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Written by Matt Bolch
Monday, 31 August 2009
Still not convinced a wellness program can save your company money? The Klipsch Group saved more than $2.5 million in four years. The year before implementing a wellness program, Klipsch Group, Inc. paid $1 million more in medical claims from its self-funded program than it received in premiums from employees. “Even after paying for the wellness program, we saved at least $300,000 from fewer claims, which is a swing of $1.3 million in just one year,” said Steve Klipsch, senior vice president of organizational strategies and administration at the Indianapolis-based maker of premium quality audio products. “The number of major cases like cancer and heart attacks was about the same. The difference was in the reduction of ER visits and usage of drug benefits,” he said. The company has been using just 70% of collected premiums to pay for medical care, which resulted in the freezing of premiums for the past three years and the occasional premium holiday for employees. Between 2003 and 2007, the company saved a total of $2.61 million. Klipsch admitted that the need to do something to stem losses in the self-funded health plan prompted the company’s move to a wellness program, but he’s adamant that unless employees stood to benefit, he would have tried something else. “The number of sick days that employees take has gone down, but, more important, wellness has become a big morale booster,” said Klipsch. “Sure, the program is saving us money, but as important is the culture improvement that increases productivity and loyalty to the company.” Sun salutations Wellness starts with a twice-yearly health survey of employees by ProMotion, which operates the Klipsch wellness program, including staffing the company gym and running the weekly workout classes, which include spinning, boxing, yoga, kick boxing, and Pilates. Employees receive incentives for participating, and any concerns uncovered are addressed directly with the employee. Klipsch executives do not know the survey results. The company has an on-site gym with cardio equipment, free weights, and machine weights, and it opened a second room in 2007 for spinning, stretching, and yoga classes. Formerly, Klipsch charged $8.50 a month to use the gym as a way to secure employee buy-in, but that fee was recently rescinded as an additional company benefit. ProMotion stages six to eight larger events a year, such as healthy cooking courses and ride-your-bike-to-work days. In an annual benefits and employee satisfaction survey, the wellness program ranks among the top four most-valued benefits, Klipsch noted. “Companies worry about the cancers and the heart attacks, which you need to worry about, but they’re not really controllable,” said Klipsch. “You can control the other stuff (the ER visits, the prescriptions, and the missing work), and those things add up quicker.” Here’s to your health The corporate world has finally begun to realize the value that wellness programs offer to reduce the incidence of medical claims while creating happier, healthier workers. MetLife’s Sixth Annual Employee Benefits Trend Survey showed that 57% of companies with 500 or more employees offer a wellness program, an increase from 49% in the previous year’s survey. “Many companies recognize that incentives, smartly executed, will drive positive behaviors,” said Dr. Ron Leopold, vice president of MetLife Institutional Business. “Employers are recognizing that health insurance is not necessarily health assurance.” Comparing employers that offer wellness programs with those that do not reveals the strength of such programs as a retention and loyalty tool. Companies with benefits including a wellness program consider it an important retention tool (70% versus 50% of those without a wellness benefit), feel the benefits offered are better than competitors’ or best in the industry (65% versus 42%), and believe the benefits program is an important reason why employees are attracted to their companies (51% versus 22%). “Offering a wellness benefit is a true win-win for the employer and the worker,” Leopold said. “Companies can offset future healthcare costs, and a healthier workforce has less absenteeism.” BankPlus, a Ridgeland, Mich.-based financial services company with 64 locations and more than 750 employees, has achieved a five-year return on investment of $3 for every $1 spent on wellness programming and health benefits. During the same period, the company experienced a 21% drop in major diagnoses and a 19% decrease in physician and hospital usage while garnering accolades as a Best Place to Work in Mississippi for three straight years, said Elynn Fish, director of the company’s WellnessPlus program. “We know that our healthiest employees are also the most productive based on performance reviews,” said Fish, who noted that demographic data and job reviews were independently analyzed by a researcher at Wake Forest University. During a time when national healthcare costs increased by 34% and 38% in Mississippi (2003 to 2007), BankPlus costs went up only 9%. The same five-year period saw BankPlus grow total assets by 73%, net income by 50%, and stockholder return by 39%, dispelling any notion that wellness programs don’t return significant benefits. Wellness for each employee begins with an annual physical and a health risk assessment (HRA) from BankPlus vendor BioSignia, which provides reports to employers and tracks results over the long term. In 2008, BankPlus began paying 100% of worker health benefits premiums and 20% of dependents’ premiums for employees who have an annual physical, take the HRA and participate in a Webinar that explains the results, remain tobacco-free for the past 12 months, and participate in employee wellness programming on activities and nutrition. The company allows for a paid day for the physical and pays for the exam and any recommended screenings based on age, sex, and health risk categories. As of late 2007, BankPlus had 100% employee participation in HRAs, Fish noted. “To conduct an effective program, you have to have executive buy-in,” Fish said. “For us, because the CEO experienced symptoms of a chronic disease and turned his life around, it’s built into our culture. Everyone in management supports the program, and it’s part of our mission statement.” Matt Bolch, This e-mail address is being protected from spam bots, you need JavaScript enabled to view it , is a freelance writer based in Atlanta.

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