Wellness Program Return on Investment.

A lot of businesss, as part of their efforts to contain rising health care costs, are implementing 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 wellness programs improve health. When so, do they in turn reduce utilization of healthcare services and reduce healthcare expenditures?

The popular media have done much to promote the theory of corporate wellness. Last year, In Business –  Madison1 magazine printed a story accompanied by a table reporting an impressive range of 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 Business, as reported

Would these Return On Investments 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 colleague review of scientific methods, support the Return On Investments reported here?

Health and Productivity Management

Disease and injury associated with an unhealthful lifestyle or modifiable risk factors is announced to account for at least 25% 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 variety 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 workplace health education, health risk management, and benefit counseling should complement standard health insurance benefits.

The intensity of wellness programs range from bulletin board, pamphlet 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 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 health promotion programs might include courses on health risk reduction and job safety, fitness and exercise activities, fitness center memberships, and reductions in co-payments or premiums for staff members who adhere to advised health testing guidelines.

Along with this, some companys are restructuring health benefits and stimulating employees’ cost-sensitivity when accessing healthcare.5 These changes are intended to reduce employees’ need for and utilization of healthcare, yielding decreased group medical care costs.

Demonstrated reductions in healthcare expenditures should then provide employers 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. Nevertheless, 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 (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 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 (ROI) estimates for the individual wellness programs ranged from $1.49 to $13.7,

o  Aldana reviewed 72 articles and concluded that wellness programs achieve an typical Return On Investment (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 stated that within a 2 year period, Citibank realized a 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 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 announced a selection 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 worker perceptions of the corporation and worker morale, even among nonparticipants.  These outcomes go beyond savings in direct healthcare costs to provide non-health related Return On Investment.

Tailoring health promotion program to maximize ROI Health promotion programs aim to reduce the health risks of staff members 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 in order to achieve optimal risk reduction and costeffectiveness.

In 2001, Univ. of Michigan scientists reported 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 staff 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 people 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 crucial element in achieving positive clinical and cost outcomes in workplace interventions.

Dose-Response?

A few 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 researchers have shown that similar results may 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 popular 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 ordinarily requires three-to five years of health promotion programming.

Future developments

Despite the abundance of positive health promotion program examinations, a few caveats remain. Negative results are less likely to be announced or published, as a result biasing the Return On Investment (ROI) upward.

Uncertainty persists regarding the specific impact of the various wellness program components. But as these wellness programs take hold, further research and evaluation will enable fine-tuning of wellness program investments.

Meanwhile, the preponderance of data and the strength of the published research stand in favor of a positive ROI for health promotion 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 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, 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 businesses, health insurers. Milwaukee Journal Sentinel. August 19, 2004.

4. Chapman LS. Specialist opinions on “best practices” in employee health promotion (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. Specialists urge organizations to promote staff member wellness strategies. Akron Beacon Journal. October 25, 2004.

7. Goetzel RZ, Juday TR, Ozminkowski RJ. AWHP’s Workplace Health, Summer, 1999.

8. Goetzel, RZ. Absolute Advantage. Washington DC – Health Promotion 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 Wellness 1999; 14(1) –  31-43.

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14. Edington MD, Karjalainen T, Hirschland D, Edington DW. AAOHN J. 2002 Jan; 50(1) –  26-31.

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16. Pelletier KR. American Journal of Wellness. 2001; 16(2) –  107-16.

17. Edington DW. American Journal of Health Promotion 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.