May 05

The Municipal Health Cost Crisis

The fact that all employers, including municipal governments, are facing a crisis in rising health care costs is not really earth shattering news. In fact, all of the headlines have probably been written to capture every angle of this growing problem. Here are just some of the headlines from the past few years.

“Rising Health Insurance Costs Eat Up Raises”
“Medicare HMO’s Cutting Coverage, Increasing Rates”
“Workers Pay More for Same Flawed Health Plans”
“Workers Brace for Steeper Health costs”
“Public Workers Hit the Picket Line” (Overall health care costs)

There are literally hundreds of similar headlines at the top of articles, which spell out scenarios of doom and gloom for employers and their employees. Where are the positive headlines? Where are the answers to this growing health care crisis? The solutions, if they can be called solutions, have primarily been of the draconian type such as:

  • Increases in co-pays by employees.
  • Increased premiums for employees.
  • Drug coverage limited to generics. If none available the patient pays.
  • Annual caps on hospital costs.
  • Increases in deductible charges.

Employers are also cutting coverage to retired employees and it is estimated that the average employee will incur health care costs of $100,000 plus from the time they turn age 65 until they pass to the great beyond. As these costs are passed on to employees, either before or after retirement, some very unhealthy impacts will be felt.

  • People will reduce their usage of the health care system, which will reduce costs but may also increase the risk of becoming increasingly ill in the future. This will lower the quality of life for these people as well as increase cost later.
  • People will have less money to spend on non-health related items, which means the economy will suffer. When consumer spending declines this eventually leads to the loss of jobs, the closing of businesses and then the loss of tax revenues for governments.

For local governments, and governments at all levels, this disturbing scenario is happening now. Health insurance costs are increasing at double-digit rates every year for most governments. Health costs are consuming and ever-larger percentage of the government’s annual budget and 70% of employers, mostly private sector, indicate they plan to increase the share of costs paid by employees. Some creative cost cutting plans have been given names such as disease management or flexible plans, but they are usually just clever names for options designed to decrease the use of health plan benefits. They do not address the root cause of the health care problem, which is more people becoming chronically ill due to poor lifestyle choices and other preventable actions. This is where the real cost savings lie.

Why Health Care Costs are Increasing

Believe it or not, we may be living longer but those additional years are not as good as we thought they were going to be. In 1960, about 10% of the population was chronically ill and now over 40% are suffering from illnesses such as diabetes, asthma, arthritis, gastrointestinal problems or emotional conditions like depression. The reasons for this alarming increase in illness are not a well kept secret, in fact they are well known to most of us.

  • Over 63% of the population is overweight.
  • Only 16% of the population gets enough exercise.
  • Only 1% of the population gets all of the nutrients they need from the food they eat.
  • About 80% of all illnesses are caused or made worse by stress.
  • We take too many prescription drugs, which in many cases contributes to the weakening of our immune systems and organs such as our livers and kidneys.
  • There are more toxins in the air we breathe, the food we eat, and the water we drink, which increases toxicity in our bodies.

So is it any wonder that we are more ill then we were 4 decades ago and this in spite of the fact that over 70% of all illnesses and disease are preventable? We only spend 5% of all health care dollars on prevention with the rest (95%) going for treatment. Our medical establishment has been concentrating on the treatment side of the health equation for over 70 years and most of what we have to show for it is higher bills and worse health. The reason for this emphasis on treatment is equally simple to figure out.

  • Doctors don’t really stand to benefit if fewer people are ill. The system rewards them for treating people not preventing illness.
  • Drug companies make billions of dollars every year because people are sick. Why would they want to change that?
  • Hospitals make more money when their beds are full. They need more patients to pay for expensive equipment and staff.
  • HMO’s and insurance companies don’t want to make doctors or drug companies unhappy and the bigger they are the higher executive salaries can be.

