Here in the U.S., 75 percent of the country’s healthcare costs stem from preventable chronic diseases like heart disease, Type 2 diabetes and some forms of cancer. Yet it’s shocking to realize 95 percent of that spending goes to treatment; only 5 percent goes to preventing such conditions in the first place. At Virgin HealthMiles, we firmly believe prevention is the key to lowering healthcare costs and keeping individuals healthy and out of the healthcare system.  The Obama Administration echoed our long-held perspective recently with its announcement of the new National Prevention and Health Promotion Strategy. 

This new strategy includes actions that public and private partners can take to help Americans stay healthy and fit and improve our nation’s prosperity. It outlines four strategic directions that, together, are fundamental to improving the nation’s health, including the importance of “building healthy and safe community environments” since the prevention of disease “starts in our communities and at home, not just in the doctor’s office.”  And what better community for reinforcing the power of prevention and good health than the workplace? Not only do most of us get our health insurance through our employer, but we spend more than half our waking hours at work.  Along with our households, it’s probably the most influential community we belong to in terms of the health decisions we make.

More and more, employers are recognizing the power of prevention to help keep employees healthy. To help keep healthcare costs down, and productivity up. What’s more, they know they must act before it’s too late. Leading employers are creating a workplace culture of health to avoid a profitability crisis of epic proportions. They’re taking action by implementing prevention-focused programs that help employees make healthier lifestyle choices. Studies prove the workplace is an ideal environment for promoting good health.  The social networks they foster help keep employees engaged and motivated to be healthy.  Effectively structured and implemented incentives-based wellness programs help lower healthcare costs by keeping people healthy and preventing the onset of costly chronic conditions.

Since 2006, we’ve been working with large employers across the country to help them promote prevention and healthy lifestyles, and align their interests with those of their employees to drive down lifestyle-related healthcare costs.  Their employees are getting active, getting healthier, and sustaining those healthy behaviors over time.  The new National Prevention and Health Promotion Strategy will help bring even more focus to these principles, ones that are critical to improving health and helping organizations boost business performance.

Earlier this week, McKinsey & Co. released a study suggesting the Affordable Care Act (ACA) might drive as many as 30 percent of employers to eliminate employee healthcare plans once the Act is fully in effect by 2014. Yet, regardless of whether American employees obtain health insurance from their employer or purchase from subsidized exchanges, prevention is the key to reducing healthcare costs.

The government is attempting to broaden access to the current supply of health services, but not addressing the root cause of the dramatic increase in demand.  The reality is, where people get their insurance has little impact on lowering healthcare costs and making insurance more affordable, the ultimate goal of healthcare reform.  Instead, our system needs to focus on prevention and offer financial incentives to inspire Americans to take more responsibility for their health – the equivalent of a ‘good driver discount’ for health insurance.  Otherwise the discussion surrounding the source of health insurance is nothing more than reshuffling of the deck chairs.

While the ACA is mired in the politics of Washington, employers can’t afford to wait and must address the issue of rising healthcare costs. Seventy-five percent of today’s healthcare costs stem from preventable chronic diseases like heart disease, Type 2 diabetes and some forms of cancer.  What’s more, the productivity impact of these conditions is significant for organizations.  The lost economic output associated with chronic conditions totals more than $1 trillion, including time lost for employee and caregiver workdays and individual and caregiver presenteeism.

Forward-looking businesses are taking action to lower healthcare costs by implementing programs that help employees make healthier lifestyle choices. These companies understand the significant medical and productivity cost impact of an unhealthy workforce and recognize the vital role they play in encouraging their employees to be healthy.  Studies prove the workplace is an ideal environment for fostering good health.  They provide tremendous social networks to keep employees engaged and motivated in good health.  Effectively structured and implemented incentives-based wellness programs drive down healthcare costs by keeping people healthy and preventing the onset of chronic conditions. Leading businesses know they must create a workplace culture of health to avoid a profitability crisis of epic proportions.

Last Tuesday, the Republicans regained control of the House of Representatives.  Leading up to this shift in power, many Republicans were campaigning to “replace and repeal” the health care reform bill that was passed in March.  While it’s unlikely that the reform bill will be repealed – Democrats still control the Senate and occupy the White House – it’s more likely that Republicans will engage in procedural blocking  of the bill’s roll out.

What does this mean? It means that the climate of uncertainty already surrounding the bill just got murkier. It means the period of uncertainty just got longer. And it underscores the message that private organizations must act now instead of waiting for Washington.

