4/17/00  Nancy Slocum






Statistics for 1998 reveal 5.9 million work-related illnesses and injuries in the private sector, with a rate per 100 workers of 6.7%; it is estimated that injuries alone cost US businesses over $110 billion annually.1 Concern for worker safety is revealed in state laws as far back as the 1860's. These early laws required employers in textile mills to decrease or eliminate certain workplace hazards. Federal involvement began early, but was slow to become fully effective. The Federal Bureau of Mines was established in 1910 to address mine safety, however, it was not allowed to enforce standards until the early 1950's.  More than anything, coal-mining accidents focused attention on worker safety. Eleven major mine disasters in a 20-year period, along with a West Virginia mine disaster in 1968 in which 78 miners died, resulted in the Coal Mine Safety Act in 19692

The early 1900’s also saw the development of state workers’ compensation programs to provide medical and compensation benefits for work-related injuries, diseases and deaths. Prior to this, employees shouldered much of the financial burden of injuries incurred in the workplace. By establishing an insurance fund for employers, it shifted liability to the industry, rather than society or the injured employee, thus encouraging safer work environments. 

Not only was an increasing rate of workplace injuries of concern, (29% increase in reported injuries between 1961 and 1970), but also evidence for occupational diseases, including black lung, asbestosis, asbestos-caused cancer, radiation sickness, and beryllium disease continued to focus attention on workplace health and safety. 3 Rapid technological changes brought new chemicals, processes and stresses into manufacturing processes.  The growing environmental movement also raised the consciousness of the average person to the presence of chemicals and environmental hazards. As a result, Congress passed the Occupational Safety and Health Act (OSHA) in 1970. A source of great debate between political parties, union leaders and business interests that began in the Johnson administration, the bill established a research-driven organization to set and enforce standards in workplace safety and health. 

The role of OSHA is to develop and enforce workplace safety standards, offer compliance assistance, training and education. OSHA standards are based on recommendations from its research arm, NIOSH, the National Institute for Occupational Safety and Health. Regulations are concerned with numerous safety hazards, including fires and explosions, dangerous machinery, moving and lifting equipment, noise, heat stress, vibration, ergonomic factors, and chemical exposures. OSHA’s track record reports a 40% reduction in the illness and injury rate, and a 50% reduction in fatalities since 1971, in light of an increase in employment from 56 million to 105 million in the same time period.4  However, OSHA is often criticized for overzealous enforcement of rules that burden management with excessive costs and regulations. In light of this reputation, and most probably an overburdened caseload and staff, OSHA has recently initiated voluntary compliance programs that reduce or eliminate the number of inspections required to assure compliance with regulations.

            The nature of work in the US has shifted from largely manufacturing to a service-based economy. Other changes in the composition of the US workforce include an increase in temporary workers, workers starting at younger ages, as well as an increase in older workers, and a rise in the number of non-English speaking workers. Pervasive changes in health care, including increasing costs and the advent of managed care systems, have created additional strains on employers. The evolution of these and other factors create new health and safety issues that demand attention, and have expanded the scope of occupational health in the private sector. In addition to identifying risks and hazards in the workplace that contribute to injuries and fatalities, the new focus promotes health on an individual level as a way to improve a company’s overall profitability. This approach is more proactive in terms of preventive health, and involves identifying an individual’s health risk factors and offering programs targeted to those needs. From a management perspective, it has the potential to decrease absenteeism, lower medical claims costs, improve recruitment and retention of employees, and contribute to the individual employee’s overall well-being and quality of life. By coordinating efforts in cost and benefits planning, disability management, health and safety protection and human resource policy, overall gains in productivity and profitability have the best chance to materialize. Certainly the prevalence of wellness programs is an indication of the role they play in business management. The number of wellness programs nearly doubled from 33% to 60% in the 1980’s, and a survey of 1,035 major employers in 1995 found that 85% offered some form of health promotion.5

Table 1 identifies several types of worksite health programs.

