Posted by Worksite Wellness | Posted in worksite wellness programs | Posted on 01-06-2009
Many employers, as part of their efforts to contain rising medical care costs, are implementing worksite programs variously described
as Worksite Wellness , 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 lower utilization of medical care
services and lower medical care expenditures?
The popular media have done much to reward the concept of company 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 Corporation, as reported
Would these ROIs stand up to rigorous empirical analysis of the data? What factors lead to 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 stated to account for at least 25% of employee
medical 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
echelons have promoted the concept that health risk reduction and care management programs have the potential to improve employee
health, and that worksite health education, health risk management, and benefit counseling ought to complement standard health
insurance benefits.
The intensity of Worksite Wellness range from bulletin board, pamphlet or newsletter information to onsite fitness facilities, health risk
reduction classes, and personal lifestyle change coaching.3 Worksite Wellness today often 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 communications and individual follow-up.
Complete Worksite Wellness 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 workers who adhere to recommended medical evaluation standard
procedures.
Along with this, some employers are restructuring health benefits and encouraging employees’ cost-sensitivity when accessing medical
care.5 These changes are intended to lower employees’ need for and utilization of medical care, yielding reduced group medical care
costs. Demonstrated reductions in medical care expenditures ought to then support employers with a powerful bargaining chip in
negotiating reduced health insurance premiums during future terms.
Evidence basis: A range of ROI estimates
The empirical research has produced results as varied as the popular media on ROI. Nonetheless, evidence continues to grow that
well-designed and well-resourced Worksite Wellness Program and disease prevention programs support multi-faceted payback on
investment. Peer-reviewed evaluations and meta analyses show that ROI is achieved through improved worker health, reduced benefit
expense, and enhanced productivity.
- Goetzel and colleagues, in their meta-analysis of two dozen articles summarizing economic evaluations of health andproductivity management programs, observed an average return of $3.14 per $1 invested in traditional Worksite Wellness . The ROI
estimates for the individual programs ranged from $1.49 to $13.7,8
- Aldana reviewed 72 articles and concluded that Worksite Wellness achieve an average ROI of $3.48 when thinking ofmedical 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 healthmanagement program and stated that within a 2 year period, Citibank realized a ROI between $4.56 and $4.73.10 Follow-up studies
observed 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-evaluation of 42 different studies, ranking central validity of the different studies, reportscost-benefit ratios from $2.05-$4.64
In addition to immediately quantifiable expenditure reductions, researchers have stated a variety of spin-off benefits: greater productivity,
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 care costs to support non-health related ROI.
Tailoring program to maximize ROI Worksite Wellness aim to lower the health risks of workers at elevated 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 care costs 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 costs when groups of workers 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 support 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
workers within the context of comprehensive programming is the vital element in achieving positive clinical and expenditure outcomes in
worksite 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 research studies have been conducted in sizable businesses with more than fifty workers. But researchers have
shown that similar results have the potential to be obtained by small businesses with as few as five workers 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 positive ROI with 51% participation.
Length of intervention appears to be a more salient variable: an influence 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 ROI 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 Worksite Wellness
. Indeed, the company 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 comprehensive and focused interventions, the intensity of elements, and how to
calibrate the dose-response model to achieve a target ROI. Here, employers, workers, and researchers will need to collaborate to define
mutual goals and objectives in terms of both clinical and expenditure outcomes.