SOURCE: Virgin HealthMiles

Virgin HealthMiles

September 20, 2011 09:43 ET

Corporate America's Looming Balance Sheet Crisis: Virgin HealthMiles Warns Businesses They'll Be in Same Predicament as Cash-Strapped U.S. Government Unless Healthcare Spending Is Managed

Many U.S. Companies Can Expect 25% Drop in Operating Profits in 10 Years Without Immediate Action, Says Virgin HealthMiles Research Team

BOSTON, MA--(Marketwire - Sep 20, 2011) - The nation's debt crisis and Corporate America's profitability have a common enemy: rising healthcare costs. Despite 1.2 trillion in planned budget cuts, U.S. debt remains a record proportion of the country's GDP due to years of spending hikes. Likewise, a cumulative 138 percent increase between 1999 and 2010 in health insurance premiums(1) and associated costs are putting an untenable strain on businesses' bottom lines. Congressional Budget Office director, Douglas Elmendorf, recently stated, "An aging population and rising health-care costs will exert significant and increasing pressure on the budget in the years beyond 2021." If the CBO is worried about the impact of rising healthcare costs on the U.S. balance sheet, businesses should be concerned about the impact on their books too, says Virgin HealthMiles. Otherwise they'll face a profitability crisis of record proportion driven by healthcare costs.

Medical science has historically focused on dealing with pathogens. In modern times, healthcare problems often stem from behaviors that are driving the demands on our healthcare system. Unless health policy and business priorities shift to focusing on prevention and helping employees make better health decisions, the financial consequences could be dire:

  • According to the CDC, chronic disease drives 75% of healthcare spending today, of which 95 percent is spent on managing current cases of the disease. Yet just five percent is spent avoiding the onset of these conditions.
  • The Milken Institute reports the lost productivity associated with largely preventable chronic conditions like obesity, hypertension, heart disease and type 2 diabetes totals more than $1 trillion, including time lost for employee and caregiver workdays and individual and caregiver presenteeism.
  • A Virgin HealthMiles research team recently conducted an economic study on the impact of chronic disease on U.S. company profitability and found if the last decade's trends continue and companies don't increase prices or productivity, by 2021 the average company in key industries such as finance and technology can expect to see a 25% decline in operating profits.

"Years of spending to treat preventable chronic conditions has failed to make us healthier as a nation; instead, it's imperative businesses help employees become better 'users' of their bodies and more educated healthcare consumers, starting with the value of prevention," commented Tom Abshire, senior vice president of marketing and member engagement for Virgin HealthMiles. "Otherwise, our research shows companies are poised to take a potentially disastrous hit to their financials, which could threaten any sort of long-term economic recovery for our nation."

Traditional corporate wellness efforts, where employees complete HRAs and self-report biometric and physical activity data, have consistently failed to motivate employees to become better health consumers. Businesses must abandon this wasteful, ineffective spending and focus instead on prevention-focused, technology-based employee wellness solutions that are proven to have an impact and engage employees in long-term behavior change.

By focusing on prevention, employers can improve workforce health and avoid the onset of the costly medical conditions that drive the bulk of today's healthcare spending. With Virgin HealthMiles, employers ensure their employees see the short-term benefits to better health by providing cash or premium discounts. And instead of just hoping an employee wellness program is making an impact, organizations can see their investments are driving real health improvements and lowering healthcare costs thanks to validated data provided by Virgin HealthMiles' technology-based solutions.

Employers have a unique opportunity to align their interests with those of their employees and help them take more accountability for their health. Most U.S. adults spend a third of their lives in the workplace and data shows workplace social connections play a powerful role in driving better health decisions. So before businesses find themselves in the same cash-strapped position as the U.S. government, now's the time to take action.

About Virgin HealthMiles
Virgin HealthMiles provides technology-based employee health programs that pay people to get active. The company's Pay-for-Prevention™ approach, based on physical activity and healthy lifestyle change, attracts an average of 40 percent of employees who participate, which helps organizations reduce medical costs and improve employee productivity and satisfaction. Over 120 industry leaders representing more than 700,000 employees across the U.S, including American Diabetes Association, OhioHealth, Ochsner Health System, MWV, SunGard, SunTrust, and Timberland have selected Virgin HealthMiles' award-winning program for their employees. The company is a member of Sir Richard Branson's Virgin Group. For more information, visit

[1] Kaiser Family Foundation -

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