The impact of changes in health practices on medical claims costs between 1985-1987 and 1988-1990 was examined among 796 employees.

Employees completed a health risk appraisal in 1985 and 1988 and were categorized into health risk levels.

High-cost status and high-risk status were significantly associated at both times.

The percentage of employees with high-risk status decreased from 31.8% to 25.3% between 1985 and 1988 (P<0.01).

Changes in average costs and the percentage with high-cost status followed the risk change.

The largest increase in average costs occurred in employees who moved from low-risk to high-risk status.

The greatest reduction in average costs occurred in employees who moved from high-risk to low-risk status.

Median costs were not as sensitive to risk change.

The findings provide strong evidence that improving individual health status is associated with financial benefits.