New Research Shows That Prevention Is Key To Reducing Health Care
Costs For All Employees, Even Those With Chronic Conditions
ST. PAUL, Minn. and
NEW YORK, Nov. 19, 2012 /PRNewswire/ -- A recent study from
StayWell Health Management and Towers Watson demonstrates that cost
savings associated with health risk reduction begin accumulating in
as little as one year, particularly for those with chronic
conditions. Furthermore, the study demonstrates that, while a
reduction in employee health risks leads to immediate cost savings,
the accumulation of additional health risks soon leads to
substantially higher medical and pharmacy costs. Such findings are
critical for employers as they evaluate their strategies for
engaging employees in changing unhealthy behaviors and assess their
investments in workplace health management programs.
"This is one of the first multi-employer studies to explore the
specific timing of changes in health care costs related to
increases or decreases in health risks," said Jessica Grossmeier, Ph.D., vice president of
research at StayWell Health Management and a co-author of the
study. "The research supports a greater focus on prevention and
wellness. It also can help employers better estimate the short-term
financial impact of changes in individual and population health
risks."
The study, "Association Between Changes in Health Risk Status
and Changes in Future Health Care Costs: A Multi-employer
Study," was published in the November
2012 issue of Journal of Occupational and Environmental
Medicine (JOEM) and is available on the JOEM website.
Although health risks have been directly associated with higher
health care costs, and a growing body of research shows that
improving health can generate a positive long-term ROI, there has
been limited research on how soon cost savings begin accruing and
the relative cost impact of health risk accumulation versus health
risk reduction.
"This research not only demonstrates the level of savings that
can be expected, but it also begins to show how soon employers can
expect to begin realizing some change in costs as a result of a
change in health risk status," said Steven
Nyce, senior economist at Towers Watson and lead author of
the study. "This is crucial information for employers that have
made a commitment to improving the health and productivity of their
workforce. It also should enable employers to attract more senior
management support for investing in these programs."
Specifically, the study authors suggest that employers can
benefit from understanding the following key findings:
- If you reduce health risks, lower costs begin accruing very
quickly. In fact, there was a reduction in health care costs in
the same year risks decreased. Coupled with prior research showing
employers can "break even" on their wellness investment in year two
and achieve up to a 3:1 ROI in year three, this immediate savings
from risk reduction makes the financial case for prevention even
stronger.
- The financial implications for prevention may be even
greater than for risk reduction. For every health risk added,
costs increased by 45 percent above the cost savings that resulted
from eliminating a risk. This means that if organizations prevent
individuals from adding new health risks over time, their cost
savings will be greater than if they focus on eliminating a health
risk after it emerges.
- A long-term solution is better than a quick fix. In this
study, a greater immediate savings was realized from reducing
health risks for people with chronic conditions than for the
average employee. After controlling for differences in age,
gender and company, those with chronic conditions who added health
risks doubled the cost burden compared to those without a chronic
condition. Cost savings were four times greater for those with
chronic conditions compared to those without chronic conditions.
The study authors stressed that although there always will be a
highest-cost group, an ongoing focus on prevention can benefit the
entire population by avoiding chronic disease altogether in some
cases or slowing the progression and diminishing the severity of
chronic disease. All of these potential outcomes from prevention
will improve the company's total health care spend.
Previously published literature reviews and studies indicate
wellness programs can produce even greater immediate savings in
productivity-related costs, including reduced absenteeism,
disability and workers' compensation costs, as well as enhanced
work performance. Therefore, the combination of direct health care
savings, which grow over time, coupled with these more immediate,
indirect productivity savings, further supports the business case
for investing in a prevention-focused, population-based health
management strategy.
"The bottom line for employers is that if you start to change
employee behaviors, you will start seeing health care cost savings
very quickly. In fact, an employer can save an average of
$100 in health care costs per
employee per health risk eliminated in the year of the change, and
$105 per risk reduced in the year
following the reduction," said Nyce. "But if you don't keep healthy
people healthy and employees start accumulating new health risks,
you not only negate this savings but stand to add health care costs
of $145 per employee per health risk
added within just one year."
Nyce added that while the study findings provide employers with
specific short-term dollar amounts associated with risk change, the
total value of behavior change programs is not fully captured in
these study findings.
"More research is needed with a longer follow-up period to
measure the full cost impact of risk change," said Grossmeier. "We
know from extensive published research that program impact does not
fully emerge for at least three years, which means this study did
not have a long enough follow-up period to quantify the full cost
savings employers ultimately will realize from a given level of
risk reduction or prevention."
About the Study
This study integrated data from six large and diverse employers
representing the finance, manufacturing, health care, energy and
education industries, making this study the first multi-employer
study to demonstrate the cost impact of risk change. Nearly 23,000
individuals were included in the analysis, which combined
standardized health assessment data from a single provider of
health management services with health care (i.e., medical and
pharmacy) claim data from a single data warehouse provider.
About StayWell
StayWell Health Management, LLC, is a recognized leader in
delivering comprehensive population health management programs and
services that help organizations maximize business results by
improving employee health and productivity. Founded in 1978,
StayWell Health Management is a MediMedia USA Company headquartered in St. Paul. StayWell's programs help improve the
lives of millions each year. StayWell customers have received the
C. Everett Koop National Health Award and more than 40 WELCOA Gold
Awards for health management programs StayWell has developed. To
learn more about the company, visit www.staywell.com.
About Towers Watson
Towers Watson (NYSE, NASDAQ:
TW) is a leading global professional services company that helps
organizations improve performance through effective people, risk
and financial management. The company offers solutions in the areas
of benefits, talent management, rewards, and risk and capital
management. Towers Watson has
14,000 associates around the world and is located on the web at
www.towerswatson.com.
Media Contacts:
Barbara Tabor, APR
For StayWell Health Management
+1 651 230 9192
barbaratabor@comcast.net
Binoli Savani
+1 703 258 7648
binoli.savani@towerswatson.com
SOURCE StayWell Health Management