Business 5000, Fall I
Instructor Janet Winchester-Silbaugh
28 September, 2009
This paper contains research done on employer-mandated health and wellness programs. These programs were reviewed from the perspective of 3 major ideas from our text book; Global Economy, Business Ethics and Starting Your Own Business. My research methodology consisted of reviewing articles from professional business publications, studies and organizations. U.S. companies are at a disadvantage compared to their foreign competitors when it comes to health care costs. A properly implemented health and wellness program can minimize or eliminate this disadvantage by reducing health care cost and minimizing lost productivity due to health issues and produce a positive return on investment. An employer who implements a health and wellness program has an ethical responsibility to the employee to protect any information derived from that program that could potentially adversely affect the employee later on in life. Employers have a responsibility to their investors and shareholders to actively try to control health care costs that affect the profitability of the company. A new company just starting out would be wise to implement a health and wellness program from the inception of the company and not wait till later in the company’s life to do it.
With all the recent debate in the news about health insurance and the various plans put forth to ensure all Americans have health insurance, one issue that interested me is employer-sponsored health and wellness programs. There is an increasing trend among employers who provide health insurance to influence their employees’ lifestyle thru health and wellness programs.
Employer health care costs have increased steadily as a percentage of hourly wages and salaries since 1960. In 2006, employers paid almost 9.0% in health care contributions which exceeded the amount they paid in social security taxes that year (Axeen & Carpenter, 2008). Figure 1 below shows this increase in health care costs as a percentage of hourly wages.
However, this number really doesn’t have much meaning until you compare it to other countries in the world that U.S. companies compete against in the global economy. The table below compares U.S. employer health care costs with the other countries listed (Axeen & Carpenter, 2008). As you can see, U.S. employers spend almost 2.7 times as much on health benefits as a percent of payroll than the foreign average. These rising health care costs create a significant competitive disadvantage for U.S. firms
According to study by Sood, N., Ghosh, A., & Escarce, J... (2009) on the effect of employer-sponsored health care cost growth and its impact on the economic performance of U.S. industries, they found that “a 10% increase in excess growth in health care costs would have resulted in 120,803 fewer jobs, US$28,022 million in lost gross output, and US$14,082 million in lost value added in 2005. These declines represent 0.17 to 0.18 percent of employment, gross output, and value added in 2005. Excess growth in health care costs is adversely affecting the economic performance of US industries (page 9).” As U.S. health care costs continue to rise and employees continue to feel they are entitled to employer provided health insurance (Conlin, 2007); employers are looking for ways to control health insurance costs. One of those ways is thru employer-sponsored health and wellness programs, also called disease management programs (Goetzel, Ozminkowski, Villagra, Duffy, 2005), for their employees.
SUMMARY OF THE ISSUES
The basic issues surrounding these health and wellness programs are: 1. Does the employer have the right to force employees to participate in these programs and if so, 2. How to protect the employees’ right to privacy concerning medical issues. This paper will examine these issues from...