Benefits of Implementing Company Occupational Health Services

The rising rates for health insurance services are causing companies to take a hard look at strategies that can be used to reduce overall employee spending for healthcare. According to the National Conference of State Legislatures, in 2015 health insurance companies around the country noted a rate increase of 20 to 40 percent, a significant incline despite the presumption that rates would decrease under the Affordable Care Act. Now, companies must make necessary changes to reduce healthcare costs by addressing issues that directly impact the amount of money spent to insure employees.

Health insurance costs for companies have risen due to employee lifestyle factors, which include obesity, smoking, heart disease, diabetes and age-related illnesses. Each of these factors drive up insurance costs, employee absenteeism and worker compensation claims. To combat the costs, companies are encouraging a healthy work environment by implementing wellness programs. As of 2009, 92 percent of companies with 200 or more employees created workplace health and wellness programs to offset insurance costs. Over the last six years, this trend has only increased due to the proven benefits of starting a wellness program at work.

Impact of Employee Lifestyles and the Workplace

The influx of chronic disease in America has led to a drastic increase in the early onset of chronic diseases due to lifestyle habits, such as lack of activity and smoking. As these chronic diseases are occurring at younger ages than in the past, it has produced as shift in the economic burden related to insurance costs because those with the chronic illnesses are still participating in the labor market. Companies face a challenge as the chronic diseases result in illness-related loss of productivity among employees, absenteeism related to the illness and an increase in the cost of medical care.

The Centers for Disease Control and Prevention has identified four primary causes of chronic disease in the United States, known as “lifestyle diseases, ” which include inactivity, poor nutrition, tobacco use, and frequent alcohol consumption. These lifestyle diseases lead to chronic illnesses, such as diabetes, heart disease and chronic pulmonary conditions, accounting for severe disability in 25 million Americans and are the leading cause of death for roughly 1.7 million lives each year. In addition, the chronic illnesses are responsible for approximately 75 percent of national health expenditures. As the number of working adults with these chronic illnesses has increased by 25 percent in only 10 years to impact roughly 58 million people, employers are seeing a rise in illness-related loss of productivity due to sick days and a reduced workplace performance. Not to mention, healthcare costs for those with the chronic illnesses has drastically increased.

According to a 2008 PricewaterhouseCoopers survey, the indirect costs for absenteeism is approximately four times higher for individuals with chronic illnesses, which resulted in a cumulative cost of $1 trillion in 2003 compared to the $277 billion spent on direct healthcare expenditures. With Towers Watson and the National Business Group on Health (NBGH) reporting that 67 percent of employees are identified as having poor health habits, companies agree that maintaining affordable health coverage is one of the top three challenges they face.

To counter act the results of poor employee lifestyles, companies are promoting health and disease prevention in the workplace through occupational health services. Through workplace benefits, specific strategies are used to provide employees with interventions to encourage healthy behaviors. These initiatives have shown strong results to preventing and reducing chronic illnesses while limiting the growth of healthcare costs, improving employee retention rates, decreasing worker compensation claims and reducing employee absenteeism.

Occupational Health Services in the Workplace

The vision of an occupational health program places a particular focus on improving the workplace organization and working environment to encourage employee participation for healthier living. The growing appreciation for encouraging personal health in the workplace, such as offering fitness programs and help to stop smoking, provides a comprehensive approach for intervention to influence a healthy workforce. Adopting a healthy workplace involves establishing appropriate administrative procedures, such as drug testing and physical exams to assess and evaluate where intervention services can be used to promote employee health and job performance.

Offering occupational urgent care services to employees creates healthier and happier employees who are more productive, which in return leads to less absenteeism and reduced long-term healthcare costs. While there are various degrees of wellness programs companies offer, occupational health services strive to promote and maintain physical and mental wellness to create a healthy workplace culture.

Benefits to Occupational Health Services

Well-managed company occupational health programs provide employees with a positive caring company image, which not only improves the moral of staff but also increases employees’ self-esteem and reduces stress. This leads to higher job satisfaction, decreasing employee turnover and increasing workplace productivity levels. As employees benefit from a safe and healthy work environment, they have the increased skills needed to improve their health for an overall reduction of healthcare costs for both the employer and the employee.

The benefits of implementing occupational health services provide a diverse range of benefits, not just within the workplace but within the personal lives’ of employees and throughout the economy. Workplace health risks are higher in the informal sector and smaller industries, which is directly attributed to poverty. An occupational program allows workers to set goals to overcome family obstacles, such as poverty, to produce healthy families. Healthy families produce healthy workers, adding to the sustainability of a healthy workforce. This improvement in workforce aids employees in meeting job demands while reducing healthcare costs as health screenings are used to evaluate the functional capabilities of employees.

