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Organizational Wellness

How Mental Wellbeing Programs Reduce Corporate Healthcare Costs

byWellhub Editorial Team
Last Updated Nov 4, 2024
Time to read: 13 minutes
Workforce emotional health is directly related to health care spending. Here’s how mental wellness can help you drive down costs.

The fast-paced world of corporate America has long viewed employee wellbeing and company profits in competition. If employees are taking care of themselves during the workday, employers fear they must not be productive enough. And if they aren’t operating at max productivity all the time, the company’s performance will suffer.

This line of thinking is quickly crumbling beneath a wave of research that shows employee wellbeing is actually foundational to performance. And with this transformation comes another lesson: Investing in employee wellness can actually save a company money by driving down healthcare spending. 

As things stand right now, mental health services are a significant part of the ever-growing cost of providing employee healthcare. 

Even before the COVID-19 pandemic, it was estimated that nearly 21% of the country was suffering from a mental illness. That’s the equivalent of over 50 million Americans.

Then the pandemic hit, driving up mental health care spending by more than 50% in less than three years. Between March and December of 2020, the initial depths of the pandemic, use of mental health services increased by 22%. And ending lockdowns did not end demand: As of August 2022, utilization of mental health services was still 39% higher than before the pandemic.

Nobody is winning in this situation. Employees are suffering, and employers face mounting healthcare costs. Preventing mental health struggles is better for everyone.

This is where a mental wellness program can help. Supporting the emotional health of workers can improve their wellbeing, driving down your company’s healthcare costs. Here’s how you can start saving with wellness.

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Ignoring Mental Wellness in Your Workforce is Costing You

Chances are, mental health issues are impacting your workforce — even if you haven’t noticed yet.

Contrary to stereotypes, people with mental illnesses can and do have successful careers. An estimated one in six people experience mental health issues in the workplace, and 46% of Americans will meet the criteria for a diagnosable mental health condition in their lifetime.

Despite how common this experience is, it’s incredibly unlikely your employees will mention their struggles. Only 13% of employees say they feel comfortable discussing their mental health in the workplace.

This is a costly situation for employers. Companies spend more than twice as much on employees who make a mental healthcare treatment claimthan those who do not use mental healthcare. This is the case with knowledge, service, and industrial workers alike. As revealed in a report by Big Health on the cost of mental health, knowledge “employees suffering from insomnia or anxiety are costing companies over 2.5 times as much as their healthy counterparts on average; a staggering difference of$7,927 per employee.”

Such costs weathered by employers can add up over a wide range of care. Consider anxiety disorders. These are common forms of mental illness, impacting an estimated 40 million U.S. adults. Medications account for 50% of those costs, while another 25% are attributed to ambulances. Emergency room visits are among the most expensive healthcare services, and one out of every eight emergency room visits involves a mental health or substance abuse disorder.

Nationwide, average spending on anxiety and mood disorders was $1,374 per person as early as 2007. If medical inflation kept pace with regular inflation, that would be about $2,040 in today’s dollars for each person in your workforce. However, since medical inflation generally outpaces the rest of the economy, the figure is likely even higher.

And the costs don’t end there. Struggling with mental health can cause additional healthcare issues. People with depression have a 40% higher chance than the general population of developing a heart condition or metabolic dysfunction, for example. When depression is severe, they are twice as likely to experience these issues. That can cause healthcare costs to cascade over time. 

The well-established and rising demand for mental health treatment is why about nine out of 10 healthcare plans are actively recruiting mental health care providers. 

You can get ahead of the curve by rolling out a mental wellbeing program that makes your employees' lives better and — ultimately — saves your company money. Here’s what they are, and how they work.

What are Employee Mental Wellness Programs?

Mental wellness programs are corporate initiatives that provide resources and support to employees so they can improve their emotional health. They usually include a combination of classes and apps, stress reduction activities, and wellness education. Some companies also offer physical fitness initiatives or workshops on topics like meditation or sleep.

