Corporate Healthcare Costs are on the rise. Are you prepared?

Corporate wellness is an important issue, because well employees are happy, productive employees who help businesses succeed and thrive. Nearly 85 percent of American businesses have some form of a wellness program in place, most often composed of guidelines for smoking cessation, weight management, fitness and back care.

Corporate Wellness is not a new topic.  In fact, participation in corporate wellness programs has increased almost 60% since 2006.  Poor employee health is directly related to health care costs, workers compensation costs, long term and short term disability costs, absenteeism and decreased productivity.

In addition to the direct costs of poor employee health, the soft costs of poor health in the workplace are now beginning to be recognized.  Recent studies suggest that Presenteeism—when employees in poor health show up for work—costs employers between 150 and 200 billion dollars annually, more than 60% of the cost of employers' total healthcare dollars.  Consider other soft costs of poor employee health—decreased employee morale, increased turnover rates, lower productivity and job dissatisfaction—and it is apparent that the corporate healthcare crisis goes far beyond what is measurable in dollars and cents.

Consider these recent national health care and wellness statistics:

•  Starbucks spent more on health care than on coffee (Wall Street Journal)

• Every GM vehicle includes $1500 in health-care costs/vehicle (more than cost of steel) while every Japanese vehicle includes only $450 in health-care costs/vehicle (Wall Street Journal, 4/9/06)
• Health care spending is 4.3 times the amount spent on national defense (California Health Care Foundation. Health Care Costs 101 - 02 March 2005)
• Workers are now paying $1,094 more in premiums/year than they did in 2000, and the average annual worker health-care premium is $2973 for family coverage. (California Health Care Foundation. Health Care Costs 101 -- 2005. 02 March 2005)
• Since 2000, employment-based health insurance premiums have increased 73%, while wage growth has only increased 15% (The McKinsey Quarterly Chart Focus Newsletter, "Will Health Benefit Costs Since 2000, employment-based health insurance premiums have increased 73%, while wage growth has only increased 15% (The McKinsey Quarterly Chart Focus Newsletter, "Will Health Benefit Costs Eclipse Profits," September 2004)