There are very few people in the health care system who are truly motivated to prevent illness and disease. They want to treat you effectively so that you can live to be treated again later, but they really don’t want you to become permanently well or healthy. It’s just not in their financial interest to do so.
Employers Attempts to Control Cost
Employers, including municipal governments, are in a very different position than the health care system representatives just mentioned. Employers and employees would like very much to reduce the cost of health care because employers could be more profitable and employees could have more disposable income.
In 1965 medical or health expenses amounted to 7% of net profits in the average company. By 1992 this figure had risen to approximately 45% of net profits and now is over 60% of net profits. Medical costs are continuing to eat into profit margins for most businesses and the same thing is happening in the public sector.
The average cost of health care per employee per year is between $6000 and $8000 depending on geographic location, insurance provider and coverage. Although 70% of all illness is avoidable it is unreasonable to expect that degree of savings from even the most progressive wellness program. However, as we will see from examples such as the City of Birmingham, there is the potential to reduce expenditures the equivalent of 10% per year if aggressive prevention strategies are employed. This may amount to a neutralization of inflation and/or annual increases but would still be a welcome change for any organization.
This reduction in health care expenditures may also be matched, or exceeded, by reductions in absenteeism and improvements in productivity. In a study of nine businesses conducted in 1999 in Tampa Florida by the Employers Health Coalition Inc. it was determined that employers could save as much as $7,267 per year per employee if they could avoid the days lost due to the top 17 diseases causing employee absenteeism. The following table shows the details of these calculated savings.
Estimated Potential Savings Per 1000 Employees
Potential savings per annum = Average days lost X (% of workforce affected X employee
population) X average compensation/day X 13 four-week periods.

Table N 1999
Top 17 Diseases = Ave. Days Lost X Prevalence X Ave.Comp. 8 hrs X $15/hr X 13 four week periods = Est. Savings
Allergy = 3.1 X 258 X $120 X 13 = $1,247,688
Neck/Upper Back/Spine = 4.8 X 151 X $120 X 13 = $1,083,576
Lower Back/Sciatica = 4.5 X 126 X $120 X 13 = $884,520
Depression = 4.9 X 103 X $120 X 13 = $787,332
Arthritis = 3.4 X 139 X $120 X 13 = $737,256
Migraine = 5.7 X 79 X $120 X 13 = $702,466
Other Resp. Condition = 4.1 X 78 X $120 X 13 = $498,888
Hypertension = 1.2 X 172 X $120 X 13 = $321,984
Peptic Ulcer/Acid Reflux = 2 X 91 X $120 X 13 = $283,920
Asthma = 3 X 42 X $120 X 13 = $196,560
Diabetes = 2.1 X 50 X $120 X 13 = $163,800
Heart Disease = 2.7 X 38 X $120 X 13 = $160,056
High Risk Pregnancy = 5.7 X 28 X $120 X 7 = $134,064
Hepatitis = 1.8 X 11 X $120 X 13 = $30,888
Prostate Cancer = 1.4 X 7 X $120 X 13 = $15,288
Breast Cancer = .8 X 9 X $120 X 13 = $11,232
Colon Cancer = 1.3 X 4 X $120 X 13 = $8,112
Total of all 17 Adult Diseases = $7,267,632

Once again it must be stated that it would be unreasonable to expect 100% of these lost days to be reclaimed, but with the use of good health screening, natural medicine and advanced education techniques, 10% savings per year would not be unrealistic. A long-term target might be to eventually recapture 50% of these lost days for a value of $3,633 per employee per year. This could greatly reduce the need for additional employees and cut overall human resource expenses.

Natural Prevention and Treatment Options

If 70% of all illnesses are preventable, but the conventional medical establishment is ill equipped or motivated to move in that direction, where will the necessary changes come from? The answer is consumers (employees) and employers because they are the ones who are suffering health wise and financially from the current systems inability to address the health care crisis. People don’t want to become ill but they fall prey to many unhealthy lifestyle habits, believe nothing will happen to “them” and then put an inordinate degree of trust in a health care system that is failing them on many fronts.

Our current medical system does an excellent job when it comes to fixing broken legs or gun shot wounds but not well at all when it comes to treating heart disease, cancer, diabetes, arthritis, and many other chronic diseases. The 30-year “war on cancer” has been a phenomenal failure by all accounts. Dean Ornish treats heart disease with diet and exercise much better than most surgical or prescription drug treatments. Vioxx has been proven unsafe for arthritis sufferers and there are much safer and better natural treatments. Most knee surgeries have shown to be unnecessary. Hormone replacement therapy has been proven unsafe. And in a three-year study of pre-diabetic patients diet and exercise outperformed the leading prescription drug 59% to 31% in terms of keeping people from advancing to full-scale diabetes. Many Holistic Medical Doctors have been able to increase this success rate from 59% to over 80% with the use of a few key supplements such as chromium picolinate and gymnenia sylvestre. These safer, cheaper, better treatments are being validated in clinical studies and practice at a very rapid pace as we can see from the following sampling.

