Justifying Workplace Wellness Programs ROI

The macro and micro economics of Corporate Wellness & Nutrition Programs

Higher Workplace Wellness ROI through lower healthcare costs for Employers

National Healthcare Expenditures

It is no secret that healthcare costs have been an issue for the U.S. economy. Our chart put’s this into perspective. According to data by the BEA & CMS, National Health Expenditures are now more than investments in fixed investments as well as national defense.

Think about that, we spend more as a country on keeping ourselves alive than on defending ourselves and investing in structures like housing, roads, commercial & government structures, etc.

To stay competitive many of these costs are born by corporate america.

Inflation Rate of Medical Services

The 2016 spike in healthcare costs as a result of the Affordable Care Act (ACA) led many insurance companies to flee the market.

Small business owners were impacted in a big way.

ACA requires small business with 50 or more full time employees for six months or more to now offer Minimum Essential Coverage or (MEC).

Companies are now looking for innovative ways to lower cost and adapt.

A 2017 study by the NBER found that small business are adapting quickly to the new norm. The paper states that between 28,000 and 50,000 businesses in the U.S. appear to be reducing

their number of full-time-equivalent employees to below 50.

Corporate Wellness Programs are nothing new. They have often been seen as a nice perk in larger corporations

But now employers are looking to Wellness Programs that can help reduce healthcare costs and boost Corporate ROI.

According to Healthcare.gov, the maximum reward to employers using a wellness program that’s contingent on employee health has increased from 20% to 30% of the cost of health coverage.

Lower Healthcare Costs for the Employee

Healthcare Costs for the Consumer

It’s not just employers but the American Consumer caught up in this “Mess” as Greg Glassman puts it!.

According to our data, for the first time in U.S. history, healthcare expenditures by the average American consumer is the biggest line item in our budgets

It eats the biggest chunk of personal income. More than financial obligations (mortgages, credit cards, student loans, etc) taxes, as well as the food and energy bill.

And it doesnt show any signs of slowing!

To achieve a lasting ROI a Wellness Program needs to have a nutrition component.

Obesity Rates Across The U.S. Have Increased Rapidly!

Obesity Rate in 1985
Obesity Rates in 2000
Obesity Rates in 2017

You may be a proponent of ACA or against it but it doesnt hide the fact that the root cause of  this mess we are in is nutrition.

The charts from the CDC show obesity trends since 1985. Clearly the American Diet is at the cause of such obesity rates.

 90% of our Nation’s $3.3 Trillion in healthcare expenditures are directly related to chronic disease and mental conditions with the former constituting the bulk of it.

Chronic diseases in the form of obesity rates, cardiovascular diseases, and diabetes can all be linked to the nutritional choices we make and provide to our workforce.

Exercise vs. Exercise & Nutrition Chart

On an anecdotal level, at Signum CrossFit we have seen the results first hand with our Personal Training Clients. Clients that pursue a proper nutrition and exercise program see more dramatic results than clients that only pursue an exercise program with us.

 The media, shoe companies and other product companies want you to believe it. But you CAN NOT out exercise a bad diet. Period!

Dont believe us? A 4-year long study found that a proper nutrition plan was the key factor when it came to sustainable weight loss!

A proper nutrition program should be able to educate as well as provide accountability and guidance.

There are a lot of fad diets and advice on the market and we find that many are just not educated when it comes to proper nutrition.

Studies have found that Wellness Programs boost ROI over the long term.

 A study done in 2010 (before the spike cause by ACA) found that medical costs can fall by about $3.27 for every dollar spent on Wellness Programs.

 The same study also found that absenteeism costs can fall by about $2.73 for every dollar spent.

 A Wellness Program can also boost Engagement and hence ROI!

We live in the “Uber Economy” where our workforce is evolving.

 According to a 2017 Gallup Survey 43% of Americans report they have spent some time working from home. In fact compensation is not the only thing recruits consider in accepting a position.

The ability to work from home plays a major role in employees decisions to accept or reject a job offer.

 According to a study done by FlexJobs the number of telecommuters doubled between 2005-2017. And the average telecommuter is +46 years and has at least a bachelors degree.

 While this is a nice perk. As a small business owner this can have the effect of creating an environment where team building skills and engagemetn is sacrificed.

 So when considering the ROI of your wellness program we must consider how the workplace is evolving!

 

A Corporate Wellness Program that promotes teamwork can boost productivity!

Employees that stay engaged in today economy show up to work and do more! Studies have found that highly engaging business units can see a a 41% reduction in absenteeism and a 17% boost productivity.  As a result they see 24% less turnover.

 One way in which a well run Corporate Nutrition program can boost engagement is through regular seminars, partner challenges as well as group competitions.

Such things help promote a sense of community and shows that employers care. But such things can also be a large administrative burden for employees to take on in addition to their regular duties.