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Focusing on chronic illness management reduces overall health costs over time


A still-unsettled issue in health care cost containment is the potential of wellness and case management programs to reduce costs overall or over time.

“When you talk about the cost containment levers benefit managers have, one of the first is the investment in wellness solutions,” said Bryan Mailliard, Kansas City. Mo.-based vice president and strategic consultant in the employee benefits group at Lockton Cos. L.L.C. “Investing in your people today pays off in the future by reducing future claims incidents.”

Soeren Mattke, Boston-based senior scientist at RAND Corp. and managing director of RAND Health Advisory Services, said companies should focus less on general wellness programs and more on chronic illness management programs for employees with chronic diseases such as diabetes.

A RAND Corp. study that tracked the workforce of PepsiCo Inc. for seven years found that while chronic disease management programs saved $3.78 in health care costs for every $1 invested in the effort, broader wellness efforts such as subsidizing employee gym memberships provided little, if any, return on investment.

“We see that the savings from workplace wellness programs come exclusively from managing chronic conditions,” Mr. Mattke said. “So, financially speaking, managing unhealthy lifestyles just costs you money.”

According to a separate study by Willis North America Inc., 49% of employers with wellness programs said they had a measurable improvement in either medical costs or the risk profile of their workforce.