Alcoholism – Supplements such as Vitamin B1, magnesium, essential fatty acids, and others produced a 74% success rate over 12 years at a clinic in Minneapolis.

Back Pain – A California study of 1.7 million patients found a 25-30% reduction in low back and neck pain claims for patients using chiropractic services. Cost savings exceeded 50% compared to the group without chiropractic coverage.

Kidney Disease – A daily dose of 180mg of Co-enzyme Q 10 was able to allow 50% of patients on dialysis to be removed from these blood-cleansing machines in one trial.

This is just a small sampling of the “natural remedies” that have been proven to be safer, less expensive and more effective than the preferred treatments of the medical establishment. The question most often asked after this type of information is presented is “Then why aren’t the doctors and hospitals using these treatments?” The answer is, some are, but most aren’t because most doctors have never been taught about nutrition or natural medicine. They don’t learn about it in medical school, they don’t hear about it at their medical conventions and the drug companies keep them busy reading about all of their research. The Federal Drug Administration is staffed by scientists and doctors sympathetic to the drug industry and even though some medical journals feature articles on natural medicine there are very few incentives for doctors or hospitals to change the way they treat people. The lack of financial incentives and the unwillingness to change are the two most often cited reasons why the medical establishment is not embracing these safer, less expensive and more effective natural treatments, but that must change if the health care crisis is going to be addressed.

Reform to help this shift to natural medicine was given a big boost in the year 2000 with the creation of the White House Commission on Complementary and Alternative Medicine Policy. Chaired by James S. Gordon, M.D., the Commission found that the United States spends twice as much per person on health care than any other developed country and that costs could double in the next 10 years if something isn’t done soon. Based on 20 months of public testimony the commission concluded that there is a definite need for a better balance of conventional and complementary therapies. They also emphasized the importance of self-awareness and self-care including nutrition, exercise and mind-body approaches. The Commission submitted their report in 2002 and while funding for National Institutes of Health studies on natural therapies has increased there have been few other policy changes of any significance.

It would seem that the primary impetus for change will continue to come from employers and employees where the creation of wellness plans has begun to institutionalize some of the prevention and natural treatment protocols that have emerged over the past 20 years.

Wellness Programs Offer Hope

Wellness programs were started in the 1970’s and became a serious part of some organizations during the 1980’s. The development and maturation of this movement has been gradual but there is considerable room for improvement. Most organizations still utilize what might be considered first generation wellness programs with passive activities, little real planning, marginal prevention efforts, and virtually no cost-benefit analysis. The second generation of wellness programs has started to emerge in organizations such as Steelcase, Inc., where there is a plan, some attention to long-term prevention, and good cost-benefit analysis. This article suggests the need for not only rapid movement of all wellness programs to this second generation but also further advancement to a third generation of wellness programs where natural medicine and advanced educational techniques are an integral part of the program. The movement of wellness programs in this direction must begin with a better conceptual understanding of how wellness programs fit into the overall business and strategic planning of an organization.

Municipal Wellness Programs

What most wellness programs are doing – Many municipalities are providing a range of health improvement services that are being used by a limited number of employees (30-40% at most).

1. Health Fairs – Usually once each year featuring informational exhibits and variuous health screenings.

2. Newsletters – Usually once each month with health news and tips taken from magazines, books and web sites.

3. Fitness Programs – Can be classes, instructional assistance by in-house trainers or subsidized memberships at local health clubs.

4. Workshops – Can include classes on heart health, stress management, nutrition and other topics provided by local health practitioners or non-profit organizations.

5. Weight Loss Campaign – Can be classes or individual coaching by health practitioners on weight loss strategies. Some organizations incorporate a Weight Watchers type program.

6. Health Screening – Various health screenings such as blood sugar and cholesterol are conducted and results passed on to the employee’s physician for counseling.

7. Incentive Programs – Some organizations provide financial and non-financial incentives to encourage employees to attend workshops, health screenings or other wellness programs.

8. Safety Programs – Can include a variety of things including signs, work site assessments, safety check lists, etc.

9. Smoking Cessation – Can include classes, incentives, or specific strategies such as the nicotine patch or prescription drugs taken orally or as injections.

10. Web site – Many organizations have web sites where new wellness information is posted on a regular basis to provide employees with encouragement to become healthier.

