Wellness Program Blog

For well over a decade, research has been showing the effectiveness of Employee Health and Wellness Programs. For every dollar spent on Employee Health and Wellness Programs, the returns have been cost savings of between $2.30 and $10.10 in the areas of decreased rates of absence, fewer sick days, decreased WSIB/WCB claims, lowered health and insurance costs, and improvements to worker performance and productivity.

 

Statistics do show that Employee Health and Wellness Programs increase worker morale, improve the ability to attract and retain key individuals, all while having more alert and productive staff members. Some Employee Health and Wellness Program return on investment statistics of note:

 

• Canada Life Insurance reported a return of $3.43 on Employee Health and Wellness Program, and an overall Employee Health and Wellness Program return on investment of $6.85 on each corporate dollar invested on decreased turnover (32.4 percent lower), productivity gains and decreased medical claims,

• DuPont’s Employee Health and Wellness Program pilot sites saw a saving of 11,726 disability days and a return of U.S. $2.05 for every dollar invested by the end of the second year,

• The Canadian government’s Employee Health and Wellness Program return on investment was $1.95-$3.75 per worker per dollar spent (as reported by Dr. Roy Shephard),

• Municipal staff members in Toronto, missed 3.35 fewer days in the first six months of their Employee Health and Wellness Program than staff members not enrolled in the program,

• British Columbia Hydro staff members enrolled in a Employee Health and Wellness Program had a turnover rate of just 3.5 percent compared with a Corporation average of 10.3 percent,

• Johnson & Johnson estimated an average saving of U.S. $224.66 per worker per year for the four years examined after the program introduction, with the bulk of the savings being in the third and fourth years,

• Pacific Bell reported that overall rates of absence decreased after starting a Employee Health and Wellness Program,

• Coca Cola report saving $500 every year per worker after starting a Employee Health and Wellness Program, with only 60 percent of their staff members taking part,

• Coors Brewing Co. reported that for each dollar spent on their Employee Health and Wellness Program they saw a $5.50 return, and the staff members who participated decreased their absentee rate by 18 percent, and

• Prudential Insurance Company reported that the benefits costs for staff members taking part in their program were $312, as opposed to $574 for non-members

 

Employee Health and Wellness Program ROI: Fact or Fiction?

 

Employee Health and Wellness Programs … do they provide a strong return on investment? This is a question that we are sure goes through ever company’s mind. HR Magazine addresses the Employee Health and Wellness Program ROI topic in their June 2008 issue.

 

 

Employee Health and Wellness Program ROI: The Bottom Line

 

According to the article, titled “Finding Wellness’ Return on Investment,” determining Employee Health and Wellness Program ROI is not an easy thing to do for companies because it involves a lot of different variables and time.

 

However, the organizations that have taken the time to determine the Employee Health and Wellness Program ROI of their Employee Health and Wellness Programs have found that it is quite significant. Not to mention, the Wellness program’s effect on the improvement of staff member health and the slowing of the rate of their staff member medical care costs.

 

Employee Health and Wellness Program ROI Alliance

 

Employee Health and Wellness Program ROI is such an important part of today’s corporate culture, that several large organizations have come together to form the Alliance for Wellness ROI, Inc. According to the HR Magazine article, The Alliance for Wellness ROI was specifically created to address the lack of consistency in proving the value of Employee Health and Wellness Programs.

 

The alliance, formed by Henry Ford Health Systems, BMW of North America, Kraft Foods Global, Schlumberger Limited and MasterCare Worldwide, strongly believes in showing the value of Employee Health and Wellness Programs and want to develop a standard for how Employee Health and Wellness Programs are measured.

 

Employee Health and Wellness Programs Components

 

According the alliance, the following components should make up an corporate-provided staff member Employee Health and Wellness Program:

 

• Employee assistance Programs
• Disease Management Programs
• Fitness and exercise Programs
• Health risk assessments
• Workplace medical care Programs
• Personal wellness profiles
• Preventive Health Screening and Biometric Testings and immunizations
• Smoking-cessation Programs
• Telephone based Employee Health and Wellness Programs
• Weight Management / Loss Programs
• Self-Care Programs.