Table 1. Types of Programs

            Health Promotion

            Health Risk Assessment

            Demand Management


            Employee Assistance





Health Promotion/Wellness Programs

            Health promotion, disease prevention and general wellness have formed the basis of workplace wellness programs since their inception. Initially targeting cardiovascular disease, wellness programs commonly use behavior modification principles to promote positive changes in lifestyle and health behaviors, e.g., smoking cessation, stress management, dietary changes to reduce cholesterol and weight, and fitness. Programs can be as simple as lunchtime lectures, group classes, or one-on-one counseling sessions. Changes in health habits do not happen overnight, however, as evidenced by Goetzel, et al (1998) in a study that compared total costs and life-style related costs for a worksite health promotion program at Proctor & Gamble Company.6 Participants completed a health profile questionnaire and were measured for blood pressure, BMI, and lipid profile. Individualized reports of the results were given, along with one-to-one counseling and behavior change support. Health professionals gave quarterly follow-ups during the three-year study. Participants also had use of fitness facilities, behavior modification programs, education sessions, health screenings, and were given participation prizes. The results were significant, but did not manifest until the third year of the program. Participants had 29% lower total health care costs, and 36% lower lifestyle related costs, compared to non-participants. Also by the third year, participants had significantly lower utilization of hospital services. Participants and non-participants started the study with roughly equal baseline costs, and there were no differences in costs between groups during the first two years of the study. The results of this study are important to the planning aspects of wellness programs, in that personal health changes often need time to become established, and thus produce cost savings to an employer.

The field of worksite wellness has evolved to include programs that offer disease management programs in an effort to reduce medical costs. Services for early detection of diseases such as breast and prostate cancer have in some cases reduced treatment cost from $40,000 or more to $15,000 or less.7 A three-month education intervention for employees with diabetes resulted in significantly improved blood glucose control among participants.8

            As an alternative to indemnity insurance, some companies have found it cost-effective to offer an on-site medical clinic. Operating as a managed care system, they have the advantage of offering primary care and preventive services, along with convenient access for employees. Employers can save 20-25% on health care costs by using an out-sourced on-site program, particularly in smaller communities with few health care options.9  Pellitier (1997) reports that the self-insured and self-administered health and medical plans of large corporations are evolving prototypes of disease management within a managed care environment.10  Instead of focusing on individual episodes of illness, the person with a disease is seen more systemically, as a ‘unit of management’, emphasizing cost effective quality care and preventive services. A review of corporate health and management programs by Goetzel, et al (1999), reported return on investment estimates from $1.49 to $13 per dollar spent, depending on the type of program offered, with disease management programs resulting in the highest returns.11 The authors note, however, that disease management programs also tend to be the most costly to implement. Their findings suggest the need for appropriate use of interventions and programs to maximize returns.


Health risk assessment

The use of health risk appraisals (HRAs) has become increasingly common as a launching point for a range of health and wellness programs. Generally given as a written questionnaire, HRAs query health habits such as diet, exercise, safety habits, smoking & drinking, life satisfaction, medical history and self-care habits, and intentions to improve health. An individual’s health risks can be identified and wellness programs developed to address prevalent needs. Depending on where individuals fall on a health continuum, programs can be designed to support those who need existing disease management e.g., diabetes, hypertension; provide preventive programs and screening services for those with known and unknown risks, and interventions for both high risk and low risk individuals.12

Increasing evidence shows that the higher number of health risks an individual possesses, the higher the medical costs they generate, and the higher the rate of absenteeism.13 Extensive research by the University of Michigan Health Management Research Center (HMRC) indicates that as risks go up or down, the change in costs to a company follow in the same direction.  While many wellness programs attempt to reduce the cost impact of high-risk employees, it is often at the expense of neglecting shifts in individuals from low risk behaviors to high risk. HMRC researchers hypothesize that by designing programs that keep low risk individuals from adding risk factors over time successfully reduces the overall number of high-risk employees, thus lowering costs in the long run.

