Childress, Michael T.

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University of Kentucky

University of KentuckyUKnowledgeIssue Brief on Topics Affecting Kentucky’s Economy Center for Business and Economic Research10-2011Health & Wellness in the Business ContextMichael T. ChildressUniversity of Kentucky, michael.childress@uky.eduRight click to open a feedback form in a new tab to let us know how this document benefits you.Follow this and additional works at: https://uknowledge.uky.edu/cber_issuebriefsPart of the Economics Commons, and the Medicine and Health Sciences CommonsThis Brief is brought to you for free and open access by the Center for Business and Economic Research at UKnowledge. It has been accepted forinclusion in Issue Brief on Topics Affecting Kentucky’s Economy by an authorized administrator of UKnowledge. For more information, please contactUKnowledge@lsv.uky.edu.Repository CitationChildress, Michael T., "Health & Wellness in the Business Context" (2011). Issue Brief on Topics Affecting Kentucky’s Economy. 4.https://uknowledge.uky.edu/cber_issuebriefs/4Center for Business and Economic ResearchISSUE BRIEFon topics affecting Kentucky’s economyDr. Kenneth Troske, DirectorCBER335BA Gatton BuildingLexington, KY  40506-0034(859) 257-7675, (859) 257-7671 (FAX)http://cber.uky.eduHealth & Wellness in the Business ContextBy Michael Childress (michael.childress@uky.edu)An es  mated sixty percent of U.S. fi rms off er health benefi ts to their workers, with average annual premi-ums for employer-sponsored health insurance cos  ng $5,429 for single coverage and $15,073 for family coverage (Figure 1).1 Compared to 2010, premiums for single coverage are 8 percent higher while family coverage is 9 percent higher.2 At two-and-a-half  mes the OECD average, the U.S. spends more on health care than any other industrialized county, leading some to conclude that expanding health care costs are hur  ng U.S. global compe   veness.3 As health care costs con  nue to increase, so does interest in workplace wellness programs to improve health and contain costs. Common char-acteris  cs of wellness programs include weight loss programs, gym membership discounts or on-site exercise facili  es, smoking cessa  on programs, personal health coaching, classes in nutri  on or healthy living, web-based resources for healthy living, or a wellness newsle  er.4 States are responding with legisla  on to encourage wider adop  on of health and wellness programs.5 Research indicates that wellness programs are generally cost-eff ec  ve, with medical costs falling about $3.27 and absenteeism cost falling around $2.73 for every dollar spent.6 However, more research is necessary to determine if these returns on investment are appli-cable across a broad spectrum of fi rms. According to the Centers for Disease Control and Preven  on (CDC), more than 75 percent of health care costs are due to chronic condi  ons such as heart disease, cancer, stroke, diabetes, and arthri  s.7 Many pa  ents have mul  ple chronic condi  ons and their care costs up to seven  mes as much as those with one chronic condi  on.8 Much of the chronic disease is caused by four pre-ventable health risk behaviors—lack of exercise, poor nutri  on, smoking, and heavy alcohol consump  on.9 When compared to the U.S. as well as states that are widely consid-ered to be Kentucky’s compe  tors for economic development pros-pects,10 Kentuckians are more likely to smoke, be obese, and not engage in regular physical ac  vity—but are slightly less likely to be heavy drinkers (see Table 1). Over 62 percent of Kentuckians demonstrate at least one of these four behaviors that put them at risk of developing a chronic disease, compared to 57 percent for the compe   ve states and 54 percent for the United States (see Figure 2).11  OCTOBER 2011No. 2More organiza  ons and fi rms are turning to wellness programs to improve health and contain costs. Research indicates that wellness programs are cost-eff ec  ve.Chronic disease drives most health care costs and is generally preventable.Gatton College of Business and EconomicsUniversity of Kentucky$921$4,508$4,508$10,944$$2,000$4,000$6,000$8,000$10,000$12,000$14,000$16,000Single Coverage Family CoverageFIGURE 1Average Annual Firm and Worker PremiumContributions and Total Premiums for CoveredWorkers for Single and Family Coverage, 2011Employer ContributionWorker ContributionSource: Kaiser/HRET Survey of Employer Sponsored Health Benefits, 2011.