Even the best and most innovative employers are experiencing the impact worker well-being on their organizations’ performance.  The bad news is that many of these employers are unaware of the extent to which less-than-optimal staff member health and well-being is impacting workforce capacity and performance.  The goods news is that there is an increasing body of research and practice than may help employers mitigate this often unseen issue and develop significant opportunities for improved workforce attraction, retention and performance!  This article focuses on how businessal leaders may improve physical and financial staff member wellness in the workplace.

 

The Problems of Chronic Disease

 

According to the World Health Organization (WHO), 60 percent of deaths in 2005 could be attributed to chronic disease (cardiovascular disease, cancer, chronic respiratory diseases, and diabetes).1  The largest attributing factors to the chronic diseases include smoking, physical activity, and diet.2  The costs of these diseases are staggering.  For example, if there were a 10 percent reduction in mortality from heart disease and cancer, it could save the US $10.4 trillion annually.3  Further the WHO projects that over 80 percent of the US population will be either considered overweight or obese by the year 2015.

 

The Problems of Financial Distress and Dissatisfaction

 

As hard as it may be to fathom, a 2004 study found that 67 percent of U.S. Workers are dealing with Personal Financial Issues.4 In another study, it was found that these issues may exist in all segments of any workforce, regardless of income, education, or position level.5 Couple these facts with our workforce reality:

 

    * The workforce is aging and demand for professionals in many industries continues to exceed the supply – and will for the foreseeable future.

    * Due to the shortages of quality personnel the stress on our current workforce is increasing.

    * With these workforce shortages, most employers cannot continue to pay spiraling market prices for professionals.

    * Lastly, those personality attributes that make many professionals great caregivers or service-providers also tend to make them less apt to focus on matters of personal financial management.

 

The Return On Investment

 

There are significant reasons why employers should employ Strategies to implement Employee Health and Wellness Programs for their staff members:

 

    * Raise Productivity including reductions in medical care and workers compensation claims, absenteeism, and presenteesism;

    * Lower employer paid medical care and re-insurances premiums; and

    * Raise staff member, physicians and patient satisfaction; and

    * Raise staff retention and productivity.

 

A recent Towers Perrin case study6 found that a ten percentage point improvement on staff member engagement was linked to a 4.6 percentage point improvement on customer satisfaction and revenue growth and labor cost improvements equal to a 2.8 percent impact on controllable margin.  

 

What all this shows is that providing Employee Health and Wellness Programs and incentives is more than just “the right thing to do.”  Rather, there is a profound business case.  As workforce capacity and engagement increase, a bottom-up cultural change takes place in your business.  These changes drive improvements in customer satisfaction, productivity, absenteeism, and presenteesism – all of which drive improvements in profitability.

 

The Course of Change

 

As an employer, you may have a tremendous impact on the health of the community.  Here are a few suggestions on how you may engage your staff members (possibly include flowchart):

 

 1. Define the Plan – Determine if you have the internal resource availability and knowledge to develop a formal Employee Health and Wellness Program.  Many organizations, due to confidentiality legal and other reasons, select to engage outside partners to manage these processes.

 2. Communication – Once you have developed the plan, communicate the plan to all staff members – using multiple media and approaches.

 3. Lead by Example –Begin Employee Health and Wellness Programs at the top (walk the walk).  Give yourselves the opportunity to go through a health risk assessment and a financial assessment.  If you can, communicate your results and your action steps to staff.

 4. Develop incentives for Staff Participation – Here are a couple of financial incentives you may provide staff that are low cost and optimally have a ROI:

             1. Pay staff members to take a risk assessment

             2. Lower employee contributions to medical plan for those with reduced risk of chronic disease and correspondingly raise employee contribution to medical plan for those with increased risk of chronic disease

 

 5. Make available Personal Risk Assessment Counseling – Make available resources that can meet one on one with each staff member to understand their health risks and opportunities

 6. Eliminate Trans-Fat from Your Dietary Offerings – If you have onsite food facilities, and haven’t been required by legislative statute, you should eliminate trans-fatty oils from the staff member and customer meals

 7. Eliminate Smoking Areas for Staff Members – More and more organizations, including large cities, are now banning smoking on their facilities.

