In my previous posts, I reviewed the following common corporate wellness strategies:
1. Outcomes Based
2. Participation Based
3. Culture of Wellness Based
Clients often ask “What is the ROI on each program, so I can decide which direction to in?” My answer is usually “It depends.” There are several sources that site ROI of 1.2-3.0 as the return on wellness programs. The problem is that there are so many variables, and few industry standards on what defines each component. For example, if you ask clients, health plans, physicians, and individuals “What is wellness?”, you will get a wide variety of different answers. The dictionary defines it as follows:
1. the quality or state of being healthy in body and mind, especially as the result of deliberate effort.
2. an approach to healthcare that emphasizes preventing illness and prolonging life, as opposed to emphasizing treating illness.
Depending on whose point of view you are seeking, wellness is defined in the context of their available knowledge, while vendors are defining wellness in the context of the programs they offer. For example, most health insurance companies categorize wellness into 3 buckets:
1. Lifestyle Modification – this is prevention-oriented, and usually focused on weight, smoking, stress, and physical activity.
2. Health Coaching – this is used to address individuals who have 1-2 risk factors that, if addressed, will prevent the transition to a disease state. These might include dyslipidemia, elevated blood pressure, or BMI of greater than 27.
3. Disease Management – this is when an individual has a diagnosed chronic condition that can be managed with care, but is likely to not revert back to a healthy condition. These are the most costly risk factors that have a high likelihood of advancing to very expensive complications without proper treatment. Some examples are: diabetes, asthma, chronic back pain, cardiovascular disease, metabolic syndrome, etc.
But when I ask my friends and family? They associate the term wellness with yoga, massages, vitamins, meditation, juice fasting, and losing weight. Each group and each person has their own idea of wellness. In the workplace, in general, above mentioned areas are where metrics such as completion of a program, or change in health status can provide data. Employers need data points to determine ROI. Wellness as a business strategy is a healthy proposition that makes logical sense. Healthier employees feel better, and therefore are likely to work better. ROI can be tough to measure if the wellness program doesn’t have data points that align to the wellness strategy. For example, if you have a wellness strategy that has a goal of achieving 65% participation in completion of health risk assessments, the only way to determine if you achieved it is by being able to pull a report. All ROI numbers must be calculated on year over year numbers. Hard data such as claims, program completions, and measured change in health can be tied to an estimated cost figure to determine savings.
However, we know that wellness programs rarely see a pay off sooner than 3 years, and sometimes it takes 4-5 years. Due to employee turnover, it can sometimes be difficult to assess ROI that is reliable. Employers choosing to go the path of building a Culture of Wellness can expect to see positive returns in the long run, but it would be unrealistic to expect a hard ROI in the near term. It takes time for employees to adopt the new culture and it takes time for participation to spread across departments, locations, and attitudes. In the long run, it’s the way to go but if you are looking for a quick fix to your out-of-hand medical claims, you may not get the results you expect right away. The best scenario for mapping out ROI in the short run is outcomes based, but if your employee population is already suffering poor morale and has little trust you have their best interests in mind, this strategy can sometimes backfire. If your company is highly motivated to reduce medical claims, and is willing to truly invest in making some strong gains in just one year, it is possible. It requires a careful and thoughtful strategy and the correct incentive structure in place. It also requires a strong communication and marketing plan targeted to catch your employee’s (and their dependents!) eyes and ears. When you consider that insurance and medical claims costs are typically the #2 cost behind human capital, it’s easy to see how a successful wellness strategy could be your number one business plan. The National Institutes of Health has a great primer (albeit a bit dated) on employee wellness that deserves reading here. Health and Human Services has passed down initiatives to promote employers and health plan administrators to implement wellness programs in an attempt to curb the nation’s rising healthcare costs. This report details the findings in a report to Congress on workplace wellness.
Are you overwhelmed by all the vendors and choices out there? Are you armed with a strategy to improve the health of your workforce? Wellness is not as easy and simple as it sounds, but with consultative guidance, a quality strategy and a strong commitment, it’s an investment that pays off in health improvement gains as well as dollars saved. Not to mention, you might just spark a social wellness movement with your employees!