They differ from including mental health coverage in your employee benefits package. Traditional benefits cover the cost of therapy and medication when diagnosed by a physician, but they don't offer more accessible options for those that want to actively manage their mental wellbeing as a preventative measure to prevent the more chronic issues that will require more intensive treatment.

Interest in and use of emotional health supports are growing in popularity. The global market for mental health apps, for example, was estimated to be $5.19 billion in 2022. In the next ten years, that  figure is expected to grow to $26.26 billion.

Corporate emotional health initiatives — like covering the cost of wellness app subscriptions — can help make such services more affordable and accessible.

How Employee Mental Wellness Programs Can Reduce Healthcare Costs

You’re already paying a lot for healthcare. When that’s the case, it’s easy to feel like tacking on an additional wellness program digs further into your profits.

But that’s not reality.

Nine out of ten companies that track the financial impact of their wellness programs actually see a positive return on investment. Decreased healthcare spending is a critical part of that equation.

Examples of Costs Savings from Emotional Health Programs

Consider these cost-effective tools and tactics when designing a program to improve the mental wellbeing of your workforce while reducing spending.

Stress Management

Stress is endemic in the modern work environment: 96% of workers experience stress during the workday, and nearly a third say they are either ‘extremely’ or ‘very’ stressed. The health impact of all that stress is so severe that The Centers for Disease Control and Prevention considers work stress “the leading workplace health problem and a major occupational health risk, ranking above physical inactivity and obesity.” 

Building a healthy work environment can help create a low-stress environment. Stress management programs can contribute to decreasing tension in your workforce, ultimately driving savings. One multi-year analysis of a company wellness program — which included stress management classes and advice — returned $1.65 in healthcare savings for every $1 invested. 

A great example of a stress management program is Thrive Global — a part of the Wellhub network — which battles burnout through behavior change coaching, stress management, and focus improvement.

Anxiety Reduction

As previously mentioned, anxiety is the most common mental health struggle in the United States. While stress and anxiety are often spoken of together, they are different. Stress is a short-term reaction to a event, while anxiety is a persistent state of worrying — even without an actual cause. 

Given the prevalence of anxiety, it’s unsurprising that a full quarter of the growing mental health app market is dedicated to depression and anxiety. Research shows such app-based anxiety interventions can effectively decrease the amount of anxiety people experience. A three-year study of anxiety and depression interventions across 66 employers in 40 states found savings across all wage groups. At six months, the savings for a minimum wage employee was $3,440. 

Apps available on the Wellhub platform like Rootd can help employees stop anxiety and panic with therapist-approved tools, guided meditation, and soothing sounds. 

Meditation

Meditation can help with a wide variety of emotional struggles, from stress and sleep disruption to depression and anxiety. When practiced consistently, it can significantly drive down healthcare spending. 

As discovered by a Harvard study of a mind-body relaxation program, the amount of medical services participants needed decreased by more than 40%. Research concluded “that such yoga and meditation programs could translate into health care savings of anywhere from $640 to as much as $25,500 per patient each year.”

And when the health insurance company Aetna offered free yoga and meditation programs to its employees, participants saw reductions in stress and pain, and improved sleep. The company estimates the program had an 11:1 return on investment.

Companies looking to leverage meditation can offer a series of guided meditation sessions, either in-person or over video calls. Meditation apps are also increasingly popular, making subscriptions to apps like Wellhub partners Headspace or Calm valuable tools for any team.

Gym Memberships

Physical activity is a critical part of mental wellbeing. This is thanks to exercise’s ability to decrease depression and anxiety while improving mood and cognitive function. 

During the pandemic lockdown, people were forced to stay inside for prolonged periods of time. Many people significantly reduced their activity level, and becoming sedentary during pandemic lockdowns became a leading predictor of developing common mental disorders. This collective experience changed how people think about exercise: Pre-pandemic, the most common reasons people worked out were to control weight and feel good. Post-pandemic, exercise goals shifted to stress reduction and improved mental health.

