Wellness Program Return on Investment.

Many businesss, as part of their efforts to contain rising healthcare costs, are starting worksite 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 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 returns on investment (ROI) -

Return on Investment (Per dollar 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 ROIs stand up to rigorous empirical analysis of the data? What factors produce such disparate returns among these programs? and does the published literature, subject to colleague review of scientific methods, support the ROIs announced here?

Health and Productivity Management

Disease and injury associated with an unhealthy lifestyle or modifiable risk factors is stated to account for at least 25% of worker healthcare expenditures.

The most significant of these risk factors are stress, tobacco use, overweight or obesity, lack of exercise, 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 theory that health risk reduction and care management programs can improve worker health, and that worksite health education, health risk management, and benefit counseling should complement standard health insurance benefits.

The intensity of wellness programs range from bulletin board,  brochure or newsletter information to onsite fitness facilities, health risk reduction classes, and personal lifestyle change coaching.

Wellness programs today often include a health risk (assessment|appraisal}  to evaluate each employee’s modifiable risk factors of disease. 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, fitness club memberships, and reductions in co-payments or premiums for employees who adhere to recommended health screening guidelines.

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

Demonstrated reductions in health care expenditures should then provide businesss with a powerful bargaining chip in negotiating lower health insurance premiums during future terms.

Evidence basis -  A range of ROI estimates

The empirical research has produced results as varied as the well-liked media on ROI. However, evidence continues to grow that well-designed and well-resourced wellness and illness avoidance programs provide multi-faceted payback on investment.

Peer-reviewed analysiss and meta analyses show that ROI is achieved through improved staff member health, lowered benefit expense, and enhanced productivity.

• Goetzel and coworkers, in their meta-analysis of two dozen articles summarizing economic examinations of health and productivity management programs, found an average return of $3.14 per $1 invested in traditional wellness programs. the ROI estimates for the individual programs ranged from $1.49 to $13.7,

• Aldana reviewed 72 articles and concluded that wellness programs achieve an typical 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.

• Ozminkowski and collagues conducted a 38 month case study of 23,000 participants in Citibank, N.A.’s health management program and reported 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 bettering more than the “usual care” group1 as a result of more intensive 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, researchers have announced a variety of spin-off benefits -  greater productivity, intellectual capacity, and reductions in disability12 and absenteeism.9,13,14,15

Such 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 health care costs to provide non-health related ROI.

Tailoring program to maximize ROI Wellness 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 interventions are available to fit the specific risk profiles of various worksites. Insurers and corporations now seek to calibrate their interventions to achieve optimal risk reduction and costeffectiveness.

In 2001, Univ. of Michigan scientists stated 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 employees 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 program investigations18 suggest that individualized risks reduction for high-risk workers within the context of extensive programming is the vital element in achieving positive clinical and cost outcomes in worksite interventions.

Dose-Response?

Several factors may affect the impact of various programs and the ultimate ROI, including cultural and environmental factors, workforce demographics, level of participation and longevity of the program.

Most cost-benefit studies have been conducted in big companies with more than fifty employees. But researchers have shown that similar results may be acquired by small companies with as few as five employees actively involved in a well-managed program.

Various studies also suggest that even relatively modest levels of participation can achieve substantial program impact. Contrary to reports by the popular media that such 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 programming.

Future developments

Despite the abundance of positive program evaluations, a few caveats remain. Negative results are less likely to be announced or published, as a result biasing the ROI upward.

Uncertainty persists regarding the specific impact of the various program components. But as these programs take hold, further research and evaluation will enable fine-tuning of 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 company case for such programs is now well enough defined that some insurance agents offer discounted rates to corporations 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 ROI.

Here, companys, workers, and researchers 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 Wellness 2000; 15(1) -  45-52.

3. Manning J. Wellness movement gains ground among companies, health insurers. Milwaukee Journal Sentinel. August 19, 2004.

4. Chapman LS. Professional opinions on “best practices” in corporate wellness (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 corporations to promote staff member wellness strategies. Akron Beacon Journal. October 25, 2004.

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

8. Goetzel, RZ. Absolute Advantage. Washington DC -  Wellness Councils of America. Vol 1(8); 2002.

9. Aldana SG. American Journal of Wellness 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.

11. Ozminkowski RJ, Goetzel RZ, Smith MW, Cantor RI, Shaughnessy A, Harrison M. the impact of the Citibank, N.A. J Occup Environ Med. 2000; 42(5) -  502-511.

12. Serxner S, Gold D, Anderson D, Williams D. J Occup Environ Med. 2001; 43(1) -  25-29.

13. Riedel JE, Lynch W, Baase C, Hymel P, Peterson KW. American Journal of Wellness 2001; 15(3) -  167-191.

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

15. Aldana SG, Pronk NP. J Occup Environ Med. 2001 Jan; 43(1) -  36-46.

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

17. Edington DW. American Journal of Wellness 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.