Improvement in Americans' health risk profile will save $945 billion

A 25 percent improvement in the health risk profile of Americans would yield savings of up to $945 billion over the next ten years, according to a report - Savings Potential from Prevention and Risk Reduction for the Commercially Insured- released today by the Center for Health Research (CHR) at Healthways (NASDAQ: HWAY).

“This report, and the previously released CHR companion report on potential savings for the Medicare population,s possible; the task for our entire industry is to continue to demonstrate that we can turn that possibility into a proven, replicable and scalable reality”

The principal finding of the report - nearly a trillion dollars of potential cost savings - is based on the application of various risk-reduction scenarios to a rigorous actuarial model of the natural progression of illness and associated cost developed by Ingenix Consulting. Based on the actual five-year (2003-2007) health care experience of over 4.2 million commercially insured individuals, from birth through age 64, Ingenix and CHR scientists applied actuarial science to calculate the estimated cost of healthcare from age 0 to 64, and the predicted impact to this cost from risk-reduction scenarios that represent reduction in the onset or progression of disease-related morbidity.

The report shows that health care costs for individuals born in 2008 will average $243,000 per individual by age 65 (2008 dollars). Preventing an increased level of health risk in only 10 percent of individuals, beginning at age 25, would generate average health care cost savings of $180 for each individual for each year through age 64 across the entire study population. Savings were estimated to reach $470 per individual annually if 25 percent of individuals do not increase in risk from age 25 representing a savings of approximately $945 billion over ten years if applied to the current number of commercially insured population in the US. Savings are even more substantial, reaching over $1 trillion in 10-year savings, if the 25 percent risk reduction scenario is implemented across all ages studied.

The findings of this report provide support for wellness and prevention initiatives and emphasize the importance of such programs that some employers are already providing as a means to achieve meaningful cost reductions by improving employee health.

"Inspiring people to live happier, healthier, more fulfilled lives is at the core of our company's philosophy. Our investment in well-being has paid off five-fold and made our colleagues and company healthier," said Tonya Vyhlidal, Wellness, Safety and Life Enhancement Director at Lincoln Industries. "We've been providing wellness and prevention programs to our employees and their dependents since 1977 and today our health care costs are 40 percent lower than other companies in our region. We also have lower turnover, reduced absenteeism and an engaged workforce, which is priceless."

"As demonstrated by Lincoln Industries, savings over time of the magnitude identified in the CHR report are well within the range of what can be accomplished through comprehensive, integrated well-being improvement initiatives that enhance individual and organizational performance," said Healthways CEO, Ben R. Leedle, Jr. "These initiatives would include such elements as workplace wellness programs, Well-Being Assessments, and fitness, nutrition and smoking cessation programs, chronic care management and support for emotional and social health. The Congressional Budget Office recently noted that 'rising health costs will put tremendous pressure on the federal budget during the next few decades and beyond... [and] the health legislation enacted earlier this year does not substantially diminish that pressure.' The conclusions of the CHR report point to a viable solution to slow health care costs through attainable reduced health risks."

"America is spending 75 percent of its health care dollars on care for those with chronic diseases," said Gary A. Puckrein, PhD, President and CEO of the National Minority Quality Forum. "The availability and utilization of quality health care is essential to improve health status and reduce preventable health care expenditures. To maximize potential savings, however, the American health care delivery and financing system must also place a high priority on increasing the availability and utilization of primary and secondary prevention programs. The research conducted by the Healthways Center for Health Research provides quantifiable evidence of the value of prevention."

"This report, and the previously released CHR companion report on potential savings for the Medicare populations possible; the task for our entire industry is to continue to demonstrate that we can turn that possibility into a proven, replicable and scalable reality," concluded Leedle.