Workforce Health + Benefits

How Much Is Poor Health Costing Us?

The American Journal of Health Promotion states that they can cost an additional $4,000 annually (including the cost of the plan, productivity and absenteeism).1 Another study indicates that obese women cost an additional $4,879 a year while obese men cost $2,646 more.2 You can find countless other studies that would provide you with different costs and measures, and that’s just for one chronic condition.

No matter where you find your statistics, they all confirm that poor health within a population has a significant cost impact for the whole risk pool.

Because of this, claims and their impact on your bottom line need to be a focus of your wellness plan. While any benefits plan will have a percentage of claims unrelated to lifestyle, a large portion are directly related to the high risks prevalent in your population.

If you aren’t seeing a reduction in health risks (or even worse, if you see an increase in the number of health risks), your claims will clearly reflect it. In turn, that will have an impact on the trend your company sees in premium increases. If your wellness plan can’t demonstrate measurable improvement in those categories, then you need to start questioning whether your plan is structured for the goals you value most.

At Bravo, we’ve seen a number of our clients experience a zero trend increase over the years they have partnered with us, some over a six to seven year period. It’s easy to say your wellness plan impacted claims if you have one or two good years, but the reality is you probably just got lucky and didn’t have any catastrophic claims. But six years of flat trend isn’t luck—it’s the actual impact of a carefully designed and executed wellness plan and benefit design.

Remember that your healthy population is likely to become unhealthy over time. When you factor this into your current risks you get a much more accurate picture of the cost of poor health within your organization. Michael O’Donnell, PhD, MBA, MPH and Director, Health Management Research Center, University of Michigan states, “Our research at the Health Management Research Center has shown that employers save an average of $150 per employee per year in health care costs for each risk eliminated and about $350 per employee per year for every risk added. It pays more to keep employees healthy.” While hard to quantify at times, the avoided risks and avoided claims are the biggest ROI because of the extra effort needed to turn someone around from an unhealthy lifestyle vs. keeping them on a healthy track.

Have questions about tracking claims data and using analytics to prove the progress within your population? Give us a call and we can walk you through our methodology and ways you can deploy our best practices within your population. 



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