Aug 29 2010
A lot of corporations, as part of their efforts to contain rising health care costs, are starting worksite programs variously described as wellness, lifestyle programs, health and productivity management, population health management and, simply, health promotion 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 concept of employee health promotion. 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)
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 Corporation, as reported
Would these Return On Investments 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 Return On Investments stated here?
Health and Productivity Management
Illness and injury associated with an unhealthy lifestyle or modifiable risk factors is reported to account for at least 25 percent of employee healthcare 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 worksite health education, health risk management, and benefit counseling should complement standard health insurance benefits.
The intensity of health promotion programs range from bulletin board, pamphlet or newsletter information to on-site fitness facilities, health risk reduction classes, and personal lifestyle change coaching.
Health promotion programs today often include a health risk (assessment|appraisal} 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.
Extensive wellness programs may include classes 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 biometric 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 decreased group medical care costs.
Demonstrated reductions in health care expenditures should then provide companys with a powerful bargaining chip in negotiating lower health insurance premiums during future terms.
Evidence basis – A range of Return On Investment (ROI) estimates
The empirical research has produced results as varied as the popular media on Return On Investment. However, evidence continues to grow that well-designed and well-resourced wellness and disease avoidance programs provide multi-faceted payback on investment.
Coworker-reviewed investigations and meta analyses show that Return On Investment (ROI) is achieved through improved employee health, reduced benefit expense, and enhanced productivity.
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 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 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.
Ozminkowski and collagues conducted a 38 month case study of 23,000 participants in Citibank, N.A.’s health management program and announced that within a 2 year period, Citibank realized a Return On Investment 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 thus 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 stated a selection 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 staff member perceptions of the organization and staff member morale, even among nonparticipants. These outcomes go beyond savings in direct healthcare costs to provide non-health related ROI.
Tailoring program to maximize Return On Investment (ROI) Wellness programs aim to reduce the health risks of employees 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 organizations now seek to calibrate their interventions in order to achieve optimal risk reduction and costeffectiveness.
In 2001, University of Michigan researchers stated on stable trends in health care costs for over 2 million current and former staff 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 reduces in costs when groups moved from high risk to low risk. Their conclusion – Programs designed to keep healthy individuals healthy will likely provide the greatest return on investment.
On the other hand, Pelletier’s meta-analysis and other program examinations18 suggest that individualized risks reduction for high-risk workforce within the context of extensive programming is the critical element in achieving positive clinical and cost outcomes in worksite interventions.
Dose-Response?
A few factors might 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 large businesses with more than fifty staff members. But scientists have shown that similar results can be obtained by small businesses with as few as five staff members 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 well-liked media that such programs require more than 70% participation, published reports of at least one case showed positive Return On Investment (ROI) with 51% participation.
Length of intervention appears to be a more salient variable – an impact on medical costs normally requires three-to five years of programming.
Future developments
Despite the abundance of positive program investigations, several caveats remain. Negative results are less likely to be stated or published, hence biasing the Return On Investment (ROI) upward.
Uncertainty persists regarding the specific impact of the various program components. But as these programs take hold, further research and investigation will enable fine-tuning of program investments.
Meanwhile, the preponderance of data and the strength of the published research stand for a positive ROI for health promotion programs.
In fact, the corporation case for such programs is now well enough defined that some insurance agents offer discounted rates to corporations that institute or subscribe to health promotion programs.
Future questions will focus on how to best to combine comprehensive and focused interventions, the intensity of elements, and how to calibrate the dose-response model to achieve a target Return On Investment.
Here, companys, workers, and scientists will need to collaborate to define mutual goals as 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 businesses, health insurers. Milwaukee Journal Sentinel. August 19, 2004.
4. Chapman LS. Expert opinions on “best practices” in company health promotion (WHP). the Art of Health Promotion 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 businesses 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 – Health Promotion 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 Health Promotion 1999; 14(1) – 31-43.
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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.
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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.