 8. Make available Proper Monitoring Programs – Probably the hardest part of the plan, the ongoing monitoring is critical.  Some organizations are large enough to own or build wellness centers – but even then, many staff members feel uncomfortable in using them.  Typically the users of wellness centers are those least in need.  The good news is that there are many external and web-based tools and options that are available today.

 9. Encourage Other Local Businesses to Make available Employee Health and Wellness Programs.  In some cases (e.g. hospitals), there are options where this may even generate revenue and/or deepen relationships with the communities you support.

 

Legal Considerations

 

When thinking about a Employee Health and Wellness Program, one must take into account certain requirements under ERISA, the Internal Revenue Code (Code) and the Public Health Service Act (PHSA). All three laws were amended by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) to provide for improved portability and continuity of health coverage. HIPAA also added Code section 9802, ERISA section 702 and PHSA section 2702, each of which prohibits discrimination in health coverage based on health status.

 

To be a bona fide Employee Health and Wellness Program, the plan must meet the following requirements:

 

    * An individual’s total reward must be limited. A limit of 10 percent to 20 percent of the total cost of employee-only coverage may be appropriate, according to the DOL.

    * The program must be reasonably designed to promote good health or prevent disease.

    * The reward must be available to all similarly situated individuals. The program must allow any individual for whom it is unreasonably difficult because of a medical condition to meet the Employee Health and Wellness Program standard (or for whom it is medically inadvisable to attempt to meet the Employee Health and Wellness Program standard) an opportunity to meet a reasonable alternative standard.

 

1 2005 Preventing chronic disease:  A vital investment. World Health Organization

2 2007 Working Towards Wellness:  Accelerating the prevention of chronic disease.  World Economic Forum

3 2007 The Value of Health and Longevity.  Kevin M. Murphy and Robert H. Topal, University of Chicago

4 2004 Employer/Employee Equation Research on Worker Types, Preferences and Engagement Issues – Concours Group, Age Wave and Harris Poll

5 1997 Neal E. Cutler, Ph.D

6 2003 Talent Report: New Realities in Today’s Workforce – Towers Perrin

Employee Health and Wellness Programs that support staff members and the environment that they work in have been shown to be a good ROI. Employee Health and Wellness Programs may be extensive and sometimes costly. However, there are ways for small employers to make positive changes at little or no cost.

 

Employee Health and Wellness Program: Nutrition Activities

 

Fruit and Vegetable Consumption

 

   1. Make available healthy eating reminders and prompts to staff members via multiple means (i.e. e-mail, posters, payroll stuffers, etc.).

   2. Make available appealing, low-cost fruits and vegetables in vending machines and in the cafeteria.

   3. Make available cookbooks, food preparation, and cooking classes for staff members’ families.

   4. Ensure onsite cafeterias follow healthy cooking practices and set nutritional standards for foods served that align with the U.S. Dietary Guidelines for Americans.

   5. Make available healthy foods at meetings, conferences, and catered events.

   6. Use point-of-decision prompts as a marketing technique to promote healthier choices.

   7. Make available healthy cooking demonstrations that teach skills (i.e. fruit and vegetable selection and preparation).

   8. Make available taste-testing opportunities at the workplace.

   9. Make available staff member-led campaigns, demonstrations or programs.

  10. Make available local fruits and vegetables at the workplace (i.e. workplace farmer’s market or community-supported agriculture drop-off point).

