Rethinking the Global Health Paradigm
Making the Shift from Managing Disease to Promoting Wellness
The US is on the edge of a national healthcare crisis. A report released by the Trustees of the Medicare Hospital Trust Fund that provides government health insurance for the elderly, warning that the fund would run out of money to cover hospital treatment in twelve years. Meanwhile, private health insurance premiums have risen by a shocking 73% in the last five years. While government continues to wrestle over how to pay for a health care system that is careening out of control, no one seems willing to acknowledge another even more troubling reality that is further exacerbating the crisis. The American public is getting sicker. Sicker workers, in turn, are not only putting increasing financial strain on the health care system, but also undermining America's productivity and competitiveness, all of which bodes ill for the future of the American economy.
The fact is, American workers are getting fatter, exercising less, still smoking and drinking too much, and becoming more stressed, all of which makes them more prone to the so called “diseases of affluence”… these diseases include Type 2 Diabetes, cardiovascular disease, lung-related illnesses like asthma, cancer, strokes, depression, and attention deficit disorder.
How sick are American workers? To begin with, obesity is skyrocketing across America. One of out every three workers is obese. By contrast, the obesity rate in Japan and Korea is only 3.2%. Many other Asian countries have similarly low rates of obesity. Obesity is now a major contributing factor to the onset of Type 2 Diabetes, and a primary contributor to an increase in heart attacks, cancer and strokes.
Affluent workers are also exercising less. High tech lifestyles, sedentary work environments, and more passive entertainments, are making workers more vulnerable to chronic and life threatening diseases. Incredibly, 60% of Americans have no vigorous physical activity in a typical week. Stress is also on the rise, as the demands of a 24/7, nanosecond culture, create time pressures on workers, with an enormous accompanying increase in attention deficit hyperactivity disorder and depression. Not surprisingly, Attention Deficit Hyperactivity Disorder (ADHD) is becoming a pandemic. In the US, 7.8% of children between the ages of four and seventeen have had ADHD.
It's no wonder that healthcare expenditures in America are going through the roof. The cost of health care in the US is growing by 7.3% a year, and currently totals a whopping 2 trillion dollars and accounts for 16% of the GDP.
The cost of providing healthcare is borne by taxpayers, workers and employers. The steep costs make labor less competitive in global markets. Reduced earnings also means less savings and less consumption for workers. Increased health care costs for the employers reduces profit margins and limits new investment, all of which leads to a vicious downward spiral for the economy.
Major American companies, like General Motors, are worried that the escalating cost of providing healthcare coverage could cripple or even bankrupt their operations in the next few years. GM now pays out $1525 in health care expenditures per car produced — a sum that exceeds the cost of the steel in the car. GM's CEO Rick Wagoner recently quipped: "It's strange. When I joined GM 28 years ago, I did it because I love cars and trucks. I had no idea I'd wind up working as a health care administrator."
A sicker workforce not only raises the cost of labor, but also lowers the productivity of the workforce. In the US, poor worker health accounts for $260 billion in lost productivity per year—or 2.4% of GDP— because of growing absenteeism and what human resource professionals call “presenteeism”: that is, deteriorating performance on the job in the form of less stamina, poor concentration, and an increase in errors and accidents.
Is there an answer to the deteriorating health of affluent workers? Yes! And the solution is remarkably simple in concept, but would require a paradigm shift in the way society addresses the question of the health and well being of its citizenry.
A spate of studies over the past 30 years, has provided conclusive evidence that 60-70% of all major diseases are associated with modifiable environmental risks. Poor nutrition, obesity, lack of exercise, stress, smoking, and over-consumption of alcohol all contribute to ill health. Yet, the United States spends a tiny fraction of government funds on prevention, including inoculations, annual diagnostic tests and appropriate medications. Even less is spent on health promotion — that is, facilitating positive changes in lifestyle, including exercise programs, dietary changes, stress reduction programs and the cessation of smoking. The US devotes less than 5% of the federal health care budget on conventional prevention practices, and less than 1% of each research dollar is spent on behavior-oriented health promotion.
A number of major global companies, worried over increasing health care costs and loss of productivity have teamed up with health professionals in a pioneering effort to shift the health paradigm from treating disease to promoting wellness, with incredible results. Companies like Dow Chemical, Kimberly-Clark, Johnson & Johnson, Pitney-Bowes, Prudential Financial, Procter & Gamble, and Volvo/Mack Truck are experimenting with various prevention and health promotion programs and their experience is eye-opening.
To ameliorate the health and quality of life of their workers, companies are installing gym facilities on site or paying for off site health club memberships and professional trainers, providing only healthy meals in company cafeterias and free nutritional instruction for workers and their families, as well as offering stress management counseling and other health promotion services.
Why would companies spend additional funds on promoting wellness? Because the return on investment (ROI) is nothing short of remarkable. For every dollar invested in comprehensive prevention and health promotion programs, these companies are saving $3-8 in the form of reduced health costs and gains in productivity from lower absenteeism and presenteeism. The key to the success of all of these programs is their voluntary nature and the incentives built-in to the process to motivate employees to become involved in changing lifestyle and becoming healthier.
It should be made clear that a prevention and health promotion initiative is not to be regarded as a replacement for existing federal health care coverage, but, rather, a complement--a way of assisting workers to become healthier and lead more productive and happier lives.
How then to begin?
First, government and industry, working together, should help identify best practices and set universal standards for prevention and health promotion.
Second, tax credits and incentives should be put in place to encourage the development of the wellness sector in the health care field. What is required is well trained, qualified companies certified to provide a range of prevention and health promotion services and programs to companies. The creation of a labor intensive wellness industry will create many new jobs and vocations --jobs that by their very nature are anchored within the country.
Third, for every dollar companies commit to creating an in-house wellness staff or for hiring an outside wellness firm, the government should provide a corresponding dollar of tax relief on corporate profits, up to an agreed upon cap.
Fourth, a formula should be established by government, industry, and the trade unions, that would provide for a reduction in the employer and employee contribution to the HMO's, commensurate with the increase in wellness and the money the insurance provider saves in reduced medical cost for employees involved in the wellness program.
The best way to reduce the escalating costs of health care in the US is to shift from treating illness to promoting wellness. We should begin at the workplace.
Interviews with Jeremy Rifkin
Handelsblatt, Gesunde Wettbewerbsfähigkeit, March 7, 2006