Study: Many Employers Don’t Measure Wellness Results
I recently discusseded the tremendous potential of Wellness Programs to save employer costs here. But what about measuring the ROI of a Wellness Program? A recent survey shows that many U.S. employers simply didn’t measure their wellness program’s effectiveness in 2010.
The survey, cited in a January 10, 2011 BenefitsPro article by Jenny Ivy, was conducted by Buck Consultants, in association with Pfizer, CIGNA, Wolf Kirsten International Health Consulting, and WorldatWork. Titled “WORKING WELL: A Global Survey of Health Promotion and Workplace Wellness Strategies,” it is a fourth annual global wellness survey of over 1,200 organizations in 47 countries representing more than 13 million employees. The report found that Wellness programs continued to gain momentum this year among U.S.-based organizations as a key strategy to reduce the cost of providing health care, improve worker productivity, and reduce absenteeism. Yet, few actually measured their programs’ effectiveness:
- U.S. employers spent 35% more – $220 – vs. 2009 on each employee participating.
- Yet only 37% actually measured their program’s effectiveness.
- 40% measured how wellness programs affect the cost of health care benefits.
- 45% of those report success in slowing health care cost increases – typical reductions of 2 to 5 percent per year
The U.S. results contrast with results in other regions on the health risks that drive wellness programs. Globally, reducing workplace stress is the top driver of wellness programs, particularly in Canada, Europe, Asia, Australia, the Middle East, and Africa. In the United States, the lack of physical activity is the top driver, and stress ranks much lower (sixth) as a health risk targeted by these programs.
Other key findings of Buck’s wellness study:
- Globally, 66% have a formal wellness strategy, up significantly from 49% in 2007.
- Wellness programs are most prevalent in North America – 74% offer them.
- 11% of U.S. respondents spend more than $500 per year per employee on wellness rewards.
- The largest wellness reward was $3,000 per employee.
- The fastest-growing components of wellness programs are technology-driven tools.
- In three years, employers expect a six-fold increase in their use of mobile technology – such as smartphones – to support employee wellness initiatives.
Measuring Wellness ROI
Linda K. Riddell , recently wrote an article in Employee Benefits News about how to measure the ROI of a Wellness Program. Linda is a principal at Health Economy, LLC, who works with clients on gaining practical tools to comply with and maximize the new opportunities that health care reform offers. Here is her take:
There is always much noise and excitement about starting an employee wellness program, but the room goes silent when talk turns to return on investment. Highly paid consultants cite studies about ROI. Skilled HR professionals mumble about intangibles. Yet, no one offers a clear measure by which a wellness program’s success can be gauged.
It’s well past time for this kind of vagueness to stop being tolerated. A wellness program without clear goals and methods for measurement is meaningless. Here are real-world examples of measures for wellness programs :
- A 10% decrease in claims for back pain.
- A 5% decrease in unplanned absences.
- A 7% decrease in the cost per claimant for heart disease.
- A 15% increase in employees participating in a diabetes self-management course.
- A 12% decrease in emergency room visits.
Wellness programs can and should be linked to concrete results like these. Employers who throw money at wellness programs and don’t demand results are wasting resources.
Wellness ROI can be measured if a program starts with clear data and analysis of a group’s own illnesses and patterns. You can set a goal to reduce back pain claims — but only if you first know that back pain is a problem among employees. With that knowledge, you then can design an intervention around back health that targets the group’s specific issues.
- For example, I had one client that saw a lot of plan claims for back pain. The company paid employees a bonus for every quarter that posted zero workers’ compensation claims. It was a well-intentioned strategy, but claims for back problems were shifting to the health plan because employees didn’t want to ruin the quarterly bonus. Thus, the company needed to eliminate the bonus program, so that the root cause of the back problems could be uncovered and solved.
- Another client also had high expenses for back pain, but for an entirely reason. Back pain is a common “cover” diagnosis for individuals seeking a steady source of painkillers. The client was posting an abnormally high number of prescriptions for narcotics and thus needed its pharmacy benefit manager to notify physicians about patients who had multiple prescribers, pharmacies and prescriptions for painkillers.
If these clients had taken the conventional “get-more-people-to-do-sit-ups” approach, neither would have seen any turnaround in health costs related to back problems. Any wellness approach that is not clearly and directly related to the problem will fail to deliver results. Wellness should be much more than coaxing employees to “be healthier” for intangible results. It can be straightforward tactics that help to improve employee health and reduce costs.
Linda K. Riddell can be contacted at LRiddell@HealthEconomy.net.
Snap! principle of measuring ROI:
“Inspect what you expect.”