Wellness Programs Economic Considerations.   

Initially introduced by Halbert Dunn in the 1950’s, wellness became a well-liked buzzword during the late 1970’s and received considerable academic attention in the 1980’s.

Health promotion programs for staff members became more widespread during the following decade, and credible evidence for their economic viability started to be published.

There have now been over 100 published studies on this topic and a number of systematic reviews.

Health risks increase costs.  Medical and health insurance costs escalate with both age and number of risks present.8,10   the number of risks is also strongly related to sick leave absenteeism, Employee’s Compensation costs, short-term disability, and decreased productivity (”presenteeism”).

Early staff member health promotion programs were relatively basic and typically produced a Return On Investment of less than one dollar for every dollar spent operating the health promotion program (Return On Investment = <1 - 1).8

Such wellness programs may  be characterized as “fun-oriented”.  Participation is entirely voluntary, and there is no particular focus on the reduction of specifically identified high risks.

Interventions and activities aren’t personalized, and there’s no emphasis on the management of healthcare costs.  These wellness programs are typically site-based only, lack choices to address all of the major behaviorally-related health risks, and lack multimodal presentation.

Minimal or no incentives are provided to workers for participation, and services to spouses and family members are not available.  Most such wellness programs lack meaningful evaluation.

More conventional wellness programs are “activity-oriented” and have shown an ROI of between 1 – 2.5 and 1 – 3.5.8 These wellness programs may have a greater emphasis on health and risk reduction, although the efforts are relatively broad and not customized.

They may have some generalized emphasis on medical cost management, although not necessarily aimed at specific high risks.  Most are site-based and voluntary, with spouses included only rarely.

Modest incentives could  be utilized to encourage participation.  Formal examination could  be weak.

The newest and most economically viable health promotion programs are “results-oriented” and exemplify the health and productivity management model.  These health promotion programs consistently produce return rates of 1 – 4 or greater within a 12-24 month period.8

Such wellness programs are strongly focused on the reduction of in particular identified high risks and the management of medical costs. They’re typically voluntary, but use strong financial and other incentives to promote participation.

They are multi-component in nature (address all major risks), and have both on-site and virtual modalities of operation.  The interventions are highly targeted and individualized, and offered to spouses in addition to staff members.

For businesses, the cost of providing medical insurance for their workforce is of excellent importance.  Those costs have been increasing at annual rates between 6% and 14%.

Chapman’s 2007 systematic review7 announced an average reduction in health care costs of 26.5% as a result of worker health promotion programs.  His review covered 60 of the most scientifically accurate studies, with an average of 3.77 years of study.

Absenteeism due to illness is another cost driver.  Chapman’s review7 reports an average reduction in sick time of 25.3 percent.   Cost for Employee’s Compensation was lowered by 40.7 percent, and disability costs by 24.2 percent.

There’s also an emerging literature on the costs of presenteeism (reduced productivity).11,13  In one study, every risk reduced through a health promotion program yielded a 9% reduction in presenteeism (and a 2% reduction in absenteeism).11

A lot of corporations have achieved a zero percent increase in healthcare costs across at least brief periods of time.10  Doing so requires 90-95 percent participation of the worker population in focused health promotion programs, with 75%-85 percent of the personnel falling into the low risk category.10

Although robust efforts to lower the risk status of those in moderate or high risk categories must be made, the needs of currently healthy staff must be addressed as well to avoid increases in risk-status.

Given the size of the federal workforce, significant cost savings in the government’s contribution to health insurance premiums for staff members can be achieved when a majority of that population were participating in active wellness programs.

In like manner, improvements in absenteeism, worker’s compensation, disability, presenteeism, and turnover as a result of extensive staff member health promotion programs would yield substantial fiscal benefits for the government.

References

1   Aldana, Steven G.  (2001)   Financial Impact of Health Promotion Programs –   A Comprehensive Review of the Literature.   Am J Health Promotion 15(5) – 296-320.

2   Chapman, Larry.  (1998)   the Role of Incentives in Wellness.  The Art of Wellness  2(3) – 1-8.

3   Chapman, Larry.   (2003)   Biometric Screening in Health Promotion –   is it Really as Important as We Think?  the Art of Health Promotion  7(2) – 1-12.

4   Chapman, Larry.  (2005)   Meta-Examination of Employee Health Promotion Economic Return Studies –  2005 Update.  The Art of Wellness, July/August, 1-15.

5   Chapman, Larry.   (2006)  Staff Member Participation in Corporate Wellness and Wellness Programs –  Precisely how Important are Incentives, and Which Ones work Best?   North Carolina Medical Journal   67(6) –   431-432.

6   Chapman, Larry, Lesch, Nancy, and Passas Baun, Mary Beth.   (2007)   the Role of Wellness Coaching in Company Wellness.   the Art of Wellness, July/August, 1-12.

7   Chapman, Larry.  (2007)   Proof Positive –   an Analysis of the cost-Effectiveness of Company Wellness.  Northwest Health Management Publishing, Seattle, WA.

8   Chapman, Larry.  (2007)   an In-Depth Look at the Economic Evidence for Rewarding Health Behavior Change.   Workshop presentation at the World Research Group “Rewarding Healthy Behaviors for Health Plans and Companys” Conference, Orlando, FL, January 23-24.

9   Edington, Dee.   (2001)   Emerging Research –   A View from One Research Center.  American Journal of Wellness 15(5) –  341-349.

10   Edington, Dee W.  (2007)   Health Management as a Serious Corporation Strategy.  Presentation at the World Research Group “Rewarding Healthful Behaviors for Health Plans and Companys” Conference, Orlando, FL, January 23-24.

11   Pelletier, Barbara, Boles, Myde, and Lunch, Wendy.  (2004)  Changes in Health Risks and Make certain to work Productivity.   Journal of Occupational and Environmental Medicine, 46(7) –  746-754.

12   Pelletier, Kenneth R.  (2005)   A Review and Analysis of the Clinical and Cost-Effectiveness Studies of comprehensive Health and Illness Management (DM)Programs at the Workplace –  Update VI 2000-2004.  JOEM 47(10)1051-1058.

13   DeVol, Ross, Bedroussian, Armen, et.  Al.  (2007)  an Unhealthful America –   the Economic Burden of Chronic Illness.  Report released by the Milken Institute.   www.milkeninstitute.org.

14   Partnership for Prevention.  (2008) Investing in Health –   Proven Wellness Practices for Worksites.   http – //www.prevent.org/images/stories/2008/investinginhealth_finalfinal.pdf.