• About MDM
  • Cart
  • Terms & Conditions
  • Privacy Policy
  • Cookies Statement
  • News
    • Premium Articles
    • Latest
    • Technology & Digital
    • Mergers & Acquisitions
    • Talent Development
  • Resources
    • Store
      • Market/Economic Data
      • Management
      • Economic Benchmarks for Wholesale Distribution
      • Sales & Marketing
      • Special Reports
      • What Customers Want
    • Conferences
    • Webcasts
    • Podcasts
    • Directories
      • Associations
      • Buying and Marketing Groups
      • Investment Bank Guide for Distributors
    • Free Reports
    • Partners
  • Research
    • 2019 Market Leaders lists
    • MDM Analytics
    • Economic Benchmarks
    • Industry Competitive Landscape
    • White Papers
  • Subscribe
    • MDM Daily Update
    • MDM Premium
    • Podcasts
  • Premium
    • Download The Issue
    • Subscription Renewal
  • Sign In
  • Sign Out
  • My Account
Home » Health Kick Your Corporate Wellness Program

Health Kick Your Corporate Wellness Program

March 8, 2005
D. Bruce Merrifield
No Comments
Corporate Wellness Programs (CWPs) have ebbed in and out of fashion since the late ‘70's, but the general trend has been for more companies - at least larger ones - to have them. Surveys unanimously conclude that CWPs yield good to great economic returns and that a steadily increasing number of them have offered incentives to employees to stop smoking, lose weight, etc. in order to reduce health insurance premiums, although most such cessation incentives" don't work (Hewitt Associates survey. For more on this and all other references go to this article's support notes at http://www.merrifield.com/articles/5_16SupportNotes.asp.)


 


Small businessAmerica has, however, lagged big businesses in CWP activity, perhaps because managers assume that a CWP might take too much administrative time, structure and money. These myths aren't true. Managers of all size businesses now have three big reasons to take another look at their assumptions about the necessity and purpose of CWPs. Consider:




  • Health insurance costs have gotten critically high while American health statistics have continued to deteriorate for both children and middle-age workers.

  • Federal legislation has created high-deductible, low-premium, health savings accounts (HSAs) that will have huge direct and indirect impacts on how companies hire and retain healthy, energetic workers and avoid hiring - if they want to - heavy, health-benefit users. This opportunistic cherry-picking of the "insurance pool" will in turn threaten the business models of large healthcare providers and be a catalyst for "consumer-driven health care" reform, which is the unspoken objective of the Bush administration (Support Note #2). Regardless of personal political opinions on Bush's health initiatives, the first-mover, cherry-pickers will also threaten their competitors who don't switch to personnel practices under-girded by HSAs.

  • And, HSAs' deductible/savings economics will give all employees huge new incentives to be preventatively well and shop carefully for medical solutions; two skill sets that many are lacking. How will companies meet these educational needs?

 


Revised Assumptions on CWPs
CWPs should not be focused on just reducing or slowing down the increase of health insurance costs. If employees get healthier on average, then other hard and soft cost savings should follow. Sick days and absenteeism will drop. General productivity will increase because of fewer errors, accidents and injuries due to inexperienced substitutes. And, worker compensation claims will eventually decrease. Some soft economic benefits are: improved attitude of employees towards the employer for caring about their well being; increased stamina and self-esteem for many. These improvements will in turn allow a company to:




  • Retain existing business better by out hustling the competition for jump balls and the delivery of more heroic services and recoveries.

  • Invent new streams of profit growth through better innovative execution due to a greater bottom-up, "can do" commitment and energy from a critical mass of employees.

  • Retain and recruit better employees to a better long-term growth story that rewards all company stakeholders.

No wonder big companies conclude that their total return on investments in CWPs can range from 2 to 12 times the investment.


 


A second big assumption is that CWPs should not be designed for "the average" employee because there are two extreme sub-groups. The top 10% of the heavy benefit users in an insurance pool will, on average, chew up 69% of the health cost spend (the "10/69" group), while the bottom 50% use only 3% ("50/3")
Human Resources in Wholesale Distribution
  • Related Articles

    Investing in human resources

    Wholesaler-Distributor health insurance premiums leap higher

    Employee satisfaction

  • Related Products

    Article Access:Industrial Distribution Is Alive, Well and Kicking It!

    How well do you really know your customers?

Previous 1 2 3 Next
Bruce-merrifield-copy
D. Merrifield

Research Health Savings Accounts

More from this author
Bruce-merrifield-copy

Recent Articles by D. Merrifield

The Blind Spots of Pricing Strategy

Strategy for 2006

Health Care Trends & Tools

Post a comment to this article

Report Abusive Comment

Popular Stories

  • Distributors are About to Get Commoditized

  • Distributors Struggle with Online Pricing

  • Finding Your ‘Why It Matters’

  • Convenience Will Deliver Sales and Loyalty

  • What are College Seniors Looking for as They Enter the Distribution Field?

Subscribe to MDM Update Newsletter

Your best source for news and trends in the wholesale distribution industry

Join Today
  • ABOUT MDM
    • About
    • Terms and Conditions
    • Authors
  • HELP
    • My Account
    • Login Help/ Password Reset
    • Research
    • Privacy & Data Act

CONTACT
6309 Monarch Park Place, Suite 203
Niwot, CO 80503, USA
Phone (303) 443-5060 
Toll free (888) 742-5060

 

Copyright ©2019. All Rights Reserved

  • Privacy Policy
  • Terms and Conditions