In a study of the impact of health risk factors on worker productivity,

 Burton, et al (1999) devised a formula to capture a larger picture of productivity that included actual decreases in on-the-job productivity, combined with the more common measures of absenteeism and disability. 14  Their results showed that as the number of health risks increased, worker productivity decreased. Their data also revealed that general distress, diabetes, and increased BMI (body mass index) were specific health risks that had the greatest impact on productivity.  Mental health disabilities and digestive disorders were found to have the greatest impact on long-term disabilities. This study points to specific risks that could be targeted to maximize scarce health promotion resources.


Demand management

Most working Americans and their families receive health insurance through their employer. Figures from the Bureau of Labor Statistics for 1997 reveal that three-fourths of full-time employees participated in employer-provided medical plans.14.5 In light of this, a newly emerging aspect of some workplace wellness programs is demand management. Demand management refers to programs that educate and encourage workers to improve their health, manage minor medical problems on their own, and make appropriate medical choices, resulting in the more efficient utilization of services, and hence, to control costs. The crux of demand management is to help the individual decide whether to obtain care, in an effort to reduce utilization among the ‘worried well’ and increase use among the ‘blasé sick’.15  Programs generally involve giving individuals printed health education materials such as self-care manuals, and access to nurse-staffed telephone based decision support.  It is estimated that nearly 80% of identifiable health problems could be managed at home, without the intervention of a medical care provider, thus contributing to cost savings.16  In addition, Bradford (1996) cites that self-care programs can show positive cost-benefit ratios sooner than other interventions, such as behavior modification. 17

Several studies cited by Vickery (1996) have shown decreases in ambulatory care and minor illness care utilization with the use of demand management.18  Research conducted by the Center for Corporate Health revealed a cost savings of $4.75 for every dollar spent on a demand management program that provided written self-care material and nurse telephone counseling service.19 A program was initiated at a manufacturing company in Pennsylvania that included a self-care guide covering 25 of the most common health problems, an education session on self-care and how to use the manual, as well as incentives to employees to use the manual. Health care utilization was evaluated after six months, and showed an 18.5% decrease in outpatient visits and a savings of $4.40 per dollar spent for participants in the program.20 The value of this approach lies not only in cost savings, through more appropriate and efficient use of medical care providers, but also in the personal empowerment of people to take action and responsibility in managing their own health.



In its largest sense, ergonomics applies to the design of objects, systems, and environment for human use. Its most common application in the workplace refers to

minimizing stress and strain on the worker in performing whatever tasks are demanded by the job, creating an optimal ‘fit’ between job and worker. Fit problems have always been a part of the workplace, caused by heavy lifting, awkward positions, the use of force to perform a task, as well as static postures. Repetitive motion injuries (RMIs) from the use of computer keyboards and eyestrain from video display terminals have become more common with the information age. OSHA reports that musculoskeletal disorders (MSDs), such as, carpal tunnel syndrome, sciatica, tendonitis, herniated disc, and low back pain, account for $15-20 million in workers’ compensation claims annually, as well as 34% of all lost workdays from illness and injury.21  OSHA is currently developing process standards for manufacturing and manual handling jobs to reduce MSDs.

Ergonomics specialists attempt to improve how a job is performed in order to reduce the number and severity of injuries that occur from a poor fit between job and worker. OSHA reports of an overwhelming body of evidence from the National Academy of Science and NIOSH indicating that ergonomics programs are the most effective way to reduce the incidence and severity of  MSDs. They cite that the most successful ergonomics programs are system-based, involving management leadership, risk assessment and hazard analysis, training and education, and rigorous injury management and evaluation. Adams (1993) suggests a comprehensive approach that uses ergonomics to solve existing problems, as well as in planning and design considerations to prevent future problems from occurring. After ergonomic problems have been identified, changes can be made in equipment design, use of alternative tools, changes to work station layout, work procedure changes and environmental changes that even take into account lighting and ventilation.22  An ergonomics program at Martin Marietta Systems incorporated early intervention and aggressive clinical management of injuries, and education on lifting, body posture and physiology. Cost savings were reported to be $830,000 per year, with a return of $9 per dollar spent.23  The Redwing Shoe Company cut workers’ compensation costs 75% by modifying workstations and giving employees adjustable chairs.24 An ergonomics program for employees of the city of San Jose, CA, resulted in a 57% decrease in back injuries and a 25% drop in wrist injuries within 2 years.25

