Health & Fitness Benefits Expand Generative Potential of Businesses

Generative economics is rooted in a simple insight: that economic activities can have corrosive or generative impacts on future available resources. The dynamics of an economic environment can add another layer of corrosive or generative potential to the activities in question. Analysis can be subtle, however, because generative qualities are often not the focus of conventional thinking or play out over the long term.

New trends in corporate benefits offerings show evidence of the substantial generative potential of health and fitness benefits for employees. Even as major corporations have cut jobs and reduced pension offerings, major employers have increased funding for employee access to fitness facilities. And there appears to be substantial value added, over time, from doing so.

The clear motivation is the increased productivity of healthier employees and the resulting reduction in long-term health spending. The human resources of these corporations are enhanced and magnified by fitness. The benefits of individual health and fitness translate into company-wide benefits.

Even as the recession and its prolonged legacy of sparse and hard-to-access credit, elevated joblessness and slumping investment in housing, continue to slow many businesses, health benefits that include fitness facilities, have remained in place or been expanded. According to the Washington Post:

The number of companies with 20,000 or more employees that provided fitness centers, subsidies or discounts grew by 11 percent from a year earlier, according to a 2010 national survey by Mercer, a benefits consulting firm. Another survey, by the Society for Human Resource Management, shows that the proportion of companies offering gym benefits has held steady since 2007. During the same period, many employers were paring retirement and other financial benefits because of the recession. The reason, according to many studies, is that wellness benefits provided in the workplace yield more productive employees who require less health care. That translates into savings on health insurance for companies and workers.

According to a 2010 article in the Harvard Business Review:

Doctors Richard Milani and Carl Lavie demonstrated that point by studying, at a single employer, a random sample of 185 workers and their spouses. The participants were not heart patients, but they received cardiac rehabilitation and exercise training from an expert team. Of those classified as high risk when the study started (according to body fat, blood pressure, anxiety, and other measures), 57% were converted to low-risk status by the end of the six-month program. Furthermore, medical claim costs had declined by $1,421 per participant, compared with those from the previous year. A control group showed no such improvements. The bottom line: Every dollar invested in the intervention yielded $6 in health care savings. [Emphasis added.]

There is controversy over how this value translates on a smaller scale. There is not a lot of evidence about how such programs affect smaller enterprises, in part because smaller enterprises often cannot afford benefits programs that include fitness, and tend not to have on-site fitness facilities.

The Congressional Budget Office has also expressed a need to find more data relating to this kind of health benefit spending. But for CBO, the calculation may be different, in the short term, as much government health spending deals with more vulnerable individuals and more long-term care, undermining somewhat the ease with which the 1:6 cost-to-benefit ratio can be reached.

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Originally published July 7, 2011, at TheHotSpring.net

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