These types of wellness programs are fairly passive since they are voluntary and not driven by any outcome measures. They may have targets for participation or track improvements in weight loss or cholesterol levels, but they do not usually track Return on Investment or impact on the overall cost of health care. The reasons for these limitations usually can be traced back to the level of resources provided to the wellness program (not very high) and/or the level of knowledge and experience of the wellness coordinator. Municipalities, and most private sector organizations, have not been willing to put up the money to hire the best staff or a sufficient number of staff to get the results that are possible.

What Municipal Wellness Programs Could Be Doing – There are a few private and public sector organizations which have taken their wellness program to a higher level. These programs are considered best practices and although very few organizations incorporate all of these program ideas they should, and someday they will, if they want to achieve the potential cost savings from the prevention of illness and disease.

1. Targeted Illness Reversal Programs – A few organizations have decided to tackle diseases such as diabetes head on with aggressive diet and exercise programs. They have realized some measure of success but could achieve much higher levels if they were to include the use of clinically proven nutrients and herbs that can help to stabilize blood sugar and even regenerate an ailing pancreas.

2. Prescription Drug Replacement Program – A few organizations have tried to reduce the cost of their prescription drug programs by encouraging the use of generic brands and getting doctors to cutback on possible over use of these drugs for some illnesses. The real savings could occur if doctors became more knowledgeable about the ability of nutrition, supplements and natural treatments such as acupuncture to improve employee health. Clinical studies are consistently showing that these more natural approaches are less costly, have fewer side effects and improve a persons overall health.

3. Back Injury Avoidance – While some organizations examine workplace ergonomics and recommend changes in furniture design or work methods there is till more that could be done. Chiropractic services have been clinically proven to dramatically reduce absenteeism due to back problems compared to conventional medical approaches. Still other studies have shown the value of stretching, stress reduction and proper nutrition in the reduction of back and other joint related injuries.

4. Environmental Toxicity Control – Some organizations monitor air quality and other hazardous exposures at work as well as testing employees for the presence of toxins in their blood or urine. This is good but could be augmented by giving every employee a self-assessment checklist for their potential toxic exposure at home.

5. Detoxification Programs – A few organizations follow through on their toxicity testing programs by sending employees to professional detoxification programs if they are found to have high levels of a specific toxin. However, very few, if any organizations systematically encourage all employees to detoxify. Since many diseases are caused by toxicity and most people are toxic to some degree, this makes sense from an illness prevention point of view. A detoxification program could include payments for saunas or steam baths, information sheets on foods that aid in detoxification and payment for natural health practitioners specializing in detoxification services.

6. Nutrition Assessments – Some wellness programs provide classes on nutrition but much of the information is inaccurate due to the flaws in the USDA Food Pyramid. Since most illness is caused, at least partially, by poor nutrition this is an area of considerable potential cost saving. Blood and/or hair analysis can be used in conjunction with dietary assessments to determine nutritional deficiencies. The Centers for Disease Control estimates that 99% of the population is deficient in at least one essential vitamin, mineral, amino acid or essential fatty acid.

7. Health Advisory Task Force – Some wellness programs seek the assistance of local health practitioners or university health departments, but very few have formed advisory committees with members drawn from a cross section of health disciplines. By bringing alternative or natural health practitioners together with conventional medical doctors and scientists it would be possible to consider all of the latest scientific, clinical and practical experience in the development of a wellness program. There is too much reliance on the conventional medical establishment which often has not read the scientific studies conducted by bio-chemists, leading nutritionists or other natural health practitioners.

8. Wellness Facilitators and Wellness Teams – Most wellness programs depend on a centrally based wellness coordinator who can only impact a small percentage of the workforce at any given time. A few organizations have created wellness teams in order to create a presence of the wellness program in every department and every location. This can reap many benefits if these teams have qualified and well trained wellness facilitators who are given the time and budget to properly roll out the organizations wellness program.

9. Cost Benefit Analysis – Very few organizations conduct proper cost benefit analysis of their wellness program. At the very least every program should be encouraged to calculate the Return on Investment realized during the year. At the very most organizations should have specific and measurable outcome objectives, which are tracked with a reliable performance measurement system. Targets should include reductions in obesity, reductions in cancer cases, reductions in heart disease, reductions in diabetes cases, reduced doctor’s visits, reduced prescription drug usage and reduced absenteeism. All of these reductions should be driven by an overall goal of reducing health care costs by a specific percentage, increasing employee health and increasing overall productivity.

