as the program rolls out to more locations.The customized, fully outsourced wellness program includes a suite of online and offline services. By offering cumulative rewards, and allowing participants to track their results online.

About the Author

Aaron Day is Chairman and CEO of Tangerine Wellness. Founded in 2004, Tangerine Wellness is the leading corporate weight-management program that directly rewards employees for losing weight and for maintaining a healthy weight. Tangerine's interactive weight-loss program has a direct and positive effect on employee healthcare costs, morale and productivity. Tangerine has successfully implemented programs in the manufacturing, financial services, healthcare and government/university entities that are translating into direct healthcare cost-savings.

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