Employees' poor health takes an enormous toll on the fiscal
health of American business. From spring 2004 to spring 2005,
health insurance premiums rose an average of 9.2 percent for almost
every market segment and company size, ranging from mom-and-pop
businesses to corporate giants. Since 2000, premiums for family
coverage have increased by 73 percent, compared with general
inflation of 14 percent and wage growth of 15 percent.
Well-designed and well-executed health promotion programs can
pay for themselves by reducing health risk factors and improving
health and productivity.
In 2002, Johnson and Johnson published the results of the first
long-term evaluation of the financial and health impact of a
large-scale corporate health and wellness program. Savings came
from reductions in hospital admissions, mental health visits, and
outpatient services. Savings grew over time, and most came in the
third or fourth year after program inception. The bottom line: $225
saved per employee per year. And the results are getting better.
The average cost-benefit ratio has increased from 1:3 for earlier
programs to 1:6 today.
Tobacco and Obesity
Heart disease, cancer, and stroke may be the most common causes
listed on death certificates. The worst real killers, though, are
tobacco, poor diet, and lack of exercise.
Tobacco use is the major cause of preventable death in Texas and
the United States, with more than 400,000 related deaths each year.
Annual medical and economic costs attributable to active smoking in
the United States are $150 billion, according to the Centers for
Disease Control and Prevention (2002). The annual costs of excess
medical care, mortality, and morbidity caused by secondhand
exposure to tobacco smoke exceed $10 billion.
More than 61 percent of Texas adults and 35 percent of Texas
school-age children are considered overweight or obese.
The obesity epidemic hurts our schools and workplaces through
absenteeism and lost productivity. An average-size school district
could lose $95,000 in state aid per year due to the rate of
absenteeism among overweight students.
At least half of worksite health care costs are driven by
lifestyle-related behaviors, such as smoking, poor diet, and lack
In all, an estimated $10 billion is spent annually on health care
in Texas due to obesity; by 2040, that cost is projected to reach
Vaccines are among the greatest public health measures we have,
particularly against life-threatening diseases in children. The
direct and indirect savings of commonly used vaccines range from $2
to $24 per dollar invested, according to the National Immunization
Program, Centers for Disease Control and Prevention (2004).
According to the Texas Department of State Health Services,
pertussis (whooping cough) has killed more than 26 Texans since
1999, mostly infants too young to have received the vaccine; six of
those were babies who died in the first nine months of 2005. The
World Health Organization estimates that the annual cost of
influenza epidemics to the U.S. economy is $71 billion to $167
Texas is currently 48th in the nation in childhood immunization
Part of the reason for this dismal performance is that physicians
and health officials have no way of knowing which children have
been immunized. Additionally, recent media coverage questioning
vaccine safety has made parents fearful of immunizing their
children. Confusion resulting from changes in the recommended
immunization schedule also has contributed. In recent years,
sporadic vaccine shortages have compounded the problem.
Physicians face steep financial disincentives to provide
immunizations. Reimbursement is inadequate. The total cost of
administering vaccines, per shot, is $10.67 for pediatric practices
and $7.57 for family practices.
The current reimbursement rate in Texas for vaccine administration
is $5. Newly recommended vaccines have become increasingly
expensive. Physicians must purchase those vaccines for people who
do not qualify for the Vaccines for Children program and for those
whose health plans do not cover the immunizations.
Mental Health and Alcohol and Substance Abuse
According to the National Institute of Mental Health, untreated
mental illness costs the United States $300 billion each year;
untreated depression alone is responsible for $40 billion of that.
The American Psychiatric Association (2005) asserts that mental
health treatment can more than pay for itself in terms of increased
worker productivity; untreated psychiatric illnesses exacerbate
chronic conditions like arthritis, asthma, and diabetes, thus
increasing potentially avoidable visits to primary care
Alcohol and substance abuse pour additional stress onto our
already-burdened medical system in Texas. Most people with
untreated alcoholism require more general health care, including
treatment for illness and injury. Their health care costs are at
least 100-percent higher than for people who do not have
alcoholism. Untreated alcohol problems waste $184.6 billion per
year in health care, business, and criminal justice costs, and
cause more than 100,000 deaths, according to the National Institute
on Alcohol Abuse and Alcoholism (2000).
Underage drinking costs $3.7 billion a year for medical costs
due to traffic crashes, violent crime, suicide attempts, and other
related consequences. The total annual cost of alcohol use by
underage youth is $52.8 billion.
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Texas Department of State Health Services. Worksite Wellness -
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Texas Department of Health. Strategic Plan for the Prevention of
Obesity in Texas.
Action for Healthy Kids Alliance. The Learning Connection: The
Value of Improving Nutrition and Physical Activity in Our
Texas Department of State Health Services.
Texas Department of Health. The Burden of Overweight and Obesity
in Texas 2000-2040.
National, State, and Urban Area Vaccination Coverage Among
Children Aged 19-35 Months - United States, 2004. MMWR; July 29,
2005 / 54(29);717-721. Accessed October 2005 at
Glazner JE et al. The Cost of Giving Childhood Vaccinations:
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