10. Organizational Assessment and Planning – Organizations need to realize that the way they plan and operate can have a definite impact on employee health. That is why every organization should conduct some type of self-assessment using criteria such as those provided by the Baldrige Quality Award. A quality wellness program can only produce outstanding results if it exists within a quality organization. Employee productivity and health are directly related to employee morale. Every wellness program should be guided by a high-quality wellness strategic/business plan, which is an integral part of the organizations strategic/business plan.

In most of the previous wellness program activities there will need to be some educational component. This is often one of the weakest aspects of a wellness program because wellness coordinators are not usually qualified as adult educators. Wellness coordinators may be registered nurses, exercise physiologists or simply a person within the human resource department designated to coordinate the wellness program. When these wellness coordinators seek out people to be a presenter in the wellness program they usually look for someone who can deliver a program free or inexpensively. They may also depend on representatives from local non-profit groups like the Heart Association or the Lung Association. These can be serious mistakes because this type of presenter is usually not aware of natural medicines benefits and not experienced in advanced educational techniques. Getting employees to change very entrenched lifestyle habits requires someone with very advanced knowledge in both state of the art natural medicine and advanced education techniques. This may require having someone from a qualified wellness consulting firm, however this investment is more likely to produce the desired lifestyle changes and R.O.I.

City of Birmingham Case Study

The City of Birmingham became interested in controlling medical expenses in 1985 after realizing that during the previous nine years the City’s medical benefit expenses had increased at a rate nearly twice the national average. Medical benefits costs had increased from $1.5 million to $7.6 million or from 3.8% of their payroll to 11.6% of their payroll. The City calculated that by the year 1990 the cost of medical benefits would increase to $33 million if nothing was done to reverse this trend.

The City began a cost-management program by hiring a consulting firm to examine their existing health and insurance programs. Several recommendations were made including the building of a fitness center, the initiating of a wellness program and the conversion from a traditional health insurance program to a self-funded plan. The wellness plan was developed with the assistance of the University of Alabama at Birmingham Medical Center and Wellness South, Inc., a private wellness consulting firm. The city paid for the first year of the wellness program $200,000, from the savings of converting to the self-funded plan. The City also applied for, and received, a grant from The National Institutes of Health and the National Heart, Lung and Blood Institute to conduct a five-year study on the changes being made in the City’s health and wellness program as well as to expand the initial program to cover all employees.

The City has 4000 employees working in 30 departments in over 100 different locations, which created a variety of challenges in developing a wellness program to meet the needs of all employees. However, after a series of slide presentations 83% of the employees volunteered to be involved in the initial program. Only 1100 employees were selected to participate in the wellness program and they were divided into two equal groups, a wellness group and a control group. Health risk assessments were conducted. The wellness group employees were encouraged to attend health information sessions every 2 weeks during working hours and special intervention sessions on topics such as smoking cessation, stress management, weight reduction, cholesterol modification and other health improvement topics. Employees in the control group did not receive this same information. Participation rates in the various specific intervention sessions ranged from 10% of eligible employees in the hypertension sessions to 43% in the weight reduction sessions. Some sample results include 55% of smokers participating had stopped smoking after 6 months and 76% weight loss participants had lost from 5 to 100 pounds.

The success of this initial wellness program led to a five-year grant to continue it in the amount of $3 million with half coming from the NIH and half from the City. All employees were offered a chance to participate with 95% agreeing, probably due to the fact that those who did not participate would not have access to the City’s new medical benefits program. (Lawyers decided at the time that this was legal to do.)

In this extended five-year program all programs, except the back injury prevention program, were offered on employee’s time, usually immediately after work. Programs were offered at convenient work site locations by staff from Wellness South or U.A.B. Variuous kinds of incentives were included such as good health dollars redeemable at a local department store. Other incentives included gym bags, t-shirts, certificates of achievement, and a draw at the end of the year for a trip for 2 to the Caribbean.

In 1985 the cost per employee for medical benefits was $2047, which was about $300 a year above the national average. After the five year wellness program the cost per employee had only increased to $2075, which was $1200 below the national average. The City of Birmingham had managed to hold their medical benefits costs constant during those five years while the medical benefit expenses of the average employer had doubled. A significant part of the savings for Birmingham occurred because the required medical screening found 13% of the employees in need of immediate medical care. When cholesterol or blood pressure levels were found to be above a certain level employees were either rushed to the hospital or referred to a physician immediately. This one feature probably saved the City hundreds of thousands of dollars in potential future medical costs.

