Posted by Health Wellness | Posted in Health And Wellness In The Workplace | Posted on 23-07-2009
Many employers, as part of their efforts to contain rising medical care expenditures, are launching workplace programs variously described as Company Wellness Programs, lifestyle programs, health and work rate 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 promote the concept of business 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 Company, 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 reported here?
Health and Productivity Leadership
Illness and injury associated with an unhealthy lifestyle or modifiable risk factors is published to account for at least 25% of employee health care 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 are able to better employee health, and that worksite health education, health risk management, and benefit counseling ought to complement standard healthcare insurance benefits.
The intensity of Corporate Health Promotion Programs range from bulletin board, pamphlet or newsletter information to onsite fitness facilities, health risk reduction classes, and personal lifestyle change coaching.3 Corporate Health Promotion Programs today frequently include a health risk assessment (HRA) to evaluate each employee’s modifiable risk factors of disease. Program coordinators then target interventions to those that are at increased risk through personal discussions and individual follow-up.
Complete Employee Wellness 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 staff members who adhere to recommended healthcare assessment ground rules.
Along with this, some employers are restructuring health benefits and encouraging employees’ cost-sensitivity when accessing medical.5 These changes are intended to lower employees’ need for and utilization of medical, provideing reduced group medical expenditures. Demonstrated reductions in medical expenditures ought to then provide employers with a powerful bargaining chip in negotiating decreased health 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 Workplace Wellness 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 productiveness management programs, observed an average return of $3.14 per $1 invested in traditional Workplace Health Promotion Programs. The ROI estimates for the individual programs ranged from $1.49 to $13.7,8
• Aldana reviewed 72 articles and concluded that Corporate Health Promotion Programs achieve an average ROI of $3.48 when thinking of medical 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 high-risk group improving more than the “usual care” group11 as a result of more intensive programming.
• Chapman’s 2004 meta-evaluation of 42 research studies, ranking central validity of the research studies, reports cost-benefit ratios from $2.05-$4.64.
In addition to immediately quantifiable expenditure reductions, researchers have stated a variety of spin-off benefits: greater productiveness, intellectual capacity, and reductions in disability12 and absenteeism.9,13,14,15 Such programs may also have positive effects on employee perceptions of the company14 and worker morale, even among nonparticipants. 13 These outcomes go beyond savings in direct medical expenditures to support non-health related ROI.
Tailoring program to maximize ROI Employee Health Promotion Programs aim to cut the health risks of employees 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 businesses now seek to calibrate their interventions in order to achieve optimal risk reduction and costeffectiveness.
In 2001, University of Michigan researchers stated on stable trends in medical expenditures for over 2 million current and former workers 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 expenditures when groups of workers moved from low risk to high risk were much greater than the decreases in expenditures 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 staff members within the context of inclusive programming is the essential element in achieving beneficial clinical and cost outcomes in workplace interventions.
Dose-Response?
Several factors might affect the influence 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 big corporations with more than fifty employees. But researchers have shown that similar results have the potential to be obtained by small corporations 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 influence. Contrary to reports by the popular media that such programs require more than 70% participation, published reports of at least one case showed beneficial return on investment with 51% participation.
Length of intervention appears to be a more salient variable: an impact on healthcare expenditures generally requires three-to five years of programming.
Future developments
Despite the abundance of beneficial 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 assessment 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 Company Wellness Programs. Indeed, the company case for such programs is now well enough defined that some insurance brokers offer discounted rates to companies that institute or subscribe to wellness programs.
Future questions will focus on how best to combine inclusive and focused interventions, the intensity of elements, and how to calibrate the dose-response model to achieve a target return on investment. Here, employers, staff members, and researchers will need to collaborate to define mutual objectives and goals in terms of both clinical and cost outcomes.