 In addition to the physical aspects of work, psychological and organizational factors contribute to worker illness and injury as well. This perspective takes into account the psychosocial conditions of work; the level of control workers feel they have on the job, flexibility in scheduling, and relationships with co-workers. Two studies of human service workers and probation officers show a predictive link between psychological well-being and job performance.26  A study at the Toronto Star (newspaper) is looking at risk factors for RSI (repetitive strain injury) that include work environment. Interventions involve allowing employees more autonomy in selection of workspace design and equipment, creating flexible work schedules, and fostering more supportive relationships between managers and workers.27


Employee Assistance Programs (EAPs)

Substance abuse and depression are two health problems that exact high costs for employers. Figures from 1990 suggest that depressive disorders in the workforce presented an economic burden of $43.7 million, with absenteeism accounting for $12 billion.28  Even higher costs to businesses were reported from the use of alcohol and other drugs; an estimated $81 billion in lost productivity due to premature death and illness.29

Not only lost productivity and absenteeism, but also increased accidents, more frequent employee turn-over, and increased medical costs factor into the cost of these disorders.

In response to this, a worksite program now found in many companies is the Employee Assistance Program (EAP). EAPs typically offer confidential evaluation, treatment and referrals for a range of personal problems, from family/marital issues, mental health, financial and legal problems, and substance abuse. In 1995, the average annual cost of EAP services was under $27.00 per employee, depending upon whether services were staffed in-house, or contracted out.30 This compares to an estimated cost of $50,000 to recruit and train a replacement for an employee terminated for substance abuse.31


Table 2 identifies reasons for providing worksite health programs.

            Table 2. Reasons for instituting worksite health programs

            Compliance with federal and state regulations

            Health care cost reductions

            Increased productivity

            Reduction in lost workdays

            Improved employee recruitment and retention



Participation in Wellness Programs

The best-designed health promotion interventions are worthless unless employees sign up and show up. Participation rates must be taken into account for the long-term  financial viability of any wellness program. Probably the most important factor in encouraging participation is a serious commitment from the entire management of a company to promote health and wellness in the workplace.  A high level of commitment to wellness creates a corporate culture that can motivate individuals to improve their health behaviors. In addition to management commitment, there are always bribes! Incentives can and are used to motivate employees to participate in programs and minimize their health risks. Incentives can take different forms; insurance co-payment reductions based on health risk ratings, contributions to medical spending accounts based on low risk status, and lump sum payments. Disincentives are also used, such as condition-specific deductibles. Simple plans require higher co-payments for high-risk employees. In one case, employees were assessed higher deductibles for medical expenses incurred for accidents involving alcohol, illegal drugs, or non-use of seatbelts and helmets.32 The use of incentives and disincentives raises other issues, however, in that they do not take into account barriers to behavior change. These can include lack of money and education, cultural differences, and genetic factors.


Outcome Measures 

            Measuring the costs and benefits of health promotion and wellness programs is a challenge facing the field today. Rigorous data collection regarding individual health risks, improved health behaviors, well-being and quality of life, productivity, absenteeism, health care utilization rates and medical claims costs, short and long-term disability claims, and program costs is necessary to evaluate the benefits gained form programs. Clearly, health promotion programs are increasing in prevalence and scope, and numerous studies have reported positive gains in terms of many of these outcomes. However, there is a lack of standardization in what constitutes costs (space, utilities, personnel, paid time for employee participation) and benefits (cost savings to individuals and the company, decreased medical costs, effects on performance and productivity), making it difficult to make comparisons and generalizations from existing studies.3329  Continued research and evaluation will further the evolution of programs that are both personally satisfying for employees and cost-effective for companies.


