How Promotion Can Reduce Your Insurance Costs
Houston, we have a problem. Well, it’s not just Houston. Companies everywhere are concerned about rising insurance costs. The annual price tag on occupational injuries is $250 billion, according to a recent study by University of California-Davis. This is actually substantially higher than the indirect costs of illnesses such as cancer, diabetes, and stroke. A single work-related injury has an average direct cost of $38,000, as calculated by the National Safety Council. But indirect costs dwarf this number, amounting to about four times as much. Indirect costs include administrative time, increased insurance premiums, hiring a replacement, unwanted media attention, and negative publicity among both employees and customers.
This brings the total average cost of an injury to $190,000. For a business operating at a 10-percent net profit margin, the company will need $1.9 million in new revenue in order to offset the loss of just one work-related injury. No wonder there is so much interest in developing safety programs that include incentives for safer behaviors in the workplace! The price tag for such programs is much lower.
A Gallup poll estimates that 86 percent of employees are above their ideal weight, which causes them to miss 450 million days of work per year compared to workers at their ideal weight. The cost of overweight workers alone to American businesses is estimated to be between $150 and $225 billion in lost productivity. And that's just a single risk factor. Add in the cost of smoking, excessive alcohol and drug use, sedentary lifestyles and other poor lifestyle choices, and the costs are staggering. Consequently, employers pay higher health care premiums for workers who make these life choices. Combined, the cost to American businesses may exceed half a trillion dollars.
Katherine Baicker, professor of health economics at Harvard University, reports that medical costs fall by $3.27 for every $1.00 spent on wellness programs, and that absenteeism costs fall by about $2.73 for every $1.00 spent. She concludes that, based on her findings, wider adoption of disease prevention and wellness programs could prove beneficial for budgets and productivity as well as healthier lives for employees.
Safety and wellness program objectives are best met by rewarding the right behaviors. Here are some of the ways that promotional products can be used:
- To promote the program
- To maintain interest in the program
- To provide a sense of ownership and participation among participants
- To provide a reward for positive behavioral changes
- To create a sense of peer affiliation with a cause.
As an example of how this might all play out, Banner Health recently put together a program called “ECHO” — Employees Choosing Healthy Options. To start the program, embroidered t-shirts were given to all employees who filled out a personal health profile. Comprised of a series of seminars and health screenings, the program awarded employees with a stamp for each event they attended. When they acquired enough stamps, they received fitness-related incentives such as sunscreen, sweat bands, digital runners’ watches, motivational journals to record their progress, and safety strobe lights. After reaching the first level of the promotion, employees who continued to participate chose incentive premiums from $35, $50, and $75 categories. Individuals participating in smoking cessations classes received imprinted rubber wristbands they could snap to remind themselves not to smoke. Imprinted bubbly bottles were also distributed during stress management seminars. Although “ECHO” is strictly a volunteer program, 5100 emplyees actively participated. Two years after its launch, the program is still active in 23 facilities.
How might this play out with your organization? If you’d like to find out, give us a call at APTCO.