The City has realized many other illness and accident prevention benefits both during their initial program (1985-1990) as well as afterward. For example, smoking rates have decreased faster than the national average going from 38.1% of employees smoking in 1986 to only 20.1% smoking in 1998 and 15.9% in 2003 (National Average is about 23%). Firefighter fitness levels have increased from 39.7% testing below average in 1989 to only 3.5% testing below average in 1998 and none testing below average in 2003. The mean cholesterol level of all City employees dropped from 211 mg/dl in 1986 to 199 mg/dl in 1992 and 194 in 2003. These and other similar health improvement were not coincidental. The City created very specific and measurable health improvement objectives in all of the targeted health improvement categories. Examples are as follows.

Objective 15.16 – To increase to at least 50% the proportion of work sites that offer high blood pressure and/or cholesterol education and control activities to their employees.

Objective 1.4 – A net increase of at least 20% of the proportion of people who engage in vigorous physical activity three or more days per week for at least 20 minutes per session. (The current rate is 55% of all employees.)

In addition to a full set of specific and measurable objectives, health screenings and incentive programs the City used other tactics to ensure the success of their program.

• Confidentiality was a key consideration and the City proved, over time, that the system was trustworthy.

• The wellness program was continuously and creatively marketed to employees on an ongoing basis.

• An employee advisory committee and communication plan was initiated to ensure all supervisors were on board.

• Union leaders were involved from the beginning and throughout the program.

• Statistics were kept on all aspects of the program to ensure a good cause and effect relation between programs and desired results.

As a result of this wellness initiative the City of Birmingham increased the health of their employees considerably, thus saving millions of dollars in avoided medical expense, reduced absenteeism and improved productivity. The percentage of the City’s payroll dedicated to medical insurance cost was 11.6% in 1988 and only 10.3% in 2002 even though inflation during that time for health costs was over 200%. The City also received national recognition and numerous awards for their efforts including:

• The C. Everett Koop National Worksite Health Award in 1993.

• The Exemplary Public Worksite Health Promotion Award in 1994.

• A Best Practice Organization designation in 1995 by the International Benchmarking Clearinghouse.

Return on Investment

Even though 70% of all illness and disease is preventable it would be unreasonable to expect a reduction in health care costs of that magnitude even with the most progressive wellness program. Some illnesses are so far advanced that there is little hope of reversing or controlling them very much. Also, some people will simply not be ready, willing and/or able to make the necessary lifestyle changes to reverse their health problems. However, some return on investment is possible immediately with a good wellness program and this R.O.I. increases with every year to the point where most employers should be able to reduce their medical expense from 20 to 40%. The proof of this potential saving can be seen in the following examples from existing wellness programs.

• Smoking Cessation – The Travelers Corporation realized a R.O.I. of $3.40 for every $1.00 spent when they implemented a smoking cessation program. They experienced a 19% decrease in sick time as well.

Heart Health – Reynolds Electrical and Engineering instituted a multi-faceted heart health program including weight loss, cholesterol level reduction and blood pressure control, which cost $76.24 per employee but immediately saved $127.89 per employee. When long-term health problem avoidance is factored in these savings will likely grow to more than 5 to 1.

• Comprehensive Wellness Program – Coors and the Bank of America both instituted very complete wellness programs, which produced R.O.I.’s of $6.15 and $6.00 to one respectively.

• Back Care – L.L. Bean started their back care program in the late 1980’s as part of a broad wellness program which included stress management, nutrition, massage and yoga. Between 1989 and 1993 they realized a 70% decrease in lost time claims due to back injuries. Back pain impacts 60-80% of all adults at a cost of more than $50 billion per year for employers.

• Prenatal Care – Home Depot started its prenatal program in 1992 when premature birth claims totaled $1.6 million. Within three years claims were reduced by 77% to $364,000. The companies premature birth rate is just 4.1% of all births compared to the national average of 10.8%.

• Breast Cancer Reduction – Smith-Kline Beecham Corp. initiated a breast screening program at a cost of $53,000 with an estimated savings of $450,000 or nearly $8.00 saved for every $1.00 spent.

• Low Risk Prevention Program –
Steelcase, Inc. of Grand Rapids, Michigan started their wellness program over 20 years ago and estimated they saved over $20 million in the first 10 years. Steelcase found that high risk employees spend 75% more on medical care than low risk employees. However, the biggest long-term savings in their wellness program is coming from keeping low risk employees from advancing to the high risk category. Education and lifestyle coaching are used to produce these very desirable long-term benefits.

