2011 Voluntary Benefits Special Report

Wellness program stabilizes health care costs

Furmano Foods reports costs unchanged for past three years

Furmano Foods, a Pennsylvania-based food products and service company, reported that its health care costs have remained flat for the past three years based upon a recently completed analysis of their health and wellness strategy.

Furmano Foods' employees have participated in a Wellness Coaches USA, Bluebell, Pennsylvania, comprehensive on-site wellness process since 2006. There has been a better than 95% employee engagement in on-site wellness coaching each year. In addition to on-site coaching services, the company actively educates its employees on being better health care consumers, with educational content including the use of generic drugs and costs variances among local physicians and hospitals.

The charts below, provided by Furmano Foods, demonstrate the effectiveness of its wellness strategy. The first chart, Furmano Foods Aggregate Healthcare Costs, shows actual aggregate health care costs compared to costs projected by a third-party consultant in 2004. The chart shows that actual health care costs for each year after 2004 were lower than projected by the Furmano Foods consultant, with the difference rapidly accelerating after 2007, culminating with a difference of more than $2 million in 2010 alone.

The second chart, Furmano Foods Healthcare Costs per Employee, shows total cost per employee since 2004. This chart shows that, subsequent to the implementation of Wellness Coaches' services, though health care costs per employee increased in 2007 and 2008, per-employee costs have remained virtually flat for every year since 2008. Furmano Foods believes that this record is especially significant in light of its aging population, with more than half its employees being over 50 years of age. Regarding the increases from 2006 to 2008, Furmano Foods' research concluded that the rise was primarily the result of initial efforts under the wellness program to:

(1) encourage more employees to get physicals (many for the first time in years)

(2) identify and guide to medical care employees with previously undiagnosed and untreated chronic health conditions.

As a result, though perhaps stimulating higher costs in 2007 and 2008, Furmano Foods believes that WCUSA's initial efforts have helped mitigate future, more costly, claims associated with such chronic conditions.

Kermit Kohl, Furmano Foods' Vice President of Human Resources, stated, "Our on-site coach has been a great fit in our organization and has really had a very positive effect on our company. We have an employee who actually owes his life to our coach. The on-site coach persuaded him to see a doctor for a chronic health condition. Although he is now being treated, if he had not followed her advice, the doctor told him that he would probably have died within three months or would have been beyond any effective treatment."