THE NEED FOR WELLNESS

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The cost of unhealthy lifestyle choices

It is widely accepted that healthcare costs in the U.S. have surpassed sustainable levels. Over 16% of our gross domestic product is currently spent on health care, and estimates suggest it will climb to 20% in the near term. It is not uncommon for Fortune 500 companies to spend more on health care in a year than they earn in company profits.

The Center for Disease Control and Prevention estimates that the medical care costs of people with chronic diseases account for more than 75% of the nation’s $2.3 trillion medical care costs. A rich body of evidence exists that attributes the increasing burden of chronic disease to lifestyle factors such as smoking, poor eating habits and physical inactivity. Health insurance premiums are at unacceptably high levels—in large part because of poor lifestyle choices leading to costly medical interventions required to treat avoidable illness.

Today, employers are bearing the full costs of the poor lifestyle choices made by their employees, and absenteeism, presenteeism and disability benefits only add to employers’ direct and indirect costs.

Once employers accept the link between poor lifestyle choices and health and productivity costs, it becomes clear that employees should be made active partners in bringing down healthcare costs.

Over the last 20 years, U.S. businesses years have adopted a variety of techniques and programs aimed at controlling medical care costs: managed care, disease management, and consumer driven healthcare have been touted, one after the other, as “cures” for our healthcare cost increase ills. Despite the clear and compelling arguments made for the effectiveness of these and other programs, they have all failed to meet the initial high expectations for their success. Among the reasons:

1. Most interventions largely ignore behavioral economic theory. They tend to be disconnected from people’s daily lives, and don’t show enough recognition of the reasons why people find unhealthy lifestyles easier and more appealing. Behavioral economics teaches us (a) that people tend to underestimate their own health risks, and (b) that individuals attach greater value to present benefits than future promises. This explains why people don’t always do things that they know are good for them and are therefore unlikely to bring about a meaningful change in lifestyle behavior.
2. They typically do not link into other components of healthcare management, such as disease management programs.
3. Since they tend to consist of a series of separate interventions, they are difficult to scale across a broad population.

As the concept of wellness programs has matured, however, it has undergone a number of developmental changes. Trends include:

• Identification of a broad range of lifestyle health risk factors and their links to chronic diseases;
• Improved understanding of the links between healthy lifestyles and direct and indirect medical costs;
• Development of wellness programs that focus on a range of lifestyle risk factors, rather than a single risk factor;
• Recognition of the importance of health behavior psychology in driving appropriate behavior change; and
• A growing focus on developing business models that can demonstrate effective health behavior change and ROI to businesses adopting wellness programs.

The Vitality Group recognizes the need to effect positive changes in our members’ lifestyles by helping them to reduce their health risk factors, while delivering the program at a cost that will generate a meaningful ROI for the employer. We also understand that changing behavior is difficult. It requires individualized support for each member based on their own health risk profile.

Vitality™, our proprietary health enhancement solution, has been tested and refined internationally, across more than a decade. The program utilizes sophisticated health behavior change models supported by an actuarially-sound incentive program.

We invite you to learn more about this unique approach to behavior change and how Vitality can reduce healthcare costs and improve your company’s or your health plan’s bottom line.

For a personalized presentation, please contact us today.