The Centers for Disease Control and Prevention reports a workplace health program can lead to 25 percent savings on each absenteeism, healthcare costs, worker compensation and disability management claim costs. By controlling worker compensation claim costs, there’s reduced absenteeism, decreased frequency and severity of claims and an increased workplace productivity.

According to a 2010 survey by Kaiser Family Foundation and the Health Research and Educational Trust, 44 percent of all companies offering wellness programs report they are effective in reducing healthcare costs. For larger firms with 200 or more employees, there’s a reported 81 percent effectiveness of wellness programs and a reported 69 percent reduction of healthcare costs.

The positive effects of implementing a wellness program is proven by Duke University. Duke University created a policy to assist employees with controlling high blood pressure and cholesterol. The policy produced a positive ROI of $1.21 per $1.00 spent for blood pressure and an ROI of $3.39 per $1.00 spent for cholesterol programs.

In addition to Duke University, Johnson & Johnson started a Health and Wellness Program featuring the long-term impact for controlling healthcare costs. They were able to decrease medical costs by approximately $225 per participating employee per year during a 4 year study. Their policy addressed environmental and educational components that increased the risks for high blood pressure and cholesterol. After the study, Johnson & Johnson found the wellness program produced a ROI of around 3 to 1 for both productivity and direct medical costs.

Chapman conducted a study of 56 cases pertaining to the benefits of occupational health services and found a 35 percent decrease in sick leave, health care plan costs, worker compensation and disability costs. From the study, Chapman found an average ROI for those included in the study was $5.81 per dollar spent.
Four studies by RAND Health evaluated the impact of wellness programs on workplace productivity and measured the cost of lost workdays. The results from all studies found an ROI of $15.60 per dollar spent, a savings of $1,350 per employee in short-term disability costs and a 0.1 percent risk reduction for sick days. In addition, $180 per employee per year was saved in healthcare costs.

To begin cutting healthcare costs and increasing a company’s bottom-line through healthier employees, implementing occupational health services is fairly simple.

Implementing a Healthy Workplace

Early detection and prevention for lifestyle factors that impact medical costs is essential for defending against illness in your workplace. Employers can address potential health issues through physical exams prior to employment and during employment, despite concerns for added costs to start occupational health services. With the help of government programs, occupational health services are affordable and convenient.

Under the Patient Protection and Affordable Care Act, provisions are offered to expand health promotion and prevention activities by offering a total of $200 million to wellness programs for start-up grants for businesses with fewer than 100 employees (Section 10408). In addition, the Centers for Disease Control and Prevention and the Department of Health and Human Services offer incentives for companies implementing occupational health services.

To implement the services, administrative and corporate support are necessary to create a comprehensive and strategic wellness team to focus on potential program participates. Using data that’s collected regarding employee health risks and intervention options, the wellness team drives health efforts to assess employees’ interests and risks. A carefully crafted operating plan with a strong mission statement featuring specific short-term and long-term goals will boost employee participation as they are able to benefit from interventions that address specific risk factors through the wellness program.

There are various wellness programs that can be offered both prior to employment and during employment to maintain a healthy workforce to lower insurance cost. Among the most common strategies companies choose are drug and alcohol testing and physical exams.

According to the National Institute on Drug Abuse, nearly 75 percent of all adult illicit drug users are employed, causing a high employee turnover late, absenteeism, decreased productivity and an increased risk for worker compensation claims for work-related injuries. Companies can use a 5-panel or 8-panel urine test to evaluate employees for commonly abused substances for both pre-employment and random testing to ensure employees aren’t intoxicated or under the influence to reduce these risks.

In addition to drug testing, physical exams allow companies to receive a comprehensive review of an individual’s health to address any limitations to physical activity to ensure they can carry out required job duties. Physical exams through occupational services are used to review an employee’s physical condition and how it relates to their ability to perform job duties. Diagnostic services, such as blood tests, urinalysis, x-rays, EKGs and treadmill stress tests determine if an employee has preexisting conditions that will increase healthcare costs, absenteeism or impact workplace productivity to allow for interventions to be used to reduce these risk factors.

Creating a Healthy Workforce

Employees and employers who understand the impact of wellness programs will positively influence the company and its bottom-line by reducing healthcare premiums, absenteeism and workers compensation costs. Implementing occupational health services requires a team approach with human resources and employees to develop comprehensive and customizable wellness packages. With a wide network of convenient options for healthcare needs, occupational wellness programs have achieved a high penetration in the U.S. As the cost of medical coverage continues to rise, occupational health services in the workplace is the affordable and convenient option to promote a healthy workforce to reduce healthcare costs.


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