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nWellness programs in the workplace (General Motors Corporation).Thiscase study analyzes incentives for corporate purchasers of health care to invest inwellness programs to improve employees’ and dependents’ health status. Modifyinghealth risk behavior is believed to be among the most effective ways to reduce avoid-able morbidity and mortality. LifeSteps, a joint United Auto Workers (UAW)–Gen-eral Motors (GM) health promotion program, was started in April 1996 and contin-ues to the present.GM self-insures health care for its 1.25 million employees, retirees, and depend-ents. In 1994 GM examined the patterns of use among its employees and projecteda 25 percent increase in medical spending over ten years, based strictly on demo-graphics of the employed population (increases in prices and advances in technol-ogy were not included). The major opportunity for GM from this program is re-ducing the rise in health care spending. LifeSteps participants undergo a healthrisk appraisal and are classified as low, medium, or high risks. GM calculates ex-cess costs as the difference in spending for those in the two higher- risk groupscompared with those in the low-risk group. An estimated 26 percent of total costsis attributable to excess risk. In addition to reducing health spending, GM estimatesan opportunity for savings of $350,000 per plant annually in absenteeism costs.GM originally intended LifeSteps to be available only to its enrollees in tradi-tional FFS or preferred provider organization (PPO) coverage, because this is thegroup for which GM pays medical costs directly, but it ultimately extended theprogram to include those enrolled in HMOs as well. LifeSteps has two levels, basicand intensive, and each level has multiple components. An evaluation study indi-cated an increased migration of 3 percent of patients annually to low-risk status inthe two communities that are piloting the intensive level versus the basic level.Migration to low-risk status for a typical age distribution of 1,000 employees isestimated to save $53,165, or about $53.16 per employee. These savings recur ineach year that the employee remains in the low-risk tier. Unfortunately, data onthe cost of the program were not available to the case-study team, making it im-possible to calculate the benefit-to-cost ratio. In this case, the investor is the sameentity as the payer (the employer), allowing short-term savings to be realized. Thelonger-term payoff is again elusive, as the employee may become the financial re-sponsibility of another employer or payer (such as Medicare) in the future.Lessons From The Case StudiesnFour initial questions.In an initial overview of the case studies, four ques-tions emerge that help organize the formulation of policy implications.