$5,429$15,073TABLE 1Four Risk Behaviors that Contribute to Chronic Disease,U.S., Competitive States, and Kentucky, 2008 2010Adults, 18 and Older US (%) CS (%) KY (%)Current Smoker 17.9* 20.1* 25.2Obese 27.3* 29.1* 31.5Lack of Physical Activity 24.6* 26.3* 29.8Heavy Alcohol Consumption 5.1* 4.7 4.3Source: Authors’ analysis of data from Centers for Disease Control and Prevention (CDC),Behavioral Risk Factor Surveillance System Survey Data, Atlanta, Georgia: U.S. Department ofHealth and Human Services, Centers for Disease Control and Prevention, 2008 2010Note: The competitive states are AL, AR, FL, GA, IL, IN, LA, MI, MO, MS, NC, OH, SC, TN, VA, & WV.*These percentages are statistically different from the Kentucky percentages (alpha=.05).Increasingly fi rms are adop  ng wellness programs to facilitate healthy lifestyles among their employees. In Kentucky, where nearly one-quarter of adults exhibit mul  -ple chronic disease causing behaviors (see Figure 3), health and wellness programs among organiza  ons increased from 34% in 2007 to 63% in 2010.12 According to one recent survey, among fi rms off ering health benefi ts and wellness programs, 65% report these programs are eff ec  ve in improving the health of their employees and 53% be-lieve wellness programs are eff ec  ve in re-ducing their fi rm’s health care costs.13 Driven by persistently high smoking, grow-ing obesity, physical inac  vity, and increased alcohol consump  on,14 Kentucky faces many health challenges. Research suggests that wellness programs off er the poten  al to improve the health of ci  zens as well as the bo  om lines of businesses—espe-cially when wellness programs are embed-ded within an organiza  onal culture that promotes overall health and well-being.15 However, there are important unanswered ques  ons, such as whether the returns on investment experienced by large fi rms are applicable to small fi rms, what condi  ons aff ect how long it takes to recoup the ben-efi ts, and which facets of wellness programs are most important.16  While important case studies on Kentucky organiza  ons have re-vealed promising prac  ces for implement-ing eff ec  ve wellness programs,17  rigorous program evalua  on is necessary to deter-mine their cost-eff ec  veness across a range of program dimensions and characteris  cs.                                                                                                           ISSUE BRIEFOctober 2011No. 2An increasing number of organi-za  ons and fi rms are adop  ng wellness programs.Rigorous pro-gram evalua  on is necessary to determine the cost-eff ec  veness of wellness programs.NotesCenter for Business and Economic ResearchGATTON cOLLEGE OF bUSINESS AND eCONOMICSUNIVERSITY OF kENTUCKY1Employer Health Benefi ts, 2011 Summary of Findings, Kaiser Family Founda  on/Health Research & Educa  onal Trust, September 2011, online <h  p://ehbs.kff .org/pdf/8226.pdf>.2Ibid.3Toni Johnson, “Healthcare Costs and U.S. Compe   veness,” Council on Foreign Rela  ons, March 23, 2010, online at <www.cfr.org>.4Employer Health Benefi ts, 2011 Annual Survey, Kaiser Family Founda  on/Health Research & Educa  onal Trust, September 2011, online <h  p://ehbs.kff .org>, p. 189.5State Wellness Legisla  on, 2006-2010, Na  onal Conference of State Legislatures, July 2010, online <h  p://www.ncsl.org/?TabId=13826>.6Katherine Baicker, David Cutler, and Zirui Song, “Workplace Wellness Programs Can Generate Savings,” Health Aff airs 29, No. 2 (2010).7Chronic Disease, Centers for Disease Control and Preven  on (CDC), online <h  p://www.cdc.gov/chronicdisease/resources/publica  ons/AAG/chronic.htm>.8Mark W. Stanton, The High Concentra  on of U.S. Health Care Expenditures, Agency for Healthcare Research