From an employer’s perspective, people who don’t exercise have 57% more poor mental health days in the last month than those who do work out. Cardio and working out at the gym can reduce the number of poor mental health days by more than 20%. Exercise has also been shown to decrease the likelihood of dementia, which is increasingly important given the country’s aging workforce. 

Research shows companies can use movement to improve the mental wellbeing of their workforce. In a 50-day study of a corporate steps challenge, participants were found to experience an 18% reduction in stress and a 13% reduction in anxiety, as well as an increase in overall wellbeing.

Sleep Aids

Sleep is foundational to mental health. A single night of bad sleep can increase irritability, while chronic poor sleep has been linked to increased rates of depression and suicide. 

Despite how critical sleep is, two out of three adults don’t get enough of it. Sleep disorders are so common (and costly) in the U.S., in fact, we spend an estimated $94.4 billion each year treating them. 

Sleep apps — like the Wellhub partners Zen App or Sleep Cycle — offer employees an easy way to track the quality and quantity of their sleep, and provide guidance on how to make improvements. Savvy companies can offer these apps to their employees, which in turn, could improve the overall mental wellbeing of their workforce. During a 30-month study of employees, sleep app users had 28% lower healthcare costs, 93% lower inpatient medical costs, and 79% fewer days in acute in-patient care. This produced a savings of $1,677 in annualized healthcare costs per employee.

Key Features of an Effective Mental Wellness Program

Each of the tactics in the section above can reduce healthcare’s drag on your bottom line. But a wellbeing program is more robust than a single session or tool. When looking for a program to promote emotional wellness, look for one with all of these features to maximize its impact. 

Holistic Programming

Wellness is multi-dimensional. Emotional wellness relies on good sleep and exercise as much as on peace of mind. A program that truly supports mental wellbeing supports multiple aspects of wellness in order to provide employees with the various support they need to thrive.

In-Person and On-Demand Programming

Especially in a world of hybrid and remote teams, offering both in-person and on-demand programs makes the initiative accessible to all employees. Some may prefer a knee-to-knee conversation with a provider, while others feel safer to share in a virtual environment. Giving them options enables them to access the support they need anytime, anywhere.

App Integration

Wellness apps are more popular than ever. This is advantageous for distributed teams, as everyone can have equitable access to an app subscription. As an added benefit, they allow employees to access resources in private. This can make it easier for the 87% of workers who do not want to discuss mental health in the office to still benefit from the program. 

Variety of Offerings

No wellness journey is the same. Each of your employees will need a different blend of tools, support, and education to reach a state of mental wellbeing. Look for a program that offers a diversity of programming and tools so there’s something for every employee. 

Start Saving With Employee Mental Wellness

Your employees can access a robust suite of mental wellness services with Wellhub. Our holistic global network includes access to more than 50,000 wellness providers, including Thrive Global, Sleep Cycle, Calm, and access to the best gyms, from popular national franchises like OrangeTheory to your local studio. Users can choose a custom mix of supports to optimize their mental wellness.

More than 15,000 companies trust their employees’ wellness to Wellhub — and we deliver. Research shows using Wellhub improves emotional wellbeing and saves companies money. Our users report higher emotional wellness than non-users, as uncovered in our State of Work-Life Wellness 2024 report. And an analysis of employee healthcare spending for 17,000 employees with Wellhub found the medical bills of active users dropped by up to 35% in one year.

Harness the savings of emotional wellbeing. Speak with a Wellbeing Specialist today!

Company healthcare costs drop by up to 35% with Wellhub! (* Based on proprietary research comparing healthcare costs of active Wellhub users to non-users.) Talk to a Wellbeing Specialist to see how we can help reduce your healthcare spending!

References

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Wellness & Benefits Programs

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Wellhub Editorial Team
Wellhub Editorial Team

The Wellhub Editorial Team empowers HR leaders to support worker wellbeing. Our original research, trend analyses, and helpful how-tos provide the tools they need to improve workforce wellness in today's fast-shifting professional landscape.

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