A lot of employers, as part of their efforts to contain rising healthcare costs, are starting wellness programs variously described as wellness, lifestyle programs, health and productivity management, population health management and, simply, wellness programs.
The purpose of this article is to consider whether such health promotion programs improve health. If so, do they in turn reduce utilization of healthcare services and reduce healthcare expenditures?
The well-liked media have done much to promote the theory of employee health promotion. 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 ROI for lifestyle programs)
o Coors $6.15
o Kennecott $5.78
o Equitable Life $5.52
o Citibank $4.56
o General Mills $3.90
o Travelers $3.40
o Motorola $3.15
o PepsiCo $3.00
o Unum Life $1.81
Source – 2004 T.E. Brennan Corporation, as reported
Would these Return On Investments stand up to rigorous empirical analysis of the data? What factors produce such disparate returns among these wellness programs? and does the published literature, subject to peer review of scientific methods, support the Return On Investments reported here?
Health and Productivity Management
Illness and injury associated with an unhealthy lifestyle or modifiable risk factors is stated to account for at least 25% of employee healthcare expenditures.
The most meaningful 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 concept that health risk reduction and care management programs can improve worker 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 onsite 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 disease. Program coordinators then target interventions to those that are at increased risk through personal communications and individual follow-up.
Comprehensive health promotion programs may 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 staff members who adhere to recommended medical screening guidelines.
Along with this, some corporations are restructuring health benefits and encouraging employees’ cost-sensitivity when accessing healthcare.5 These changes are intended to reduce employees’ need for and utilization of healthcare, yielding lowered group health care costs.
Demonstrated reductions in health care expenditures should then provide companys with a powerful bargaining chip in negotiating lower 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 wellness and disease avoidance programs provide multi-faceted payback on investment.
Colleague-reviewed investigations and meta analyses show that ROI is achieved through improved worker health, decreased benefit expense, and enhanced productivity.
o Goetzel and colleagues, in their meta-analysis of two dozen articles summarizing economic evaluations of health and productivity management programs, found an average return of $3.14 per $1 invested in traditional health promotion programs. The Return On Investment estimates for the individual health promotion programs ranged from $1.49 to $13.7,
o Aldana reviewed 72 articles and concluded that 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.
o Ozminkowski and collagues conducted a 38 month case study of 23,000 participants in Citibank, N.A.’s health promotion program and announced 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” group1 then of more intensive health promotion programming.
o 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 selection 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 employee perceptions of the company and employee 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 ROI Health promotion programs aim to reduce the health risks of workers 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 worksites. Insurers and organizations now seek to calibrate their interventions for achieve optimal risk reduction and costeffectiveness.
In 2001, University of Michigan scientists 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 decreases in costs when groups moved from high risk to low risk. Their conclusion – Programs designed to keep healthful individuals healthful will likely provide the greatest return on investment.
On the contrary, Pelletier’s meta-analysis and other health promotion program examinations18 suggest that individualized risks reduction for high-risk workers within the context of comprehensive health promotion programming is the vital element in achieving positive clinical and cost outcomes in worksite interventions.
Dose-Response?
A few factors may affect the impact of various wellness programs and the ultimate Return On Investment, including cultural and environmental factors, workforce demographics, level of participation and longevity of the wellness program.
Most cost-benefit studies have been conducted in large businesses with more than fifty staff. But scientists have shown that similar results could be acquired by small businesses with as few as five staff 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 Return On Investment with 51% participation.
Length of intervention appears to be a more salient variable – an impact on health care costs ordinarily requires three-to five years of health promotion programming.
Future developments
Despite the abundance of positive wellness program examinations, several caveats remain. Negative results are less likely to be reported or published, hence 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 investigation 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 Return On Investment for wellness programs.
Truly, the organization case for such wellness 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 to best to combine robust and focused interventions, the intensity of elements, and how to calibrate the dose-response model to achieve a target Return On Investment.
Here, businesss, staff, and scientists will need to collaborate to define mutual objectives for 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. Health Promotion movement gains ground among corporations, health insurers. Milwaukee Journal Sentinel. August 19, 2004.
4. Chapman LS. Expert opinions on “best practices” in employee wellness (WHP). The Art of Health Promotion Newsletter, July/August 2004 – 1-6.
5. Fronstin, P, and Werntz, R. EBRI Issue Brief No. 267, March 2004. Washington, DC – Employee Benefits Research Institute (EBRI).
6. Powell C. Specialists urge companies to promote worker 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 – Wellness Councils of America. Vol 1(8); 2002.
9. Aldana SG. American Journal of Health Promotion 2001; 15(5) – 296-320.
10. Ozminkowski RJ, Dunn RL, Goetzel RZ, Cantor RI, Murnane J, Harrison M. American Journal of Health Promotion 1999; 14(1) – 31-43.
11. Ozminkowski RJ, Goetzel RZ, Smith MW, Cantor RI, Shaughnessy A, Harrison M. The impact of the Citibank, N.A. J Occup Environ Med. 2000; 42(5) – 502-511.
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13. Riedel JE, Lynch W, Baase C, Hymel P, Peterson KW. American Journal of Wellness 2001; 15(3) – 167-191.
14. Edington MD, Karjalainen T, Hirschland D, Edington DW. AAOHN J. 2002 Jan; 50(1) – 26-31.
15. Aldana SG, Pronk NP. J Occup Environ Med. 2001 Jan; 43(1) – 36-46.
16. Pelletier KR. American Journal of Wellness. 2001; 16(2) – 107-16.
17. Edington DW. American Journal of Wellness 2001; 15(5) – 341-349.
18. Leatherman S, Berwick D, Iles D, Lewin LS, Davidoff F, Nolan T, Bisognano M. Health Affairs 2003; 22(2) – 17-30.
19. Erfurt JC, Holtyn K. J Occup Med 1991; 33(1) – 66-73.
20. Serxner S, Anderson DR, Gold D. American Journal of Wellness. 18(4) – 1-6, iii, 2004 Mar-Apr.
21. Serxner SA, Gold DB, Grossmeier JJ, Anderson DR.
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