Suggestions for Creating Workplace Wellness Programs

            Certainly one advantage to using the workplace to promote health and wellness is that employees form a captive audience. The flip side of this is that workers are often diverse in terms of culture, age, health status, and job tasks, all of which present challenges in designing effective programs.  And while in general, everyone could benefit personally from positive changes in their health, from a business perspective, the costs involved must be justified. In considering the design of health and wellness programs, steps involving assessment, planning/ implementation, and evaluation, should be addressed.



            Assessment occurs on many levels and throughout the process.

 -Expenditures.   It is critical to gather information on costs, including absenteeism/lost workdays, medical claims, disability, and even morale, at baseline in order to evaluate the effectiveness of the interventions. While not easily accomplished, the need for outcome measures is paramount. Another question to ask is, what would be the costs to the company if no health promotion efforts were made, with some projection of costs into the future.

-Health Status.   A foundation for designing programs is some measure of the health status of employees. A health risk assessment can identify needs and allow for  targeting of  resources to maximize the benefits of health promotion programs.

 Employee focus groups could also provide valuable insight into risks, hazards and needs.

-Resources.   What resources are currently available? This query applies to financial resources for programs; physical resources, such as on-site spaces for education sessions, internet/intranet capabilities, space and opportunities for exercise, employees committed to health promotion who would be willing to serve as mentors or motivators for others. Do current insurance plans offer preventive services, and are employees aware of these options for health promotion? Is there a fitness facility in the neighborhood that would offer a group discount to employees?


Planning and Implementation

            -Management of programs Will programs be implemented in-house, or will an outside health promotion company be charged with the process? Who will staff in-house  programs? Is there a full commitment from management to undertake health promotion in a supportive and informative manner?

            There are a growing number of workplace health promotion consulting firms that provide a range of services to companies, large and small. These services include health education programs, health screenings, health fairs, fitness programs, risk reduction programs, and various health consultation services. Programs can be custom-made for the particular needs of a company.  Two examples of these consulting firms include, Staywell  and Wellcorp. Their web addresses can be found in the following section.

            -Types of programs What types of programs should be offered; targeting high risk employees, low risk, disease management? How will programs be implemented?

            -Participation/Utilization What can be done to encourage utilization; the use of incentives or disincentives; work time offered for participation; assurance of confidentiality of employee records.


            Monitoring and Evaluation

            -Outcome Measures Are number and severity of risks lowered over time? Is there a change in employee morale and well-being? Is there a reduction in absenteeism, disability/workers’ comp/medical claims? What are the effects on productivity? Are self-reports regarding health behaviors substantiated by other sources? What is the level of employee satisfaction with programs?



          Additional Resources

In addition to the references listed below, there are several other web-based sources of practical information regarding workplace health and wellness programs:

Government sites include: www.osha.gov , www.niosh.gov,  www.dol.gov, & www.bls.gov

Ohio Bureau of Workers’ Compensation: www.ohiobwc.gov   

www.healthyworkplace.com : contains articles on creating and managing a healthy workplace.

www.ergonomics.com.au : excellent information on ergonomics, including practical advice on how to sit at a computer, avoiding overuse strain, and setting up an office.

www.nationalwellness.org : contains extensive information on general wellness topics.

www.welcoa.org : site for the Wellness Councils of America, listing extensive information and resources.

www.awhp.org : network of professionals sharing methods, processes and technologies for workplace health promotion.

www.wellcorp.com and www.staywell.com: workplace health promotion consulting firms.














1 OSHA website: www.osha.gov

2 Ashford, Nicholas. Crisis in the Workplace: Occupational Disease and Injury. Cambridge, Mass: MIT

Press; 1976, p. 46.

