July 11, 2012

hr.com

Healthcare Employers Turn to Wellness Programs to Suppress Rising Costs

In 2012, roughly two-thirds of healthcare employers experienced increases to their medical insurance premiums, according to the 2012 Compensation Data Healthcare survey results. The average increase reported by these organizations was 8 percent, down from 9.5 percent reported in 2011 and 9.4 percent in 2010. Despite the drop in the average premium increase, healthcare organizations still contribute 9.5 percent of their total payroll costs toward providing medical insurance to their employees. Employers everywhere are looking for ways to curtail rising healthcare costs and as a result, many are turning to wellness programs.

For years, wellness programs have consisted of traditional options such as weight management, tobacco cessation programs or offering flu shots and immunizations. But over the last few years, some wellness options have shown a more accelerated rate of use. Biometric screenings, which measure an individual’s blood pressure, body mass index (BMI), cholesterol and blood glucose in an effort to identify risk factors, are a good example of this trend. In 2009, biometric screenings were offered at only 16.9 percent of healthcare organizations surveyed, compared to 36.1 percent in 2012. Physical fitness facility access, onsite health clinics and offering rewards and incentives have also increased over the last few years.

"The upshot of a well-executed wellness program does not lie just with reduced medical costs," said Amy Kaminski, director of marketing for Compdata Surveys. "Many employers are experiencing a positive impact on their bottom line as a result of greater employee productivity and reduced absenteeism."

Other methods used by healthcare employers to reduce and contain costs include using a network of healthcare professionals at 79.7 percent, increasing the employee portion of the premium at 65.3 percent and offering disease management at 62.8 percent. Nine percent of healthcare organizations report a surcharge for enrolling an employee’s spouse on their medical plan, if the employee's spouse is eligible for benefits under their employer's own plan.
 

As employers face rising premiums in healthcare and workers compensation premiums, many are turning to wellness and safety programs in order to lower costs. Although these programs are beneficial and can have a positive effect in the long run, they can cost a lot of time, money, and resources to implement. With workers compensation premium recovery, employers see immediate results with significant refunds on overpaid workers comp premiums, lower experience modifications, and future savings to keep.