Wellness Programs Reduce Medical Costs, Increase Productivity, and Reduce Absenteeism

In 2012, roughly two-thirds of manufacturing and distribution industry employers experienced increases to their medical insurance premiums, according to the 2012 Compensation Data Manufacturing & Distribution survey results. The average increase reported by these organizations was 10.2 percent, down from 11 percent reported in 2011. Despite the drop in the average premium increase, manufacturing and distribution organizations still contribute 10.5 percent of their total payroll costs toward providing medical insurance to their employees. Employers everywhere are looking for ways to curtail rising healthcare costs and as a result, many are turning to wellness programs.

For years, wellness programs have consisted of traditional options such as weight management, tobacco cessation programs or offering flu shots and immunizations. But over the last few years, some wellness options have shown a more accelerated rate of use. Biometric screenings, which measure an individual’s blood pressure, body mass index (BMI), cholesterol and blood glucose in an effort to identify risk factors, are a good example of this trend. In 2009, biometric screenings were offered at only 17.4 percent of manufacturing and distribution organizations surveyed, compared to 44.2 percent in 2012. Physical fitness facility access, on-site health clinics and offering rewards and incentives have also increased over the last few years.

“The upshot of a well-executed wellness program does not lie just with reduced medical costs,” said Amy Kaminski, director of marketing for Compdata Surveys. “Many employers are experiencing a positive impact on their bottom line as a result of greater employee productivity and reduced absenteeism.”

Other methods used by manufacturing and distribution employers to reduce and contain costs include using a network of healthcare professionals at 78.8 percent, increasing the employee portion of the premium at 60.5 percent and offering disease management at 64.8 percent. Nearly twelve percent of manufacturing and distribution organizations report a surcharge for enrolling an employee’s spouse on their medical plan, if the employee’s spouse is eligible for benefits under their employer’s own plan.