ROI for wellness programs: This data could save your job
ROI for wellness programs: This data could save your job
Savings are sometimes difficult to demonstrate
Health care costs reduced $176 for every employee — a savings of $1.65 for every dollar spent on a comprehensive wellness program. These are the eye-catching numbers that occupational health professionals at Highmark Inc., a Pittsburgh-based health insurer, can point to.1
Showing return on investment (ROI) for wellness programs, whether they involve smoking cessation, weight loss, or fitness, could save your job from being outsourced or your department downsized in today's cost-cutting environment, says Karen Mastroianni, RN, MPH, COHN-S, FAAOHN, co-owner and health and safety strategist for Raleigh, NC-based Dimensions in Occupational Health & Safety.
"If we are not showing the difference that we are making in the lives of employees and how that makes the company a better place to work, then there is the potential of budget cuts — or worse yet, position cuts," warns Mastroianni.
Even with limited time and resources, OHNs must assess the impact of programs, urges Mastroianni. "Just doing something because you believe it to be good or right is not enough," she says. "Often, an OHN provides a program and then realizes that he or she should have planned a method to evaluate it. We always need to consider the impact of services provided — not just for the company, but for our clients."
To determine the ROI of Highmark's employee wellness programs, medical claims of approximately 2,000 participants were compared to claims for a group of nonparticipants with similar health risks. When program costs of $808,403 were subtracted from cost savings during the four-year period of 2001 through 2005, there was a savings of $1,335,524, partly due to reduced inpatient costs and increased use of screenings and medications.
The study's findings countered a common misconception: that research showing ROI for wellness programs only includes employees who are already healthy and motivated. That is simply not the case, according to Brian Day, EdD, one of the study's authors and director of advanced analytics at Highmark.
"I think the most surprising thing was the fact that the high-risk folks also participated," says Day. "This goes against the perception that wellness participants are most often the healthiest in the population."
When evaluating ROI of wellness programs, consider the following:
• Don't underestimate the amount of money actually invested.
Previous studies have shown a much higher ROI for wellness programs, but these don't always factor in all the costs involved, notes Day. The Highmark study factored in costs such as wages and benefits for the fitness center's manager, newsletters, and administrative costs, to determine an accurate per-employee cost for its wellness programs.
"The most important part of ROI calculations is the'I.' [That] is the most challenging thing to determine," says Day. "We believe we were very conservative at $1.65 [savings per dollar spent], because everything was done to cost out what was actually invested in the program."
• Give programs enough time to show their true impact.
"Wellness programs are a challenge to evaluate, because long-term results are required," says Mastroianni. "Many health educators and companies evaluate for only six months or a year out. That's often not long enough, depending on the desired outcome."
Wellness programs do not produce healthy individuals overnight, emphasizes Day. "You have to give the programs time to work," he says. "It is necessary to examine costs over an extended time frame, in order to assess savings and latency of wellness effects."
In fact, costs typically rise during the first year, says Day, possibly due to the employee's awareness of the need to take proper medications and go to the doctor.
• Keep things simple if resources are limited.
You don't need an army of analysts to show the impact of a wellness program, says Mastroianni — often, all that's required is a simple spreadsheet and tracking information.
Ask for assistance if you need help interpreting the data. "Many communities and colleges have experts and student interns available to assist," says Mastroianni. "It truly doesn't take much, as long as it is planned in the beginning and data collection is consistent."
If evaluation is not planned initially, then it's difficult or impossible to identify the goals or targets, and to know what data need to be collected for comparison. "If collecting data is haphazard, then the results will not be accurate," says Mastroianni. "Either they will indicate no apparent impact or too great an impact."
Mastroianni recommends using surveys and follow-up interviews to track weight loss and improvements in eating habits of participants. "Then, depending on the program objectives and expected outcomes, OHNs may need to consider other variables — absentee rates, workers' comp injuries, medical claims, or emergency department visits," she says.
• Don't overestimate outcomes.
Avoid raising expectations too high for programs that are designed to increase awareness and nothing more, such as monthly lunch and learns or annual health fairs.
"These activities are not intended to change behavior," says Mastroianni. "The OHN cannot deduce that just because someone attended a session or came to the health fair, that indicates that the participant will control their blood pressure, quit smoking or lose weight."
Behavioral and environmental programs are needed to change these health behaviors, says Mastroianni. "Spending money on a health fair when the intentions are to demonstrate costs savings may result in disappointing outcomes," she adds.
• Use results to make a case for new programs.
Highmark's findings were used to justify the implementation of new wellness programs, including lifestyle monitoring solutions so participants can accurately measure metabolic expenditure and dietary intake.
"The findings clearly affirm the business case for these programs," says Lisa Scholar, MS, manager of employee preventive health at Highmark. "This certainly gives added support to expand the scope of our programming, and implement employee wellness strategic initiatives that require financial support."
• Don't overlook intangible benefits of wellness programs.
"The intrinsic benefits are extremely important — perhaps more important than the health costs savings," says Mastroianni. "Employees feel better, are happier, and more positive."
The value of health promotion programs goes beyond ROI and savings in health care costs, adds Scholar. "There are a multitude of benefits for implementing wellness programs — healthier and more engaged employees, increased productivity, and reduction of sick days," she says. "Obtaining the return is fantastic, but it isn't the sole justification for implementing worksite wellness."
Identify health risks
How much should you invest in wellness programs? To answer this question, it is "absolutely essential" to survey your population's needs, says Scholar.
Before a wellness program is implemented at Highmark, several sources of data are reviewed, including health risk assessment aggregate data so risk factor prevalence can be taken into account. These steps are then taken, says Scholar:
— It is determined which programs will have the most impact, both clinically and financially.
— An operating and intervention plan is written.
— A budget is created to support the plan.
— The impact is evaluated, to determine what the next steps will be.
"We believe in implementing data-driven programming based on risk," says Scholar. "We also measure and monitor overall participation, as increased participation is associated with risk reduction and cost savings."
Reference
- Naydeck BL, Pearson JA, Ozminkowski RJ, et al. The impact of the Highmark employee wellness programs on 4-year healthcare costs. J Occup Environ Med 2008; 50(2):146-156.
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