Local Government Wellness Programs: A Viable Option to Decrease Healthcare Costs and Improve Productivity

• Author: Haillee David,Abraham David Benavides
• Published date: 01 December 2010
• DOI: 10.1177/009102601003900401
• Date: 01 December 2010
• Subject Matter: Article

Local Government

Wellness Programs: A

Viable Option to

Decrease Healthcare

Costs and Improve

Productivity

By Abraham David Benavides, PhD, and Haillee David

In an effo rt to reduce the r ising costs of he alth care many l ocal governme nts are

turnin g to alternativ e and innovativ e strategies to mitigate the pr oblem. One

soluti on has been to offe r a wellness pro gram for employ ees. The articl e reviews

the rese arch on employe e assistance pr ograms and dif ferentiates be tween them

and the cu rrent wellnes s programs that are in place toda y. Wel lness program s

have pro ved to be cost eff ective and the re turn on investm ent has been wel l worth

the init ial cost. A recen t study is revie wed to show the cu rrent profile o f wellness

progra ms in the Dallas- Fort Worth Metrop lex. More local governments i n this area

have ini tiated wellne ss programs and the results so fa r have been encou raging.

The arti cle argues that , though wellne ss programs at t he local level of government

are not ne w, t hey have been rep ackaged as a pos itive alterna tive to reduce co sts.

A win/wi n situation ari ses for the publ ic employee whe n their health is promoted

and they are being produc tive stewards of tax payer doll ars.

Tipping the scales at more than 350 pounds, City of Coppell, Texas, employee

Stephanie Tumlison knew she needed to do someth ing about he r weight. Her

unhealthy eating habits and sedentary lifesty le made her feel tired at work and

at ho me. Her weight problem not only resulted in her agonizing about her appear-

ance, but increasingly created worries about her health. In 2004, Tumlison f‌inally

decided to take matters into her own hands when she joined the City of Coppell Liv-

ing Well Program. “I’ve lost 210.6 pounds. It was the foundation of the [city’s] pro-

gram that g ot me to the point to sa y; okay this is what I’m going to do.”1Tumlison’s

story of success and her battle with unh ealthy li festyle c hoices is echoed all a cross

America. The City of Coppell, like many other local governments a cross the Dallas-

Fort Worth Metroplex, are increasingly joining the ranks of organizations across the

nation that are looking at ways to help employees succeed in their own pers onal

health goals.

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Helping employees de velop a heal thy lifestyle can u ltimately benef‌it an

organization’s bottom line in a number of ways. Not only can a city increase

productivity and decrease absenteeism, but it can also save hundreds of thousands of

dollars a year in escalating insurance premium costs. Coppell deputy city manager Clay

Phillips noted that “spending a few dollars on the front end makes sense not only for

the organization and the employee, but also for the taxpayer. Health insurance

premiums are f‌lat, the city is being recognized nationally by the Wellness Councils of

America, and success stories like those of our employees are inspiring.”2

The rising cost of health care has caused a number of municipalities to look for

viable alternatives to increasing premiums. One such alternative has been the now

popular health promotion programs or wellness programs that are geared to improve

employee’s physical, emotional, and psychological health. A failure to try something

new would invariably lead to increased premiums and deductibles and dramatically

scale back benef‌it levels. The principal reasons therefore, for the rise in employee

wellness programs all over the nation, are mainly due to employers seeing the

programs as a means to help reduce rising healthcare costs and maintain a healthy

workforce.

U.S. health care spending is expected to increase for the next decade reaching $4

trillion in 2015, or 20 percent of GDP.3In 2005, employer health insurance premiums

increased by 9.2 percent – nearly three times the rate of inf‌lation. The annual premium

for an employer health plan covering a family of four averaged nearly $11,000. The

annual premium for single coverage averaged more than $4,000.4

The effects of rising health care costs are giving both private and public employers

limited options for providing total compensation packages. To attract and retain top

professionals both sectors need to balance the d emands on the organizations’ funds

with appealing benef‌it packages. The 2006 U.S. Chamber of Commerce's annual

Employee Benef‌its Study showed that employee benef‌it costs swelled in 2005 and now

account for more than 44% of payroll expenses. The repor t goes on to say that the cost

of employee benef‌its, as a percent of payroll, has risen 4 percentage points over the

past year. Medically related expenses cost employers $5,924 per employee, or 14.5% of

payroll, up from 11.9% as cited in last year's Employee Benef‌its Study.5

A second reason for concern for local governments is the state of health of their

employees. The Center for Disease Control r ecently reported that obesity increases

employer costs – including medical expenditures and absenteeism, by $460 to $2,500

per obese employee per year.6The leading cause of death in the United States today is

heart disease. A major contributor to this disease is the sedentary life style and poor

eating habits of a majority of the people. According to the National Center for Health

Statistics 30 percent of U.S. adults 20 years of age and older – over 60 million people –

are obese, def‌ined as having a body mass index (BMI) of 30 or higher. An estimated 65

percent of U.S. adults aged 20 years and older are either overweight or obese, def‌ined

as having a BMI of 25 or higher.7H.M. Blanck concludes that the prevalence of obesity

increased during 1995-2005 in all states.8The cause for concern in these statistics is that

being overweight or obese increases the risk of many diseases including: hypertension,

coronary heart disease, stroke, type two diabetes, sleep apnea, gallbladder disease, and

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