and Quality (AHRQ), Issue 19 (June 2006), online <h  p://www.ahrq.gov/research/ria19/expendria.htm>.9CDC, online <h  p://www.cdc.gov/Features/LiveLonger/?source=govdelivery>. Also see Ford ES, Zhao G, Tsai J, Li C. “Low-risk lifestyle behav-iors and all-cause mortality: Findings from the Na  onal Health and Nutri  on Examina  on Survey III Mortality Study,” American Journal of Public Health, published online ahead of print August 18, 2011.10The compe   ve states are AL, AR, FL, GA, IL, IN, LA, MI, MO, MS, NC, OH, SC, TN, VA, & WV.11Kentucky’s es  mate is sta  s  cally diff erent from the compe   ve states and the U.S. (p<.05).12Jennifer Swanberg, et al., Crea  ng Healthy Organiza  ons: Promising Prac  ces in Kentucky, University of Kentucky Ins  tute for Workplace Innova  ons, October 2011, p. 8.13Employer Health Benefi ts, 2011 Annual Survey, p. 190-1.14See the appendix for graphs.15Swanberg, et al., Crea  ng Healthy Organiza  ons.16 Baicker, et al., “Workplace Wellness Programs Can Generate Savings,” pp. 5-7.17Swanberg, et al., Crea  ng Healthy Organiza  ons.0%10%20%30%40%50%60%70%PercentofAdults(3YearMovingAverage)FIGURE 2At Risk for Chronic Disease,*US, KY, and Competitive States (CS), 2001 2010KYCSUS*Demonstrates at least one of the at risk behaviors for developing chronic disease:smoking, obesity, physical inactivity, or heavy alcohol consumption.Source: Author's analysis of Behavioral Risk Factor Surveillance System dataNone, 38%One, 38%Two, 20%Three, 4% Four, 0.17%FIGURE 3Percent of Kentucky Adults by Number of ChronicDisease Risk Behaviors, 2008 2010Source: Author's analysis of Behavioral Risk Factor Surveillance System data1 | P a g e  CENTER FOR BUSINESS AND ECONOMICS RESEARCH GATTON COLLEGE OF BUSINESS AND ECONOMICS UNIVERSITY OF KENTUCKY Appendix Issue Brief No. 2 “Health & Wellness in the Business Context”     CDC BRFSS calculated variable that defines a “current smoker” (2010 BRFSS: _SMOKER3)     CDC BRFSS calculated variable that defines “obesity” (2010 BRFSS: _BMI4CAT) 0%5%10%15%20%25%30%35%40%1984‐861985‐871986‐881987‐891988‐901989‐911990‐921991‐931992‐941993‐951994‐961995‐971996‐981997‐991998‐001999‐012000‐022001‐032002‐042003‐052004‐062005‐072006‐082007‐092008‐10Percent of Adults(3‐Year Moving Average)FIGURE A.1Current Smoking Rates in the US, KY, and Competitive States, 1984‐2010KYCSUSSource: Author's analysis of Behavioral Risk Ractor Surveillance System data, various years0%5%10%15%20%25%30%35%1984‐861985‐871986‐881987‐891988‐901989‐911990‐921991‐931992‐941993‐951994‐961995‐971996‐981997‐991998‐001999‐012000‐022001‐032002‐042003‐052004‐062005‐072006‐082007‐092008‐10Percent of Adults(3‐Year Moving Average)FIGURE A.2Obesity Rates in the US, KY, and Competitive States, 1984‐2010KYCSUSSource: Author's analysis of Behavioral Risk Ractor Surveillance System data, various years2 | P a g e  CENTER FOR BUSINESS AND ECONOMICS RESEARCH GATTON COLLEGE OF BUSINESS AND ECONOMICS UNIVERSITY OF KENTUCKY    During  the  past  month,  other  than  your  regular  job,  did  you  participate  in  any  physical activities or exercises such as running, calisthenics, golf, gardening, or walking for exercise? (2010 BRFSS: EXERANY2)     CDC BRFSS calculated variable that defines “heavy alcohol consumption” — Heavy drinkers (adult men having more than two drinks per day and adult women having more than one drink per day)   (2010 BRFSS: _RFDRHV3)  0%5%10%15%20%25%30%35%40%2000‐02 2001‐03 2002‐04 2003‐05 2004‐06 2005‐07 2006‐08 2007‐09 2008‐10Percent of Adults(3‐Year Moving Average)FIGURE A.3Lacking Physical Activity in the US, KY, and Competitive States, 2000‐2010KYCSUSSource: Author's analysis of Behavioral Risk Ractor Surveillance System data, various years0.0%1.0%2.0%3.0%4.0%5.0%6.0%2001‐03 2002‐04 2003‐05 2004‐06 2005‐07 2006‐08 2007‐09 2008‐10Percent of Adults(3‐Year Moving Average)FIGURE A.4Heavy Drinkers in the US, KY, and Competitive States, 2001‐2010KYCSUSSource: Author's analysis of Behavioral Risk Ractor Surveillance System data, various years

Health & Wellness in the Business Context

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