  11. Use competitive pricing (price non-nutritious foods in vending machines and cafeterias at higher prices).

  12. Make available protected time and dedicated space away from the work area for breaks and lunch.

  13. Make kitchen equipment available to staff members.

  14. Make available an opportunity for onsite gardening if possible.

 

Sweetened Beverage Consumption

 

   1. Make water available throughout the day.

   2. Make available appealing, low-cost healthful drink options in vending machines and the cafeteria.

   3. Modify worksite vending contracts to raise the number of healthy options.

   4. Price non-nutritious beverages at a higher cost.

   5. Use point-of-decision prompts to promote healthier choices.

 

Portion Control

 

   1. Label foods to show serving size and/or nutritional content.

   2. Make available food models, food scales for weighing and pictures to help staff members evaluate portion size.

   3. Make available appropriate portion sizes at meetings, workplace events and in the cafeteria.

 

Breastfeeding

 

   1. Support nursing mothers by providing them rooms for expressing milk in a secure and relaxed environment, a refrigerator for storage of breast milk, policies that support breast feeding, and lactation education programs.

   2. Make available flexible scheduling and/or onsite or near-site child care to allow for milk expression during the workday.

   3. Adopt alternative work options (i.e. teleworking, part-time, extended maternity) for breastfeeding mothers returning to work.

   4. Educate personnel on the importance of supporting breastfeeding co-workers.

 

Television & Food Advertising

 

   1. Place TVss in non-eating areas of the workplace.

   2. Limit food advertising in the cafeteria (i.e. print and other media).

 

Wellness Program ROI is a topic of interest to virtually anyone involved in wellness program initiatives.  Most CFO’s fail to see the logic behind health promotion and thus demand that wellness coordinators show some measure of Wellness Program ROI.  Enter one such company that has demonstrated their wellness program ROI and are sharing the information with the world.

Quad/Graphics is a champion of value-based benefit design with reports that its subsidiary, QuadMed, has reduced healthcare costs to approximately $6,800 per employee – 30 percent less than the average similar-sized manufacturer in the Midwest. A member of The Center for Health Value Innovation (www.vbhealth.org), the nation’s premier organization dedicated to establishing value and producing evidence for sustainable health and financial improvement, Quad/Graphics is the largest privately held commercial printer in the world with 10,500 employees and $2B annual sales.

Starting with a small worksite health-care clinic at the Quad/Graphics’ plant in Pewaukee, Wisconsin, QuadMed took the ground-breaking approach of bringing nearly all primary healthcare services in-house – eliminating costly middlemen and burdensome paperwork. Today, QuadMed employs its own medical staff, operates its own laboratory, pharmacy, fitness and rehabilitation centers, and contracts with local hospitals for specialized and advanced care. Employees more actively participate in preventive healthcare and spend fewer days in the hospital.

“Our mission is to control corporate healthcare cost trends by providing a full range of employer-sponsored healthcare services, while enhancing employee healthcare quality through best practice guidelines and protocols,” states Raymond Zastrow, M.D., president of QuadMed and a Fellow of The Center. “Our proactive approach and focus on holistic, evidence-based care is reflected in our operating values.”

The results have been remarkable: in 2006, the total costs for participants fell below the benchmark by 32 percent. QuadMed’s cost for their Lean You! incentivized wellness program of 2005 totaled $240,900 compared to the cost avoidance estimate of $550,000 for early diagnosis of four cases of cancer.

An analysis of corporate healthcare data revealed that obesity was a primary driver of employee healthcare costs, with 82 percent higher Rx costs in the overweight/obese population at Quad/Graphics than in the “normal weight” population; 80 percent higher inpatient costs; and 78 percent higher outpatient costs. The value-based design solution called for Quad/Graphics to remove barriers to care and create incentives to this high-risk group of employees. This translated into eliminating co-pays for weight management expenses or diabetes management.

“These results have earned QuadMed national recognition as a model for other companies concerned with out-of-control healthcare cost trends,” adds Zastrow. “QuadMed now offers this employer-managed healthcare option to other companies nationwide.”

Quad/Graphics has now initiated this program across all its locations, helping to identify potential employee health risks before they occur and subsequently directing employees to an appropriate course of treatment. With decreased utilization of inappropriate services, such as rescue drugs and emergency room visits coupled with a reduction in disability and worker compensation days, QuadMed has reduced the cost trend for Quad/Graphics.

According to Cyndy Nayer, president and executive director of the Center, “The Quad/Graphics experience is another triumph for value-based design. Our members learn valuable lessons from one another and benefit from the ongoing, collegial association.”