I can’t state more plainly, or more urgently, that companies must have a data-driven, actively managed approach to prevention in their workplaces if we’re truly going to reform health care and its spiraling costs. We can debate the merits and deficits of the Patient Protection and Affordable Care Act all we want, but unless we sharpen our focus on preventing the illnesses that drive costly claims, that bill risks being minimally effective at best, or completely failing at worst.

Unmanaged, preventable health care costs are one of the largest drains on corporate income statements. But as an employer, you have the power to change that. Do what you can to encourage and support healthy behaviors amongst your staff, create a culture of prevention in your workplace, and you can avoid the healthcare costs whose drain on corporate P&Ls  is threatening American business’ global competitiveness.

If you’ve been overwhelmed by the health reform law, you’re in luck.  The Kaiser Family Foundation posted a video that’s actually quite well done and informative.  It breaks in all down in nine minutes cartoon ”YouToons”.

Today, Washington enacted six major provisions of the Patient Protection and Affordable Care Act (PPACA) as the first step in rolling out the new healthcare reform legislation.  Yet despite expanding coverage to millions of previously uninsured Americans, unless we tackle the root causes of preventable chronic disease, businesses and individuals will still be burdened by rising healthcare cost.  

More than 75 percent of the nearly $2 trillion healthcare costs impacting businesses and their employees today stem from preventable chronic diseases like heart disease, diabetes and some forms of cancer. The good news is chronic diseases are largely preventable with healthy lifestyle choices — getting enough physical activity, a healthful diet, and avoiding tobacco. 

The PPACA expands provisions beyond those in existing HIPAA wellness program regulations, which allow employers to offer incentives to employees who participate in employee health programs, such as differentiating up to 20 percent of healthcare insurance premiums.  The PPACA increases this differential to 30 percent in 2014, and may even rise as high as 50 percent in some cases.  The policies and provisions exist.  Now, more employers need to take steps to implement them in their organizations. Taking advantage of these provisions early on, in combination with a prevention-focused, technology-based employee health program, lets employers improve employee health, gain mechanisms to measure and manage their healthcare cost-savings strategies, and tap into funding strategies to create cost-neutral programs.

Read the full press release: HEALTHCARE REFORM OFFERS EMPLOYERS PROVISIONS TO STEM RISING COSTS; STRONGER COMMITMENT TO PREVENTION STILL NEEDED, SAYS VIRGIN HEALTHMILES

There are a lot of questions circling around health care reform and what is actually means for individuals and employers.  As of midnight, September 22, 2010 some of these health care provisions take effect, as outlined by US Money Talk. 

Starting this week:

• As of that date, parents will be able to cover their children on their insurance until the age of 26. Lifetime limits of coverage will begin to phase out and children with pre-existing illnesses cannot be denied coverage.
• Some preventative services, such as colonoscopy and mammogram, must be offered without deductible or co pay. Women will be given the right to see an OB/GYN without a referral.

The bigger question is, how does this impact the cost of health care coverage and who is responsible for picking up the tab?  While health insurers, companies and individuals try to make sense of the unknowns, one constant remains.  The amount companies have to pay for health care coverage of their employees has been rising at over 10% per annum.  And, over 75% of those costs are attributable to preventable chronic diseases, including: heart disease, diabetes and some forms of cancer.  As the implications of the health care reform continue to be defined, prevention is still the key to reducing overall costs.

For more information on Healthcare Reform: The Role of Prevention in the New Legislation, listened to our archived webinar.

Washington recently expanded coverage to the millions of uninsured Americans with the Patient Protection and Affordable Care Act (PPACA). But let’s face it – just having health insurance isn’t enough to keep people healthy. Washington seems to recognize that, too, as evidenced with certain provisions passed in the PPACA.  The notion of prevention is becoming more central, which is critical if we’re actually going to see real reform in our healthcare system.

As many of you know, HIPPA currently allows employers to provide discounts on health insurance premiums of up to 20% for those who participate in wellness programs. Under the new legislation in the PPACA, beginning in 2014, that amount can be increased to 30%, and may be increased to 50% at the discretion of the Secretary of Health and Human Services. Of course, the wellness programs must meet certain requirements to qualify: they must be voluntary and non-discriminatory, and they must provide reasonable alternative standards to receive the discount for those who are physically unable to achieve the program milestones.

What does this increase mean? It means government is formally recognizing the value of cultivating healthy lifestyles. It’s telling employers to provide substantial incentive to employees to take care of themselves first, instead of just waiting to be treated after they’re sick.  It’s applying the same gain-sharing concept of a “good driver discount” to health insurance: employees who make good decisions like being physically active will benefit with a big discount on their health insurance premiums, while those who do not take care of themselves will bear more of the financial burden. It’s a widely accepted approach in nearly all other forms of insurance, and it’s encouraging to see government recognize that it’s critical in health care.