A Fun, Turnkey

Wellness Program

Can a wellness program actually reduce healthcare claims at your company?

We think it can, but only with measurable behavior change in the small subset of the
population facing the highest-risk for chronic disease. Read more to see what we mean.
After reading this, you should understand:
1. How much healthcare spending is growing
2. What are the drivers for these growing costs
3. The extreme concentration of costs in high-risk individuals
4. The economic value of physical activity

1.
Growth of Healthcare Spending
Total healthcare spending in the United States is growing at
approximately 6% annually.[1] This is about 3% above
inflation, meaning that many businesses face a distinct threat to
their viability due to these growing costs. Some are choosing
to reduce the benefits they offer, while others are looking for
different solutions, such as wellness programs.
[1] http://www.cms.gov/Research-Statistics-Data-and-Systems/StatisticsTrends-and-Reports/NationalHealthExpendData/downloads/proj2012.pdf

2.
Cost Drivers
What is causing healthcare spending to grow? 75% of the $2 trillion
spent on medical care in 2009 went towards care for chronic
diseases, such as hypertension, heart disease, and cancer.[2] While
weve made advances in treating these diseases and reducing
mortality rates,[3] the cost of treating each case has gone up with
the use of more technologies and services.[4]
[2]
http://www.cdc.gov/workplacehealthpromotion/businesscase/reasons/rising.html
[3] https://www.heart.org/idc/groups/heartpublic/@wcm/@sop/@smd/documents/downloadable/ucm_449847.pdf
[4] http://www.cdc.gov/nchs/data/hus/2013/113.pdf

A Fun, Turnkey
Wellness Program

3.
Concentration of Risk
Here is the root of the problem and the reason most wellness programs fail to address
healthcare costs: 5% of the population creates 50% of the healthcare expenditures
annually. This small subset of individuals spends approximately $40,000 per year to treat
chronic disease events like a heart attack, late stage cancer, or stroke, while the majority of
individuals only spend $300 per year for a regular check-up.[5] The risk-factors for being
part of this small, high-cost group are unfortunately clear: being over 45 years old,[5] and
having a Body Mass Index above 25.[6]

[5] http://www.nihcm.org/pdf/DataBrief3%20Final.pdf
[6] http://www.ncbi.nlm.nih.gov/pubmed/16376700

4.
Economic Value of Physical
Activity
When we started researching wellness, we asked ourselves,
What is the dollar value of 30 minutes of physical activity
depending on your age, gender, and body mass index? Our
model showed that a small group of people creates the
greatest direct medical cost savings when they exercise.
These are men over 45 years old with a BMI above 25.
When such a man does 30 minutes of aerobic activity it
creates an estimated $1.57 in direct medical cost
reduction. This is 26 times the cost reduction seen in the
same man at age 25 and still 2.3X for a similar woman at 45.

Conclusion: Measuring Success

So, can a wellness program focused on physical activity reduce healthcare claims
costs? Our answer is nuanced: yes, but only if you motivate the highest-risk
individuals to be physically active on a regular basis. For this reason, we measure
success by how many individuals over 45 with a BMI over 25 track 150 min of
physical activity per week. This is the amount of physical activity recommended by
the American Heart Association. While this is only a proxy measure for healthcare
claims cost reduction, we believe it is the best indicator available.