The Business Case for Wellness Programs
Powerful wellness programs educate employees about healthy choices and provide the support and motivation employees need to make simple, yet impactful behavioral and lifestyle changes to reach their own goals.
Significant results can help employers control health care costs, improve employee productivity and enhance workforce engagement. Wellness programs result in measurable benefits to companies, enhanced recruitment and retention, increased productivity, healthier employees and a positive ROI.
Research shows that the health benefits to specific employees can often begin very quickly, but financial benefits to the employer may take a couple of years to accrue. The best-designed, evidence-based studies suggest that reductions in healthcare expenditures or absenteeism may take up to three years to manifest after program implementation.
Employers would be wise to invest in a comprehensive wellness program early, and wait patiently for the results. Even if a return on investment is not immediate, it is certainly imminent. We recently ran a one-year test study with one of our clients where employees were surveyed before and after program implementation.
Summary program data indicated that across the test population there were statistically significant improvements in body mass index (BMI) and blood pressure (BP).
- 97% of the test population either improved or were stable in BMI
- 77% either improved or were stable in blood pressure
Several key tenets hold true when building and evaluating a successful wellness program.
- Participation and employee readiness or willingness to change matters. Even moderate levels of participation can lead to real returns.
- Adjusting health insurance contributions according to participation or behavioral goals results in much higher participation in wellness programs.
- Continuously incorporate new programs or options to keep people engaged.
- Model programs have participation rates of 60% or higher.
- Use the health risk assessments to identify and shape interventions most likely to improve employees' health risk profiles.
- Provide tailored messages to change behaviors.
- Support self-care and self-management combined with goal setting techniques, reflective counseling and motivational interviewing.
- Address multiple risk factors, but prioritize by risk and ease of behavior change.
- Offer a variety of engagement modalities.
- Provide easy access to programs and effective follow-up.
- Facilitate social support and reinforcement.
- Utilize incentives carefully.
- Create an organizational culture of health with policies and branding to reinforce desired behaviors.
- Plan for the long term because ROI may take up to three years.
Calculating ROI and VOI
The concept of a return on investment (ROI) is central to most business decisions. Many large companies have made the financial investment and taken the time and effort to calculate a return on investment for their wellness programs. A smattering of examples is below:
- An analysis of Johnson and Johnson's health & wellness program showed significant reductions over time in 8 out of 13 health risk measures for participants vs. non-participants.
- Citibank's health management program showed a statistically significant reduction in health risks for employees who participated in more intensive program services. This study estimated an ROI of $4:1.
- The study with the strongest design is the Highmark, Inc. study, and they demonstrated an ROI of $1.65 for every dollar invested in wellness programs, based on medical claims costs. Additionally, the study concluded that the ROI from productivity enhancements was arguably greater than the ROI based on claims costs, suggesting an actual ROI of over $3:1.
- A DC technology firm saw a return on investment of $52 per employee after conducting a two-month workplace weight loss challenge. Employees were encouraged to track daily steps and participate in weekly weigh-ins to monitor their weight over the course of the eight weeks. Total medical costs associated with high BMI dropped 19% as a result of employee weight reduction.
In addition to financial indicators such as reductions in medical claims costs, there are a wider variety of indicators that prove the value of wellness programs (VOI). Examples of these additional measures include participation, screenings, health risk reduction, service utilization, productivity, shareholder value and reputation.
The better corporate wellness programs will use year-over-year changes in health risks in addition to actual numbers such as pounds lost or increase in physical activity, and translate those numbers into estimates of changes in health plan costs or potential cost avoidance. Harder measures of human resources cost categories that could be measured with cooperation and input from the HR department include:
- Health plan claims
- Workers' comp and disability payments
- Turnover and recruitment
The wellness program should take the data received, both self-reported and clinical results, and combine that information with employee surveys to calculate potential cost savings, actual savings and value of investment for its clients. As the healthcare laws shift over the coming months and years, it's important to recognize the role of prevention.
Wellness might not seem like a priority for some employers, but the potential savings are vast. Partnering with an established wellness company can lead to an effective integrated health management solution for companies of all sizes in all industries. The numbers speak for themselves!
About the Author
Fiona Gathright is President of Wellness Corporate Solutions (WCS) http://wellnesscorporatesolutions.com, an award-winning, woman-owned business specializing in customized, high-touch wellness programs. Fiona writes a popular blog Corporate Wellness Insights (http://corporatewellnessinsights.com), is sought after for her expertise in wellness, and serves on the board of the Institute for Human Resources, the Alliance For Workplace Excellence and is a Foundation Associate of Women Business Leaders of the U.S. Health Care Industry Foundation (WBL).