If companies are required to disclose their impact on the environment, shouldn’t they also have to disclose their impact on employee health? One group of prominent insurers, pharmaceutical companies and employers is proposing that publicly traded corporations report on the health of their workforces in annual reports, 10-Ks, sustainability reports and other SEC documents. Could this happen? Does it make sense? Will it help or hurt employers? What would be the impact on employees?
The cost of healthcare is having a major impact on business and its bottom line. Employer-sponsored insurance covers over half of the non-elderly population, or 147 million people in total, according to Kaiser Family Foundation data. The average annual premium for employer-sponsored family health coverage is now $17,545, with employers footing the bill for more than two-thirds of that amount, according to the Kaiser Family Foundation/Health Research & Education Trust 2015 Employer Health Benefits Survey. Employers have a lot of skin in the game when it comes to their employees’ health.
And they should, because employees are considered a company’s greatest asset. Employee health issues can dramatically affect workplace productivity and costs. The catalysts can range from chronic disease and stress-related illnesses to minor health conditions, many stemming from poor diet and lack of exercise. Unhealthy employees have greater absenteeism and higher healthcare costs. This has been quantified in recent reports, measuring the cost of unwellness in the workplace as high as $2.2 trillion per year. Employers end up bearing the burden in higher premiums and in lower output. Health is central to sustainable business and has a strong positive correlation to financial performance. Investors have a right to know about a healthy — or unhealthy — workforce, as it affects the bottom line.
From the employees’ perspective, workers overwhelmingly want help from their employers to manage their health. Given that one out of two Americans suffer from a chronic condition, it’s no surprise that 71% of consumers say they want help from their companies in the form of programs and guidelines for health management. The majority also want help in setting health goals and getting reminders and updates on their health progress.
So employers want healthier workers, and workers want help from their employers to become healthier. Companies are aiming to fill this gap with wellness programs. Almost 80% of employers are offering wellness and health improvement programs, spending on average $693 per worker, according to a survey by Fidelity Investments and the National Business Group on Health. Employers are investing more than ever in the health of their population. The question is — what’s the ROI? Wellness programs are another line item on the healthcare portion of the balance sheet. As healthcare costs continue to escalate and an $8 billion corporate wellness market emerges, shareholders will expect greater accountability for health spending. And the most accurate measure is the state of a population’s health.
If population health outcomes are put in the spotlight, shareholders and executives will have clear visibility into whether their investments are paying off. What’s more, transparency in population health will elevate health improvement as a business priority. When companies began reporting on sustainability 30+ years ago, they made measurable improvements to their environmental and social footprints.
Quote"Employees are the beneficiaries of health and wellness subsidies — and they shouldn’t squander them."
However, companies aren’t the only ones who stand to benefit from improved health — nor should they be the only ones held accountable for it. Employees are the beneficiaries of health and wellness subsidies — and they shouldn’t squander them. Because their healthcare bill is rising seven times faster than their wages, they should be highly motivated to proactively manage their health.
And, employee engagement in health does pay off; 46% of consumers with a chronic condition discovered it through their wellness program. Seventy-three percent of wellness program members with diabetes and 79% of members with heart disease say their wellness program helps them manage their healthcare costs, according to HealthMine data.
Shining a regulatory spotlight on population health can lead to a greater focus on the well-being of workers. That focus can, in turn, drive greater employee engagement in health. And a healthier workforce is a win-win-win — for employees, employers and investors.
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