• Weight Loss – In 2004, Hillsborough County Government (in Florida) initiated a series of wellness workshops at a cost of $700 for a three and a half-hour workshop. About 8 weeks after the nutrition workshop one employee had lost so much weight, and brought her cholesterol and blood sugar into normal ranges, that she removed herself from the list for gastric by-pass surgery. The immediate savings was $20,000 for the operation or more than $21 saved for every $1 spent. The County will get additional savings as this employee and others at the workshop become healthier and are able to avoid future health problems.

• Diabetes – Hillsborough County also held a workshop on natural ways to prevent and reverse diabetes. In less than 10 weeks one diabetic employee was able to reverse his condition, much to the amazement of his physician, and another pre-diabetic employee was able to reverse her condition. The potential savings for just these two employees will likely exceed $50,000 over the term of their employment. This is due to the reduced cost of medications as well as the avoidance of diseases such as macular degeneration, hearth disease, pancreatic cancer and even amputation. The return on investment will be over 50 to 1 since the cost of the workshop was only $750.


Wellness programs have the potential to reverse the current health care crisis facing municipal government, all employers and even the country’s crisis, but only if they are done correctly. Most wellness programs, even in the most progressive organizations, are not taking full advantage of the natural therapies, business planning strategies, and advanced educational techniques necessary to get the best return on investment. Steelcase, Inc. came close with their attention to low risk employees and they will reap long-term benefits with this strategy as fewer employees advance to the high risk, high cost category. Hillsborough County Government has also flirted with a best practice strategy by utilizing advanced education techniques to realize a more than 20 to 1 return on their investment in one case and 50 to 1 in another. However, they have not yet embraced this approach as part of their ongoing wellness program due to some organizational inertia and the lack of a progressive business plan.

If employers want to realize 20 to 1 or higher R.O.I.’s they will need to push the medical establishment, the insurance industry, and their own organizations a little harder in the directions presented in this article. The self-insured organizations will have the best opportunity to push for these changes but even they will need the help of someone inside the organization with a vision based on prevention and natural medicine. They will also need to reach out into the community and find the health educators and practitioners who can help them strive for that vision.

• Old, Ill, and Uninsured by Howard Gleckman, Business Week, April 7, 2003.
• An Apple A Day – On The Boss – Business Week, October 14, 2002.
• What’s Ailing companies: Medical Bills – by James Mehring, Business Week, Nov. 18, 2002.
• Public Works Hit the Picket Line – Governing Magazine, November 2001.
• The Coming Revolution in Health Care by Howard Gleckman, Business Week, May 6, 2002.
• The Birmingham Good Health Program: Meeting healthy People 2000 Objectives – Kathleen Brown, R.N., Ph.D., et al, Health Values, 1995.
• Hormone Replacement Study A shock to the Medical System by Gina Kdata and Melody Peterson, New York Times, 2002.
• More Seek Alternative Remedies, Survey Says, Sarasota Herald Tribune, May 28, 2004.
• Alternative Medicine Gains in Popularity by David Perlmutter, M.D., Sarasota Awakenings Magazine, March 1999.
• Head To Toe Alternative Remedies Guide by Jacqueline A. Hart, M.D., Body & Soul Holistic Health, Winter 2003.
• Tired of Killer Cures? by James S. Gordon, M.D., Washington Post, August 20, 2002.
• Complementary & Alternative Medicine V, National Business Journal, Volume VIII, No. 9, September 2003.
• Healthy, Wealthy and Wise: Fundamentals of Workplace Health Promotion, Sandra Wendel, Editor, Wellness Councils of America, 1995.
• Evaluating Worksite Health Promotion by David H. Chenoweth, Ph.D., Human Kinetics, 2002.
• Economic Impact of Worksite Health Promotion by Joseph P. Opatz, Ph.D., editor, Human Kinetics and the Association for Worksite Health Promotion, 1994.
• Severed Trust: Why American Medicine Hasn’t Been Fixed by George S. Lundberg, M.D. (former Editor of the American Medical Association Journal), Basic Books, 2000.
• Overdosed America: The Broken Promise of American Medicine by John Abramson, M.D., Harper Collins, 2004.
• The Changing Face of U.S. Health Care – The Employers Health Coalition, Inc., Tampa, Florida.

© Charles K. Bens, Ph. D.