Many employers, as part of their efforts to contain rising healthcare costs, are implementing workplace programs variously described as Workplace Health Promotion Programs, lifestyle programs, health and productiveness management, population health management and, simply, wellness programs.
The purpose of this article is to consider whether such programs improve health. If so, do they in turn decrease utilization of healthcare services and decrease healthcare expenditures?
The popular media have done much to promote the concept of employer wellness. Last year, In Business: Madison 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 Business, as published
Would these ROIs stand up to rigorous empirical analysis of the data? What factors create such disparate returns among these programs? And does the published literature, subject to peer review of scientific methods, support the ROIs published here?
Health and Productivity Leadership
Illness and injury associated with an unhealthy lifestyle or potentially-modifiable risk factors is published to account for at least 25% 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 employee health, and that workplace health education, health risk management, and benefit counseling must complement standard healthcare insurance benefits.
The intensity of Workplace Health Promotion Programs range from bulletin board, pamphlet or newsletter information to workplace fitness facilities, health risk reduction classes, and personal lifestyle change coaching.3 Workplace Health Promotion Programs today often include a health risk assessment (HRA) to evaluate each employee’s potentially-modifiable risk factors of disease. Program coordinators then target interventions to those that are at increased risk through personal talks and individual follow-up.
Comprehensive Workplace Health Promotion Programs may include classes on health risk reduction and job safety, fitness and exercise activities, health club memberships, and reductions in co-payments or premiums for employees who adhere to recommended healthcare screening guidelines.
Along with this, some employers are restructuring health benefits and encouraging employees’ cost-sensitivity when accessing healthcare.5 These changes are intended to decrease employees’ need for and utilization of healthcare, yielding reduced group healthcare costs. Demonstrated reductions in healthcare expenditures must then offer employers with a powerful bargaining chip in negotiating decreased healthcare 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 return on investment. Nonetheless, evidence continues to grow that well-designed and well-resourced Workplace Health Promotion Program and disease prevention programs offer multi-faceted payback on expenditure. Peer-reviewed evaluations and meta analyses show that return on investment is achieved through improved worker health, reduced benefit expense, and enhanced productiveness.
• Goetzel and colleagues, in their meta-analysis of two dozen articles summarizing economic evaluations of health and productiveness management programs, reported an average return of $3.14 per $1 invested in traditional Workplace Health Promotion Programs. The return on investment estimates for the individual programs ranged from $1.49 to $13.7,8
• Aldana reviewed 72 articles and concluded that Workplace Health Promotion Programs achieve an average return on investment of $3.48 when considering healthcare 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 published that within a 2 year period, Citibank realized a return on investment between $4.56 and $4.73.10 Follow-up studies reported improvements in the risk profiles of participants, with the high-risk group improving more than the “usual care” group11 as a result of more intensive programming.
• Chapman’s 2004 meta-assessment of 42 different studies, ranking central validity of the different studies, reports cost-benefit ratios from $2.05-$4.64.
In addition to immediately quantifiable cost reductions, researchers have published a variety of spin-off benefits: greater productiveness, intellectual capacity, and reductions in disability12 and absenteeism.9,13,14,15 Such programs may also have beneficial effects on employee perceptions of the company14 and worker morale, even among nonparticipants. 13 These outcomes go beyond savings in direct healthcare costs to offer non-health related return on investment.
Tailoring program to maximize return on investment Workplace Health Promotion Programs aim to decrease 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 ideal risk reduction and costeffectiveness.
In 2001, University of Michigan researchers published on stable trends in healthcare costs for over 2 million current and former employees 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 healthy people healthy will likely offer the greatest return on investment.
On the other hand, Pelletier’s meta-analysis16 and other program evaluations18 suggest that individualized risks reduction for high-risk employees within the context of accross the board programming is the essential element in achieving beneficial clinical and cost outcomes in workplace interventions.
Dose-Response?
Several factors might affect the impact of various programs and the ultimate return on investment, including cultural and environmental factors, workforce demographics, level of participation and longevity of the program.
Most cost-benefit studies have been conducted in big organizations with more than fifty employees. But researchers have established that similar results can be obtained by small organizations 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 beneficial return on investment with 51% participation.
Length of intervention appears to be a more salient variable: an impact on healthcare costs generally requires three-to five years of programming.
Future developments
Despite the abundance of beneficial program evaluations, several caveats remain. Negative results are less likely to be reported or published, thus biasing the return on investment upward.
Uncertainty persists regarding the specific impact of the various program components. But as these programs take hold, further research and assessment will enable fine-tuning of program investments.
Meanwhile, the preponderance of data and the strength of the published research stand in favor of a beneficial return on investment for Workplace Health Promotion Programs. Indeed, the employer case for such programs is now well enough defined that some insurance brokers offer discounted rates to organizations that institute or subscribe to wellness programs.
Future questions will focus on how best to combine accross the board and focused interventions, the intensity of components, and how to calibrate the dose-response model to achieve a target return on investment. Here, employers, employees, and researchers will need to collaborate to define mutual objectives in terms of both clinical and cost outcomes.
