High Cost of Healthcare: Chronic Disease

cost-of-healthcare

The first of a four-part series

Despite sweeping changes under the Affordable Care Act, healthcare in the U.S. is still a system in crisis. The Centers for Medicare and Medicaid Services (CMS) estimate that U.S. healthcare spending will reach nearly $5 trillion – or 20 percent of GDP – by 2021.

One of the biggest factors in our skyrocketing healthcare costs? Chronic diseases.
Statistics from the Centers for Disease Control and Prevention (CDC) show that chronic diseases and conditions such as heart disease, stroke, cancer, diabetes, obesity, and arthritis account for roughly 84 percent of all healthcare costs and are the number one cause of death and disability in the U.S. Nearly half of the U.S. population suffers from one or more chronic diseases, and by 2020, one in four adults will suffer from multiple chronic illnesses.

Those are sobering numbers – with costly consequences for employers.
Employees who suffer from poor health and chronic disease have increased absenteeism, poorer performance, higher healthcare costs, and more workers’ compensation claims. For employers, that translates into many costs that chip away at the bottom line. According to fightchronicdisease.org, a Milken Institute analysis found that treating the seven most common chronic diseases – combined with productivity losses – costs the U.S. economy more than $1 trillion every year.

The most tragic part of the equation? Chronic diseases are some of the most preventable.
For example, the CDC estimates that just by eliminating three risk factors – poor diet, inactivity, and smoking – we could prevent 80 percent of heart disease and stroke, 80 percent of type 2 diabetes, and 40 percent of cancer.

What can you do to control this drain on your bottom line?
As an employer, you have a vital role to play in creating a healthy workplace and encouraging healthy lifestyles. Wellness programs are one of the most popular ways to do that. But do they really work? While many studies have been done on the effectiveness of wellness programs – and the jury is still out on their definitive impact on healthcare costs and outcomes – they can and do help when done right.

Just don’t make the mistake of believing that a wellness program by itself is a sure way to reduce your overall healthcare spending. There is no one-size-fits-all solution. You need to choose or design a program that’s the right fit for your employees and your business. Some of the most common elements of wellness programs include:

  • Weight control
  • Fitness
  • Disease prevention
  • Smoking cessation
  • Stress management
  • Alcohol and substance abuse
  • Nutrition education
  • Mental health programs

You need a well-designed and well-managed program that includes educational components and incentives for participation such as financial rewards, gifts, free or subsidized gym memberships, and flexible company policies. The Affordable Care Act has provisions that make it even easier to reward your employees with incentives.

Government incentives or not, you know that healthy employees cost you less. A comprehensive, strategically designed, and properly managed wellness program is an investment in your employees’ social, mental, and physical health that can help those with chronic conditions, while helping you improve absenteeism rates, boost productivity, cut your insurance and medical care costs, and create the kind of healthy company you need to stay competitive.

Want to learn more? Talk to the experts at BeaconPath. Also, subscribe to our blog in the upper right corner, for more information about the high cost of healthcare. Over the next three weeks, we’ll discuss healthcare solutions for the current lack of transparency, disconnected systems and perverse incentives.

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