3 ib id, p. 3.

4 www.osha.gov

5 The Ultimate 20th Century Cost Benefit Analysis and Report March 2000. University of Michigan Health

Management Research Center, p.21.

6 Goetzel RZ. et al. Health Care Costs of Worksite Health Promotion Participants and Non-Participants. Journal of Occupational and Environmental Medicine. 1998; 40(4):341-346.

7 Tully S. America’s Healthiest Companies. Fortune. 1995; 131(11): 98-100.

8 Burton W.  and Catherine Connerty. Evaluation of a Worksite Based Patient Education Intervention Targeted at Employees With Diabetes Mellitus. Journal of Occupational and Environmental Medicine. 1998;40(8):702-706.

9 Gemignani J. Bringing the Doctor to the (Company) Door.  Business & Health. 1998; 16(5):24-26, 36.

10 Pelletier K. Clinical and Cost Outcomes of Multifactorial, Cardiovascular Risk Management Interventions in Worksites: A Comprehensive Review and Analysis. Journal of Occupational and Environmental Medicine. 1997; 39(12):1154-1169.

11 Goetzel RZ, et al. What’s the ROI? A Systematic Review of Return-on-Investment Studies of Corporate Health and Productivity Management Initiatives. AWHP’s Worksite Health. 1999; 6(3):12-21.

12 The Ultimate 20th Century Cost Benefit Analysis and Report March 2000. University of Michigan Health

   Management Research Center, p.5.

13 ib id. p. 3

14 Burton W et al. The Role of Health Risk Factors and Disease on Worker Productivity. Journal of Occupational and Environmental Medicine. 1999; 41(10):863-877.

14.5 www.bls.gov

15 McCarthy R. It Takes More Than a Phone Call to Manage Demand. Business and Health. 1997; 15(5):


16 The Ultimate 20th Century Cost Benefit Analysis and Report March 2000. University of Michigan Health

Management Research Center, p. 52.

17 Bradford M. Educating Employees Saves Health Care Dollars. Business Insurance. 1996 30(48):16.

18 Vickery DM et al. Effect of a Self-care Education Program on Medical Visits. Journal of The American Medical Association. 1983; 250(21):2952-2956.

19 Campbell S. Better Than the Company Gym. HR  Magazine. 1995; 40(6): 108-110, 112.

20 The Ultimate 20th Century Cost Benefit Analysis and Report March 2000. University of Michigan Health

   Management Research Center, p. 254.

21 www.osha.gov

22 Adams E. Second Stage: Using Macro-Ergonomics to ‘Design Out’ cumulative Trauma Risk. Occupational Health and Safety. 1993;61(7):40, 43-45.

23 Hochanadel CD, Conrad DE. Evolution of an On-Site Industrial Physical Therapy Program. Journal of

   Occupational Medicine. 1993; 35(10): 1011-1016.

24 www.osha.gov

25 Bradford M. Ergonomic Changes Comfort San Jose. Business Insurance. 1998; 32(43): 27.

26 Wright T. Psychological Well-Being and Job Satisfaction as Predictors of Job Performance. Journal of

   Occupational Health Psychology. 2000; 5(1): 84-94.

27 Institute for Work & Health website: www.iwh.on.ca

28 Johnson, P. and Indvik, J. The boomer blues: Depression in the workplace. Public Personnel

    Management.1997; 26(3):359-365.

29 www.dol.gov: Facts and Figures about Drugs and Alcohol in the Workplace, 1998.

30 ib. id.,  p. 4.

31 ib. id. p. 5.



32 The Ultimate 20th Century Cost Benefit Analysis and Report March 2000. University of Michigan Health

    Management Research Center, p. 73.


33 Pelletier K. Clinical and Cost Outcomes of Multifactorial, Cardiovascular Risk Management

   Interventions in Worksites: A Comprehensive Review and Analysis. Journal of Occupational and

   Environmental Medicine. 1997; 39(12):1154-1169.