Wellness Programs Economic Considerations.   

Initially introduced by Halbert Dunn in the 1950’s, wellness became a popular buzzword during the late 1970’s and received considerable academic attention in the 1980’s.     

Wellness programs for employees became more widespread during the following decade, and credible evidence for their economic viability began to be published.     

There have now been over 100 published studies on this topic and a number of systematic reviews.

Health risks increase costs.  Medical and health insurance costs escalate with both age and number of risks present.8,10   the number of risks is also strongly related to sick time absenteeism, Employee’s Compensation costs, short-term disability, and lowered productivity (”presenteeism”).

Early staff member wellness programs were relatively basic and typically produced a return on investment (ROI) of less than one dollar for every dollar spent operating the program (ROI = <1 - 1).8

Such programs may  be characterized as “fun-oriented”.  Participation is entirely voluntary, and there is no particular focus on the reduction of especially identified high risks.  

Interventions and activities aren’t customized, and there’s no emphasis on the management of medical costs.  These programs are usually site-based only, lack options to address all of the major behaviorally-related health risks, and lack multimodal presentation.  

Minimal or no incentives are provided to staff members for participation, and services to spouses and family members aren’t available.  Most such programs lack meaningful examination.  

More conventional programs are “activity-oriented” and have shown an ROI of between 1 – 2.5 and 1 – 3.5.8 These programs may have a greater emphasis on health and risk reduction, although the efforts are relatively wide and not personalized.  

They may have some generalized emphasis on health cost management, although not necessarily aimed at specific high risks.  Most are site-based and voluntary, with spouses included only rarely.  

Modest incentives may  be utilized to encourage participation.  Formal investigation may  be weak.

The newest and most economically viable programs are “results-oriented” and exemplify the health and productivity management model.  These programs consistently produce return rates of 1 – 4 or greater within a 12-24 month period.8  

Such programs are strongly focused on the reduction of particularly identified high risks and the management of healthcare costs.  They are generally voluntary, but use strong financial and other incentives to promote participation.  

They are multi-component in nature (address all major risks), and have both on-site and virtual modalities of operation.  The interventions are highly targeted and individualized, and offered to spouses in addition to staff members.

For corporations, the cost of providing health insurance for their employees is of excellent importance.  Those costs have been increasing at annual rates between 6% and 14%.

Chapman’s 2007 systematic review7 announced an average reduction in healthcare costs of 26.5 percent thus of worker wellness programs.  His review covered 60 of the most scientifically valid studies, with an average of 3.77 years of study.

Absenteeism due to illness is another cost driver.  Chapman’s review7 reports an typical reduction in sick time of 25.3%.   Cost for Employee’s Compensation was reduced by 40.7%, and disability costs by 24.2%.

There is also an emerging literature on the costs of presenteeism (reduced productivity).11,13  In one study, every risk reduced through a wellness program yielded a 9% reduction in presenteeism (and a 2% reduction in absenteeism).11

Some corporations have achieved a zero percent increase in healthcare costs across at least brief periods of time.10  Doing so requires 90-95 percent participation of the employee population in focused wellness programs, with 75%-85 percent of the workers falling into the low risk category.10     

Although comprehensive efforts to lower the risk status of those in moderate or high risk categories must be made, the needs of currently healthful employees must be addressed as well to avoid increases in risk-status.   

Given the size of the federal workforce, meaningful cost savings in the government’s contribution to medical insurance premiums for employees can be achieved if a majority of that population were participating in active wellness programs.     

In like fashion, improvements in absenteeism, employee’s compensation, disability, presenteeism, and turnover then of extensive staff member wellness programs would yield substantial fiscal benefits for the government.   

References   

1   Aldana, Steven G.  (2001)   Financial Impact of Wellness Programs –   A Comprehensive Review of the Literature.   Am J Wellness 15(5) – 296-320.

2   Chapman, Larry.  (1998)   the Role of Incentives in Wellness.  The Art of Wellness  2(3) – 1-8.

3   Chapman, Larry.   (2003)   Biometric Screening in Wellness –   is it Really as Important as We Think?  the Art of Wellness  7(2) – 1-12.

4   Chapman, Larry.  (2005)   Meta-Examination of Corporate Wellness Economic Return Studies –  2005 Update.  The Art of Wellness, July/August, 1-15.

5   Chapman, Larry.   (2006)   Worker Participation in Corporate Wellness and Wellness Programs –   How Important are Incentives, and Which Ones work Best?   North Carolina Medical Journal   67(6) –   431-432.

6   Chapman, Larry, Lesch, Nancy, and Passas Baun, Mary Beth.   (2007)   the Role of Wellness Coaching in Corporate Wellness.   the Art of Wellness, July/August, 1-12.

7   Chapman, Larry.  (2007)   Proof Positive –   an Analysis of the cost-Effectiveness of Corporate Wellness.  Northwest Health Management Publishing, Seattle, WA.

8   Chapman, Larry.  (2007)   an In-Depth Look at the Economic Evidence for Rewarding Health Behavior Change.   Workshop presentation at the World Research Group “Rewarding Healthful Behaviors for Health Plans and Companys” Conference, Orlando, FL, January 23-24.

9   Edington, Dee.   (2001)   Emerging Research –   A View from One Research Center.  American Journal of Wellness 15(5) –  341-349.

10   Edington, Dee W.  (2007)   Health Management as a Serious Corporation Strategy.  Presentation at the World Research Group “Rewarding Healthy Behaviors for Health Plans and Businesss” Conference, Orlando, FL, January 23-24.

11   Pelletier, Barbara, Boles, Myde, and Lunch, Wendy.  (2004)  Changes in Health Risks and Make certain to work Productivity.   Journal of Occupational and Environmental Medicine, 46(7) –  746-754.

12   Pelletier, Kenneth R.  (2005)   A Review and Analysis of the Clinical and Cost-Effectiveness Studies of comprehensive Health and Disease Management (DM)Programs at the Worksite –  Update VI 2000-2004.  JOEM 47(10)1051-1058.

13   DeVol, Ross, Bedroussian, Armen, et. al.  (2007)  an Unhealthful America –   the Economic Burden of Chronic Condition.  Report released by the Milken Institute.   www.milkeninstitute.org.

14   Partnership for Prevention.  (2008) Investing in Health –   Proven Wellness Practices for Workplaces.   http – //www.prevent.org/images/stories/2008/investinginhealth_finalfinal.pdf.