An increasing number of employers offer health and productivity management programs designed to improve the health and well being of their employees. These programs often include a Health Risk Appraisal (HRA) survey and onsite biometric screening. Ideally, the results obtained from the HRA and the biometric screening will point individuals toward onsite or off-site fitness centers, lifestyle health coaching, and/or disease management programs to help them manage or increase their health and productivity.
Health and productivity management programs are increasing in popularity, both in terms of offerings and enrollment, but justifying program costs to senior management can be challenging. Inherent in this financial investment by an employer is the expectation that the health of your employees will improve over time, thereby saving health care expenses and increasing worker productivity.
To justify your health management program, you must be able to demonstrate that your program is improving employee risk profiles and then on the road to becoming cost-effective over time. This requires a defined measurement and evaluation strategy. A first step in defining that strategy is to list the goals and objectives of the program.
To make progress toward achieving those goals and objectives, one must then identify and review metrics that track the progress of the program and help you make appropriate adjustments as needed over time. This article focuses on four key areas that should be considered when evaluating the effectiveness of your program.
- Program Design/Management
- Health Impacts
- Financial Outcomes
- Return-On-Investment Calculations
When evaluating the effectiveness of your health management program, one of the first considerations should be to take an honest look at its design. While you or your predecessor surely had the best intentions in mind when designing it, many factors have likely changed since its inception. For best results, we recommend tailoring the design of your program to the demographics and cultural characteristics of your workforce.
Speaking generally, most successful programs target common health risks related to smoking, eating, drinking, and exercise habits. Some, though not as many, also add a focus on sleep habits. Other risks related to blood sugar, blood pressure, and cholesterol levels should be considered, as should risks related to stress and depression.
Generally, younger, healthier employees can benefit from a focus on maintenance programs that typically include options for physical activity, healthy eating, and depression /stress screening and management. Older or higher-risk populations may need more risk reduction efforts or disease management opportunities to screen for and address common afflictions that tend to worsen over time, such as diabetes, heart disease, and high blood pressure.
Both types of employees may benefit from ergonomic programs meant to avoid back problems, repetitive motion syndromes, and other problems that can be easily avoided. Today's most visionary employers are also integrating their health and productivity management and safety programs, because evidence suggest that those with more health risks are more likely to have workplace accidents or other safety concerns.
Engaging the population:
Health, productivity, and safety impacts ultimately reflect the effectiveness of program engagement strategies. Sustainable engagement efforts that yield high levels of repeat participation are essential to maximizing program impact. The best way to achieve this is by routinely reviewing your communication strategies, employee incentives, and outreach effectiveness.
Furthermore, we recommend that you examine the characteristics of program participants and non-participants to learn whether the program is attracting those in need and better understand why others are not participating in it. Active, vocal, and visible senior management participation and efforts by local site program champions to promote the program may significantly enhance participation rates.
In addition to examining your communication strategies, it is important that you examine the performance of the program itself. This should include a review of eligible employees, engagement methods, program duration, program effectiveness and longer-term success in the health management of targeted populations.
Such an evaluation should include routine monitoring and review of company-sponsored and vendor-sponsored communication strategies, enrollment rates, weeks or months spent in the program, referral patterns into and out of the program, and an assessment of what happens as the program is used and after it is completed. Additionally, repeat health risk assessment surveys and repeat analyses of medical and pharmacy data can be used to estimate changes in health risks and health status over time.
Short-term and longer-term cost trends should be monitored. Findings should be documented and the methods used to generate those findings should be noted in detail so that all stakeholders understand the design, operations, and effectiveness of the program. They can then offer their perspectives to help improve it.
Changes in targeted health risks, such as those related to smoking, eating, drinking, sleep, and exercise habits, provide early evidence for program impact. Some individuals will reduce these risks; others will remain unchanged and some individuals will increase their health risks, even with a good program. The ultimate success of health management programs will be determined by their ability to help individuals reduce at least some of their health risks and not worsen others.
Reductions in health risks can help reduce stress and depression, control body weight, reduce blood pressure and cholesterol levels, postpone complications from already existing heart disease or diabetes, and promote other good outcomes that improve the health and productivity of your workforce. Successful programs will also help already healthy individuals remain healthy as they age.
Risk reduction might be the initial focus for a program design, but soon thereafter considerations of relapse prevention and health maintenance will become important to the long-term success of the program. Continuing to monitor risk transitions between low, medium, and high-risk categories can provide information on how successful the program is in maintaining those at low risk including risk relapse and health maintenance.
The associations between lifestyle health risks, medical expenditures, and workforce productivity and safety have been well documented. Numerous studies have shown that changes in medical and productivity-related costs do indeed follow changes in risks over time. To understand risk and cost relationships medical and productivity-related data must be linked to survey data or biometric data that measure health risks.
Biometric data may include blood pressure readings and information about cholesterol levels, blood sugar, and body weight that are measured by medical professionals in controlled settings. Productivity and safety issues can be investigated via analyses of incidental absenteeism, short-term disability, and worker's compensation program use, and by questions about at-work productivity that are asked on the HRA.
Once these data are linked, analyses of their relationships provide evidence of associations between excess health risks, health status and productivity decrements, and associated costs that are borne by the firm and its employees. Generally, as risks increase, costs follow. Evidence suggest that this applies to individual high risk factors such as smoking and stress.
It also applies to having multiple (e.g., 3 or more) risks; thus these are predictors of excess medical and productivity-related problems to come. One way to document that your program is having an impact on medical and productivity cost outcomes of its participants is by tracking cost trends over time for program participants and non-participants.
