Small cuts in health risk lead to large savings
Estimating the return-on-investment from changes in employee health risks on the Dow Chemical Company's health care costs. Goetzel RZ, Ozminkowski RJ, Baase CM, Billotti GM. J Occup Environ Med. 2005. 47: 759-768.
Aim
To estimate whether health risk reduction strategies are worthwhile investments for companies.
Looked at
25,828 individuals employed by the Dow Chemical Company in 2001, all of whom completed the Dow Health Questionnaire and underwent health screening.
How?
A 10-year financial impact model was developed and used to predict healthcare expenditures for the next 10 years in four different scenarios.
Results
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For the Dow Chemical Company to break even, only a 0.17% reduction in each of the following health risks per year would be needed; poor exercise habits, poor eating habits, being overweight, current or former tobacco use, high total cholesterol level, high blood glucose level, high blood pressure, high stress, depression, and heavy alcohol use.
Intervention scenario
Increase in healthcare expenditure per year (%)
Return on investment
(per US$1 invested)
No intervention
3.1
Not applicable
Modest (each risk factor reduced by 0.1% per year)
2.6
0.76
Major (each risk factor reduced by 1% per year)
1.3
3.21
What does this mean?
In large corporate populations, small reductions in health risk status can lead to large savings. The potential financial benefits could be even greater if indirect costs associated with ill-health (lost productivity and absenteeism) were considered.