There seems to remain a division of opinion over whether maintaining and improving employees’ health should be a perk reserved for a few, or a policy applying to all.  There are financial grounds for both opinions, depending on which financial consequences employers look at.  In general, the more carefully employers look when considering such consequences, with the possible exception of employers who do not view employees as anything but costs, the more the policy view seems justified.

The Perk Approach

It has long been and continues to be the case in many organizations that special health-related perks are reviewed for executives and key professionals, rather than made available to the workforce as a whole.  Executive health programs, for example, where organizations’ MVEs (Most Valuable Employees) receive from a day to a week of health assessment and counseling, at costs to the employer of from a few to ten thousand dollars or more, have long been offered by prestigious hospitals and academic medical centers.

Such investments by employers may also be justified on direct financial grounds.  Assuming that MVEs are truly worth the kinds of compensation they typically command, making or keeping them healthier can increase the number of days they spend on the job, and their performance while at work.  One study, for example, found that executives participating in such programs had 45% fewer absence days compared to those not participating. [N. Santelmann “How The Wealthy Get Healthy” Forbes.com July 21, 2004]

Gradually, the executive health idea has moved beyond an annual “spa” visit and begun to include ongoing health coaching.  Duke University Medical School, for example, is one of the academic medical centers that includes packages of ongoing phone coaching for up to six months after visits to one of its many health center programs.  St. Helena (CA) Hospital offers a one-day program, but also a one-year follow-up monitoring and coaching program for added payment.

Perhaps the most continuous executive health program is that offered by the MDVIP organization through its roughly 150 physicians in 16 states.   It offers what it calls “The 365 Day Executive Physical”, which is based on a personalized wellness plan for each MVE participating.  By reducing hospitalizations and sickness-related absences by as little as ten days a year, employers can recover their full investment in this continuous approach to health management.

The Policy Option

For employers who feel that all their full-time employees are valuable enough, employee health management (EHM) for all can make sense.  The costs of such programs will rarely if ever approach the investments usually made in executive health, but there are grounds to invest a fair amount of money, given the potential returns.  The key, however, is to address the full scope of “health” that affects employees, and the full scope of the effects of managing it well.

When health is defined to include not just the management of high-cost chronic diseases, which may warrant targeting only a small portion of the workforce, but risky behaviors and conditions, along with the stress and negative health effects of working conditions themselves, employers are finding plenty of effects.  These include reducing medical/hospital costs, but go on to encompass workers compensation and disability costs, absences and reduced performance at work.  Many employers have found reduced turnover and improved revenue effects as well.

In the UK, for example, since the government’s National Health Service covers care for all employees, employers often used private medical insurance as a perk to help in recruiting and retaining MVEs only.  But when they realized how much EHM can affect both their labor costs and overall revenue, they began adding programs for all workers.  The Standard Healthcare Insurance Co. for example, credited its EHM efforts at least partly with increasing its revenue by 51% over three years, along with cutting its staff turnover by half.  [“Standard Life Healthcare” Vielife Case Study 2006]

It is pretty much a matter of economics as to whether it makes financial sense for employers to offer some kind of EHM program to all employees, rather than a select few.  Depending on the risk-reward potential of each employee, given each’s health status and risks, along with each’s current levels of productivity and performance, i.e. of each’s value to the firm, and depending on the cost of EHM interventions that can work with each it is likely that employers or the providers they hire to operate the EHM program, can match the costs to the return potential for practically all employees.

This fact is also being recognized by EHM providers. Where many had only one “solution” and one cost for employers, most have either merged or contracted with other providers to expand their range of solutions, both regarding which problems will be solved, and what kinds and costs of interventions will be applied in which cases.  By tailoring the type and costs of interventions to the type and value of returns expected from each employee, a full range of options can become good investments, with almost all employees enjoying some health benefits, along with incentives and rewards, themselves.