Many corporations, as part of their efforts to contain rising healthcare costs, are starting health promotion programs variously described as wellness, lifestyle programs, health and productivity management, population health management and, simply, health promotion programs.
The purpose of this article is to consider whether such wellness programs improve health. When so, do they in turn reduce utilization of health care services and reduce health care expenditures?
The well-liked media have done much to promote the concept of employee wellness. Last year, In Business – Madison1 magazine printed a story accompanied by a table reporting an impressive range of Return On Investment (ROI) –
Return on Investment (Per dollar Return On Investment 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 Return On Investment (ROI)s stand up to rigorous empirical analysis of the data? What factors produce such disparate returns among these health promotion programs? and does the published literature, subject to peer review of scientific methods, support the Return On Investment (ROI)s stated here?
Health and Productivity Management
Disease and injury associated with an unhealthy lifestyle or modifiable risk factors is reported to account for at least 25 percent of worker 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 selection of groups at the local, state, and national levels have promoted the theory 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 health insurance benefits.
The intensity of health promotion programs range from bulletin board, flyer or newsletter information to on-site fitness facilities, health risk reduction classes, and personal lifestyle change coaching.
Health promotion programs today often include a health risk assessment to evaluate each employee’s modifiable risk factors of illness. Program coordinators then target interventions to those that are at increased risk through personal communications and individual follow-up.
Robust wellness programs might include courses on health risk reduction and job safety, fitness and exercise activities, health and fitness center memberships, and reductions in co-payments or premiums for workforce who adhere to recommended biometric screening guidelines.
Along with this, some businesss are restructuring health benefits and stimulating employees’ cost-sensitivity when accessing health care.5 These changes are intended to reduce employees’ need for and utilization of health care, yielding lowered group medical care costs.
Demonstrated reductions in health care expenditures should then provide corporations with a powerful bargaining chip in negotiating lower health insurance premiums during future terms.
Evidence basis – A range of Return On Investment (ROI) estimates
The empirical research has produced results as varied as the popular media on Return On Investment. However, evidence continues to grow that well-designed and well-resourced wellness and disease avoidance programs provide multi-faceted payback on investment.
Colleague-reviewed investigations and meta analyses show that Return On Investment 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 examinations of health and productivity management programs, found an typical return of $3.14 per $1 invested in traditional wellness programs. The Return On Investment estimates for the individual wellness programs ranged from $1.49 to $13.7,
• Aldana reviewed 72 articles and concluded that health promotion programs achieve an average ROI of $3.48 when considering healthcare 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 promotion program and stated that within a 2 year period, Citibank realized a Return On Investment (ROI) between $4.56 and $4.73.10
Follow-up studies found improvements in the risk profiles of participants, with the high-risk group bettering more than the “usual care” group1 as a result of more intensive health promotion programming.
• Chapman’s 2004 meta-evaluation of 42 studies, ranking overall validity of the studies, reports cost-benefit ratios from $2.05-$4.64.
In addition to immediately quantifiable cost reductions, scientists have stated a variety of spin-off benefits – greater productivity, intellectual capacity, and reductions in disability12 and absenteeism.9,13,14,15
Such wellness programs might also have positive effects on staff member perceptions of the corporation and staff member morale, even among nonparticipants. These outcomes go beyond savings in direct healthcare costs to provide non-health related ROI.
Tailoring health promotion program to maximize Return On Investment (ROI) Wellness programs aim to reduce the health risks of employees at high risk while maintaining the health status of those at low risk.
A variety of disease management (DM) interventions are available to fit the specific risk profiles of various workplaces. Insurers and businesses now seek to calibrate their interventions for achieve optimal risk reduction and costeffectiveness.
In 2001, University of Michigan researchers announced on stable trends in health care costs for over 2 million current and former workforce 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 lowers in costs when groups moved from high risk to low risk. Their conclusion – Programs designed to keep healthful people healthful will likely provide the greatest return on investment.
On the contrary, Pelletier’s meta-analysis and other wellness program examinations18 suggest that individualized risks reduction for high-risk workforce within the context of robust wellness programming is the critical element in achieving positive clinical and cost outcomes in worksite interventions.
Dose-Response?
Several factors might affect the impact of various wellness programs and the ultimate ROI, including cultural and environmental factors, workforce demographics, level of participation and longevity of the wellness program.
Most cost-benefit studies have been conducted in big corporations with more than fifty personnel. But researchers have shown that similar results could be acquired by small corporations with as few as five personnel actively involved in a well-managed wellness program.
Various studies also suggest that even relatively modest levels of participation can achieve substantial wellness program impact. Contrary to reports by the well-liked media that such wellness 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 impact on healthcare costs typically requires three-to five years of wellness programming.
Future developments
Despite the abundance of positive wellness program evaluations, a few caveats remain. Negative results are less likely to be announced or published, accordingly biasing the Return On Investment (ROI) upward.
Uncertainty persists regarding the specific impact of the various health promotion program components. But as these health promotion programs take hold, further research and evaluation will enable fine-tuning of health promotion program investments.
Meanwhile, the preponderance of data and the strength of the published research stand for a positive ROI for wellness programs.
In truth, the business case for such health promotion programs is now well enough defined that some insurance agents offer discounted rates to corporations that institute or subscribe to health promotion programs.
Future questions will focus on how to best to combine extensive and focused interventions, the intensity of elements, and how to calibrate the dose-response model to achieve a target Return On Investment.
Here, companys, workers, and scientists will need to collaborate to define mutual goals respecting both clinical and cost outcomes.
Sources –
1. In Business – Madison. Madison, WI – September 2004. p. 39.
2. Anderson DR, Whitmer RW, Goetzel RZ, Ozminkowski RJ, Wasserman J, Serxner S. Health Enhancement Research Organization Committee. American Journal of Health Promotion 2000; 15(1) – 45-52.
3. Manning J. Wellness movement gains ground among companies, health insurers. Milwaukee Journal Sentinel. August 19, 2004.
4. Chapman LS. Expert opinions on “best practices” in employee wellness (WHP). The Art of Wellness Newsletter, July/August 2004 – 1-6.
5. Fronstin, P, and Werntz, R. EBRI Issue Brief No. 267, March 2004. Washington, DC – Staff Member Benefits Research Institute (EBRI).
6. Powell C. Experts urge organizations to promote staff member health promotion strategies. Akron Beacon Journal. October 25, 2004.
7. Goetzel RZ, Juday TR, Ozminkowski RJ. AWHP’s Worksite Health, Summer, 1999.
8. Goetzel, RZ. Absolute Advantage. Washington DC – Health Promotion Councils of America. Vol 1(8); 2002.
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