Everyone in Corporate America is looking for ways to cut healthcare costs. After wages, that is usually a business’ biggest expense. Employers desperate to cut those costs are increasingly turning to wellness programs. But saving money is hard to measure when it comes to wellness programs, because you have to put a dollar amount on things like absenteeism, and the even softer metric of presenteeism. That term corresponds to how productive an employee is on the job, measured up to 100 percent. The thinking is that if you’re sick, you’re not operating at full productivity, and so the company is effectively losing money.

Intercare CEO John Kahle.

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Recent studies of the return on investment in wellness programs has shown that businesses that implement them are, indeed, cutting costs and creating a more productive workforce. A report published in the February 2010 issue of Health Affairs, looked at the results of several wellness programs studies, most of them done with large employers that had more than 1,000 employees. The report shows that medical costs fell $3.27 for every $1 spent on wellness and that absenteeism costs fell $2.73 for every $1 spent.

A local company whose wellness program has been successful in cutting costs is CLARK Securities Products, a wholesale distributor of security products with more than 300 employees at 14 locations throughout the country. The company’s largest branch and headquarters is in Kearny Mesa. CLARK was named one of the winners of San Diego’s Healthiest Employers 2010 awards, sponsored by the San Diego Business Journal. Among the other winners—there were 15 in all—were Scripps Health, UC San Diego and General Dynamics NASSCO.

CLARK’s results were so good, they were chosen to be included in a set of wellness case studies used by Ezekiel Emanuel in the Obama administration during the debate on healthcare reform.

Susan Kuruvilla, president and CFO of CLARK, says the company started on its wellness journey in 2007, using a program from San Diego-based Intercare Insurance Solutions, a brokerage and consulting firm with a wellness program that benchmarks each employee’s health and then establishes incentives and an action plan to improve health, well being and productivity. Kuruvilla says the company decided to work with Intercare on establishing a wellness program, because its healthcare costs were spiraling.

They started with a health risk assessment to understand the health profile of employees. Three years since implementing its wellness program, Kuruvilla says the data the company gets from Interacare has provided a good look at how the health of workers has been affected.

“The first two years we did this, in our top five risk categories we had physical inactivity and the use of sleep medication—those are gone now as categories,” she says. Which means employees are physically active now—and sleeping well, without help. Kuruvilla says the wellness program costs less than $10,000 a year and slowed the company's former double-digit healthcare increases to less than 2.9 percent annually. CLARK also received reduced premium increases as a direct result of their health risk assessment data.

John Kahle, CEO of Intercare, says one thing wellness programs do that makes a difference is enlighten employees about their own health, alerting them to potential problems they are often unaware of, like high blood pressure or high cholesterol.

“Twenty percent of the people in the U.S. have high blood pressure but only half of them know it," he says."People generally don’t know how healthy or unhealthy they are. So wellness programs help them become informed consumers.”

And healthy employees create a healthy company, says Kahle. “Sure, companies are looking to reduce medical claims and doctor visits. But they also want a more engaged and healthier workforce.”

He believes a company is only as healthy as its employees. “They are one and the same,” he says.