After the first year or two of program implementation, you should be able to notice medical and productivity cost benefits associated with program participation, particularly in participants in two or more programs. Documenting cost trends over time by participant group (e.g., comparing those who never participated to those who participated in one program and to those who participated in two or more programs) can show whether your programs are associated with reductions in medical, productivity, and safety-related cost trends.
This will provide tangible evidence that your program is an asset to the company. Similarly, it would be useful to work with vendors or other program staff to make sure that participants are taking full advantage of program services in an intensive way, even if only one program service is being used.
Then track trends in health, productivity, and safety metrics over time to see if there is a dose-response relationship (i.e., whether greater intensity of participation is associated with lower costs, higher productivity, more appropriate health care utilization and better health).
Maintaining low risk as a population cost saving strategy:
Perhaps a more efficient approach to managing program costs that often receives less attention is the health maintenance of individuals that are already healthy (i.e., lowest cost group over time). Cost savings are achievable by maintaining good health over time, and by slowing the rate of complications for those who already have disease.
You can evaluate the effectiveness of two complementary strategies by measuring savings associated with risk reduction (changes in costs following reductions in risks) and by measuring savings associated with keeping people at low risk or current levels of risk over time.
Your health management program needs to be economically viable if your corporation is going to continue to support it. A challenge, however, is that realizing financial benefits from health management programs often takes a significant amount of time. As your employees engage in a successful health management program, their knowledge of how to take care of themselves will increase.
The actions they take to reduce risks can yield health improvements that are often not evident at first, but will become evident over several months. The associated financial benefits of risk reduction may take two or more years to offset program costs, especially if the fixed costs of getting started are high.
While there are certainly exceptions, in our experience one should not uniformly expect a positive return on investment after only one year of program experience. Killing the investment in health and productivity management programs because the ROI has not been observed in year 1 may be counterproductive to better health and productivity in the future.
When the ROI calculations are done, many employers calculate a benefit/cost ratio (which is often referred to as the ROI ratio) to estimate the impact of health and productivity management programs. This ratio shows the number of dollars saved or lost for every dollar spent on the program.
ROI ratios larger than 1.0 provide evidence of financial benefits that exceed costs per dollar spent.It is also useful to calculate the net present value (NPV) of your investment, which is defined as the difference in dollars saved or lost that are associated with participation and the costs of offering your program.
NPV values that are greater than $0 provide evidence of net savings associated with the program, using a total dollar view. The process of calculating both metrics should account for as many factors that influence cost trends as possible, in addition to the extent of program participation.
These factors typically include age, gender, health plan characteristics, and where employees are located (since there are big geographic differences in the cost of medical care and in employee wages and other productivity-related factors). The pre-existence of chronic medical and behavioral conditions (i.e., problems that were evident before the program was in place or significantly modified) should also be accounted for before calculating the ROI and NPV metrics.
If these adjustments are made, the ROI and NPV metrics will be more accurate. There are many ways to make these adjustments as calculations are done. Statistical approaches can be used to do this, such as propensity score matching or weighting, or other forms of regression analyses. Analytic expertise can be readily found in leading universities or health care information companies.
In summary, as more employers consider the implementation of health management programs, we recommend paying particular attention to the design and the evaluation of your program. A carefully designed program is more likely to succeed. The careful and timely evaluation of your program will increase the efficient and effective use of program resources, thereby maximizing the program's impact and longer-term success.
Shirley Musich, Ph.D. is a Senior Researcher in the Health Care Innovation and Information Group at Ingenix, where she is responsible for providing decision support to lead employers and other Ingenix clients through health evaluation, strategy design, intervention, measurement and evaluation processes.
Dr. Musich has published numerous research articles in her research area of interest which focuses on the associations between participation in health promotion, risk reduction, and disease management programs, and their effects on health status (health risks) and medical and productivity cost outcome measures. Dr. Musich received her Ph.D. in Kinesiology from the University of Michigan in 1998.
Ron Ozminkowski, Ph.D. is Vice President, Research and Development, in the Health Care Innovation and Information Group at Ingenix, and he also serves as Vice President, Research and Policy for UnitedHealth Group Alliances. Dr. Ozminkowski has been conducting health services research and evaluation projects since 1983.
He is internationally recognized as an expert in the evaluation of corporate wellness and disease management programs, and has published widely on these and related issues. Dr. Ozminkowski received his Ph.D. in 1989 from the University of Michigan, School of Public Health, with an emphasis in health economics.
Kevin Hawkins, Ph.D. is a Senior Director at Ingenix where he is responsible for day-to-day operations of the research group. Dr. Hawkins has over 20 years of experience designing, conducting, and managing health services research specifically in the areas of health-economic, quality-of-life, disease burden, pharmacoeconomics and retrospective database analyses.
Dr. Hawkins has authored over 40 peer-reviewed journal articles and presentations, and is a reviewer for several medical-scientific journals. Dr. Hawkins received his Ph.D. in Health Economics from Wayne State University.
Frank Bottone, Jr., Ph.D. is a Senior Publications Medical Writer at Ingenix. Dr. Bottone received his Ph.D. degree from the interdepartmental program in Nutrition, at North Carolina State University in Raleigh, NC, where his research focused on the chemo-preventive effects of dietary and other compounds. In addition to publishing numerous scientific articles in peer-reviewed journals, Frank is the author of two books and over a dozen magazine and newspaper articles.