Reducing Insurance Costs Through Promotions
The annual price tag on occupational injuries and illnesses is a staggering $250 billion, according to a study by the University of California Davis. The National Safety Council states that the average work-related injury incurs a direct cost of $38,000. Direct costs include ER visits, doctor visits, medical bills, medications, and rehab. However, indirect costs can amount to four times this amount. These include administrative time, increases in insurance costs, replacing the employee’s lost hours, hiring a replacement, unwanted media attention, and negative publicity among employees and customers.
This means that the cost of a typical injury soars to $190,000. For a business operating at a 10-percent profit margin, it will require $1.9 million in new revenue to offset the loss from one work-related injury. It’s far better for businesses to invest in a safety program designed to reduce and prevent injuries on the job.
A Gallup poll reveals that 86% of employees are above their ideal weight, causing them to miss 450 million days of work per year, compared to employees at their ideal weight. The cost of overweight workers to American businesses is estimated to be between $150 and $225 billion in lost productivity. Add to this the cost of smoking, excessive alcohol and drug use, sedentary lifestyles and other poor lifestyle choices, and the costs are huge. Employers pay higher health care premiums for workers who make these lifestyle choices.
According to a Harvard University study, medical costs fall by $3.27 for every dollar spent on wellness programs. In addition, absenteeism costs drop by $2.37 for every dollar spent. How’s that for return on investment? A well-designed safety or wellness program includes promotional products that serve these functions:
- Promote the program
- Maintain interest in the program
- Provide a sense of ownershop and participation among participants
- Provide a reward for positive behavioral changes
- Create a sense of peer affiliation with a cause
A Texas school district announced a wellness program last year that encouraged employees to walk 90 miles over a five month period. In addition to walking and jogging, organized activities included smoking cessation classes and aerobics. As incentives to join and continue in the program, various promotional products were awarded to employees as they completed various activities. Displaying the slogan, “Enjoy Life. . . Be Well,” the items included sports bottles, nutrition booklets, golf towels, and insulated lunch bags. Participation in the program was double the original projection.
Banner Health, a large private healthcare system, made education and awareness a large component in their wellness program. It began with asking employees to fill out a personal health profile, and they were given an embroidered T-shirt when they completed it. The program was titled ECHO — Employees Choosing Healthy Options. Continuing the emphasis on education, employees were awarded for each seminar or screening they completed. The incentives included fitness-related items such as sunscreen, sweat bands, digital runners’ watches, motivational journals, and safety strobe lights. Value of the premiums increased as employees reached various benchmarks, reaching $35–75 categories. The program is not without pain — participants in smoking cessation classes received imprinted rubber wristbands they were encouraged to snap every time they are tempted to smoke. Although ECHO is a voluntary program, over 5,000 people signed up, and it is still rolling along more than two years after its inception. Obviously the company is reaping benefits that far exceed its cost.
Isn't it about time your company took some steps to reduce your health insurance costs? A wellness or safety program may be just the thing.