Wellness Programs Economic Considerations.   

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

Wellness programs for workers became more widespread during the following decade, and credible evidence for their economic viability started 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 medical insurance costs escalate with both age and number of risks present.8,10   the number of risks is also strongly related to sick leave absenteeism, Employee’s Compensation costs, short-term disability, and decreased productivity (”presenteeism”).

Early worker 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 could  be characterized as “fun-oriented”.  Participation is entirely voluntary, and there’s no particular focus on the reduction of specifically identified high risks.  

Interventions and activities are not personalized, and there’s no emphasis on the management of health care costs.  These programs are typically site-based only, lack choices to address all 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 broad and not customized.  

They may have some generalized emphasis on medical 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 evaluation 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 specifically identified high risks and the management of medical costs.  They are generally voluntary, but use strong financial and other incentives to promote participation.  

They’re 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 as well as employees.

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

Chapman’s 2007 systematic review7 announced an typical reduction in healthcare costs of 26.5 percent so of staff member wellness programs.  His review covered 60 of the most scientifically accurate studies, with an typical of 3.77 years of study.

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

There’s 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 percent reduction in presenteeism (and a 2 percent reduction in absenteeism).11

Some companies 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 staff member population in focused wellness programs, with 75%-85 percent of the workers falling into the low risk category.10     

Although robust efforts to lower the risk status of those in moderate or high risk categories ought to be made, the needs of currently healthy workers ought to be addressed as well to avoid increases in risk-status.   

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

In like manner, improvements in absenteeism, employee’s compensation, disability, presenteeism, and turnover as a result of robust employee wellness programs would yield substantial fiscal benefits for the government.   

References   

1   Aldana, Steven G.  (2001)   Financial Impact of Wellness Programs –   A Robust 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-Investigation of Corporate Wellness Economic Return Studies –  2005 Update.  The Art of Wellness, July/August, 1-15.

5   Chapman, Larry.   (2006)   Staff Member 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 Healthy Behaviors for Health Plans and Corporations” 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 Healthful 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 Be 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 robust Health and Disease ManagementPrograms 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 Illness.  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.