Wellness Library

Many employers, as part of their efforts to contain rising health care costs, are implementing workplace programs variously described as Corporate Wellness Programs, lifestyle programs, health and productivity management, population health management and, simply, wellness programs.

The purpose of this article is to consider whether such programs improve health. If so, do they in turn decrease utilization of medical care services and decrease medical care expenditures?

The popular media have done much to encourage the concept of employer wellness. Last year, In Business: Madison magazine printed a story accompanied by a table reporting an impressive range of returns on investment (ROI):

Return on Investment (Per dollar ROI for lifestyle programs)
• Coors $6.15
• Kennecott $5.78
• Equitable Life $5.52
• Citibank $4.56
• General Mills $3.90
• Travelers $3.40
• Motorola $3.15
• PepsiCo $3.00
• Unum Life $1.81
Source: 2004 T.E. Brennan Employer, as published

Would these ROIs stand up to thorough empirical analysis of the data? What factors create such disparate returns among these programs? And does the published literature, subject to peer review of scientific methods, support the ROIs published here?

Health and Productivity Leadership

Illness and injury associated with an unhealthy lifestyle or potentially-modifiable risk factors is reported to account for at least 25% of employee medical expenditures. The most significant of these risk factors are stress, tobacco use, overweight or obesity, physical inactivity, excessive alcohol use, and poor nutritional habits. Over the past two decades, a variety of groups at the local, state, and national levels have promoted the concept that health risk reduction and care management programs can improve employee health, and that worksite health education, health risk management, and benefit counseling should complement standard healthcare insurance benefits.

The intensity of Corporate Wellness Programs range from bulletin board, pamphlet or newsletter information to onsite fitness facilities, health risk reduction classes, and personal lifestyle change coaching.3 Corporate Wellness Programs today often include a health risk assessment (HRA) to evaluate each employee’s potentially-modifiable risk factors of disease. Program coordinators then target interventions to those that are at increased risk through personal discussions and individual follow-up.

Comprehensive Corporate Health Promotion Programs may include classes on health risk reduction and job safety, fitness and exercise activities, health club memberships, and reductions in co-payments or premiums for employees who adhere to recommended health care screening guidelines.

Along with this, some employers are restructuring health benefits and encouraging employees’ cost-sensitivity when accessing healthcare.5 These changes are intended to cut employees’ need for and utilization of healthcare, yielding reduced group healthcare costs. Demonstrated reductions in healthcare expenditures should then provide employers with a powerful bargaining chip in negotiating reduced health care insurance premiums during future terms.

Evidence basis: A range of return on investment estimates

The empirical research has produced results as varied as the popular media on return on investment. Nonetheless, evidence continues to grow that well-designed and well-resourced Employee Health Promotion Program and disease prevention programs support multi-faceted payback on investment. Peer-reviewed evaluations and meta analyses show that return on investment is achieved through improved worker health, reduced benefit expense, and enhanced productiveness.

• Goetzel and colleagues, in their meta-analysis of two dozen articles summarizing economic evaluations of health and work rate management programs, reported an average return of $3.14 per $1 invested in traditional Employee Health Promotion Programs. The return on investment estimates for the individual programs ranged from $1.49 to $13.7,8
• Aldana reviewed 72 articles and concluded that Company Wellness Programs achieve an average ROI of $3.48 when considering health care costs alone, $5.82 per $1 when examining absenteeism, and $4.30 when both outcomes are considered.
• Ozminkowski and collagues conducted a 38 month case study of 23,000 participants in Citibank, N.A.’s health management program and stated that within a 2 year period, Citibank realized a return on investment between $4.56 and $4.73.10  Follow-up studies found improvements in the risk profiles of participants, with the elevated-risk group improving more than the “usual care” group11 as a result of more intensive programming.
• Chapman’s 2004 meta-assessment of 42 different studies, ranking central validity of the different studies, reports cost-benefit ratios from $2.05-$4.64.

In addition to immediately quantifiable cost reductions, researchers have published a variety of spin-off benefits: greater work rate, intellectual capacity, and reductions in disability12 and absenteeism.9,13,14,15 Such programs may also have beneficial effects on employee perceptions of the company14 and worker morale, even among nonparticipants. 13 These outcomes go beyond savings in direct healthcare costs to provide non-health related ROI.

Tailoring program to maximize ROI Company Health Promotion Programs aim to lower the health risks of workers at high risk while maintaining the health status of those at low risk. A variety of disease management interventions are available to fit the specific risk profiles of various worksites. Insurers and companies now seek to calibrate their interventions in order to achieve ideal risk reduction and costeffectiveness.

In 2001, University of Michigan researchers reported on stable trends in medical costs for over 2 million current and former staff members in an 18 year data set. The mean cost increase per risk factor gained ($350) was found to be more than double the mean cost decrease per eliminated risk factor ($150). In other words, increases in costs when groups of staff members moved from low risk to high risk were much greater than the decreases in costs when groups moved from high risk to low risk. Their conclusion: Programs designed to keep healthy people healthy will likely provide the greatest return on investment.

On the other hand, Pelletier’s meta-analysis16 and other program evaluations18 suggest that individualized risks reduction for high-risk employees within the context of comprehensive programming is the essential element in achieving positive clinical and expenditure outcomes in workplace interventions.

Dose-Response?

Several factors might affect the effect of various programs and the ultimate ROI, including cultural and environmental factors, workforce demographics, level of participation and longevity of the program.

Most cost-benefit studies have been conducted in sizable employers with more than fifty employees. But researchers have shown that similar results have the potential to be obtained by small employers with as few as five employees actively involved in a well-managed program.

Various research studies also suggest that even relatively modest levels of participation have the potential to achieve substantial program effect. Contrary to reports by the popular media that such programs require more than 70% participation, published reports of at least one case showed positive ROI with 51% participation.

Length of intervention appears to be a more salient variable: an effect on medical costs generally requires three-to five years of programming.

Future developments

Despite the abundance of positive program evaluations, several caveats remain. Negative results are less likely to be reported or published, thus biasing the return on investment upward.

Uncertainty persists regarding the specific influence of the various program components. But as these programs take hold, further research and evaluation will enable fine-tuning of program investments.

Meanwhile, the preponderance of data and the strength of the published research stand in favor of a positive ROI for Employee Health Promotion Programs. Indeed, the employer case for such programs is now well enough defined that some insurance brokers offer discounted rates to businesses that institute or subscribe to wellness programs.

Future questions will focus on how best to combine inclusive and focused interventions, the intensity of components, and how to calibrate the dose-response model to achieve a target ROI. Here, employers, staff members, and researchers will need to collaborate to define mutual goals in terms of both clinical and expenditure outcomes.

Tags: Corporate Wellness, health, medical, Wellness Library

This entry was posted on Thursday, July 30th, 2009 at 3:18 am and is filed under Corporate Wellness, Wellness Library. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.