A lot of companys, as part of their efforts to contain rising health care costs, are beginning 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. 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 concept of company health promotion. Last year, In Business – Madison1 magazine printed a story accompanied by a table reporting an impressive range of Return On Investment –
Return on Investment (Per dollar Return On Investment (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 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 wellness programs? and does the published literature, subject to peer review of scientific methods, support the Return On Investment (ROI)s announced here?
Health and Productivity Management
Illness and injury associated with an unhealthy lifestyle or modifiable risk factors is announced 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 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, brochure or newsletter information to on-site fitness facilities, health risk reduction classes, and personal lifestyle change coaching.
Wellness programs today often include a health risk assessment to evaluate each staff member’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 may include courses on health risk reduction and job safety, fitness and exercise activities, gym memberships, and reductions in co-payments or premiums for personnel who adhere to advised biometric screening guidelines.
Along with this, some businesss are restructuring health benefits and encouraging employees’ cost-sensitivity when accessing health care.5 These changes are intended to reduce employees’ need for and utilization of health care, yielding decreased group medical care costs.
Demonstrated reductions in health care expenditures should then provide companys with a powerful bargaining chip in negotiating lower medical 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 ROI. Nonetheless, evidence continues to grow that well-designed and well-resourced wellness and disease prevention programs provide multi-faceted payback on investment.
Colleague-reviewed investigations and meta analyses show that Return On Investment (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 examinations of health and productivity management programs, found an typical return of $3.14 per $1 invested in traditional wellness programs. The ROI estimates for the individual wellness programs ranged from $1.49 to $13.7,
Aldana reviewed 72 articles and concluded that wellness 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 wellness 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 improving 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 reported a variety of spin-off benefits – greater productivity, intellectual capacity, and reductions in disability12 and absenteeism.9,13,14,15
Such wellness programs may also have positive effects on staff member perceptions of the company and staff member morale, even among nonparticipants. These outcomes go beyond savings in direct healthcare costs to provide non-health related Return On Investment (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 worksites. Insurers and organizations now seek to calibrate their interventions in order to achieve optimal risk reduction and costeffectiveness.
In 2001, University of Michigan scientists announced on stable trends in healthcare costs for over 2 million current and former staff members 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 health promotion program evaluations18 suggest that individualized risks reduction for high-risk employees within the context of extensive health promotion 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 Return On Investment (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 staff. But scientists have shown that similar results can be acquired by small corporations 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 usually requires three-to five years of wellness programming.
Future developments
Despite the abundance of positive health promotion program investigations, a few caveats remain. Negative results are less likely to be stated or published, consequently biasing the Return On Investment 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 in favor of a positive ROI for wellness programs.
Truly, the corporation case for such wellness programs is now well enough defined that some insurance brokers offer discounted rates to organizations that institute or subscribe to wellness 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, corporations, staff, and scientists will need to collaborate to define mutual objectives as for both clinical and cost outcomes.
Sources –
1. In Business – Madison. Madison, WI – September 2004. p. 39.
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3. Manning J. Health Promotion movement gains ground among corporations, health insurers. Milwaukee Journal Sentinel. August 19, 2004.
4. Chapman LS. Specialist opinions on “best practices” in company health promotion (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 – Staff Member Benefits Research Institute (EBRI).
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