Prior research, according to StayWell Health Management and Towers Watson, demonstrated that employers can break even on wellness and preventive care initiatives within two years and achieve up to a 3:1 return on investment in three. Now a new study from the two groups says that costs savings associated with health risk reduction begin to accumulate in as little as one year, especially for those with chronic conditions.
Towers Watson and StayWell claim that their new research indicates the prevention of health risks such as smoking or obesity can lead to even greater cost reduction than eliminating those health risks from a workforce. For every health risk added, they say, costs increase by 45% above the cost savings that resulted from eliminating a risk, the latest in a string of victories for preventive care.
“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,” says 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.”
In the study, 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 than those without. There will always be a highest-cost group, the study’s authors emphasized, but an ongoing focus on prevention can both limit the severity of chronic illness and in many cases, prevent it altogether.
“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,” says 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.”
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