Many employers, as part of their efforts to contain rising medical care costs,
are implementing worksite programs variously described as Corporate Health Promotion
, lifestyle programs, health and productivity management, population health
management and, simply, wellness programs.
The purpose of this article is to consider whether such programs better health.
If so, do they in turn lower utilization of medical care services and lower
medical care expenditures?
The popular media have done much to reward the concept of company 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 Employer, as published
Would these ROIs stand up to thorough 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 modifiable risk
factors is reported to account for at least 25 percent of employee medical care
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 echelons have promoted the concept that health risk
reduction and care management programs have the potential to better employee
health, and that worksite health education, health risk management, and benefit
counseling should complement standard healthcare insurance benefits.
The intensity of Corporate Health Promotion range from bulletin board, pamphlet
or newsletter information to onsite fitness facilities, health risk reduction
classes, and personal lifestyle change coaching.3 Corporate Health Promotion
today frequently include a health risk assessment (HRA) to evaluate each employee’s
modifiable risk factors of disease. Program coordinators then target interventions
to those that are at increased risk through personal discussions and individual
follow-up.
All-Inclusive Corporate Health Promotion 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 workers who adhere to recommended
healthcare screening instructions.
Along with this, some employers are restructuring health benefits and encouraging
employees’ cost-sensitivity when accessing medical care.5 These changes
are intended to lower employees’ need for and utilization of medical care,
yielding reduced group medical care costs. Demonstrated reductions in medical
care expenditures should then offer employers with a powerful bargaining chip
in negotiating decreased healthcare insurance premiums during future terms.
Evidence basis: A range of ROI estimates
The empirical research has produced results as varied as the popular media
on ROI. Nonetheless, evidence continues to grow that well-designed and well-resourced
Corporate Health Promotion Program and disease prevention programs offer multi-faceted
payback on expenditure. Peer-reviewed evaluations and meta analyses show that
ROI is achieved through improved worker health, reduced benefit expense, and
enhanced productivity.
- Goetzel and colleagues, in their meta-analysis of two dozen articles summarizing
economic evaluations of health and productivity management programs, observed
an average return of $3.14 per $1 invested in traditional Corporate Health
Promotion . The ROI estimates for the individual programs ranged from $1.49
to $13.7,8 - Aldana reviewed 72 articles and concluded that Corporate Health Promotion
achieve an average ROI of $3.48 when thinking of medical 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 reported that within
a 2 year period, Citibank realized a ROI between $4.56 and $4.73.10 Follow-up
studies observed 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 overriding
validity of the different studies, reports cost-benefit ratios from $2.05-$4.64.
In addition to immediately quantifiable expense reductions, researchers have
reported a variety of spin-off benefits: greater productivity, 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 medical care costs to offer non-health related ROI.
Tailoring program to maximize ROI Corporate Health Promotion aim to lower the
health risks of workers 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 employers
now seek to calibrate their interventions in order to achieve ideal risk reduction
and costeffectiveness.
In 2001, University of Michigan researchers reported on stable trends in medical
care costs for over 2 million current and former workers 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 workers 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 workers within the
context of accross the board programming is the vital element in achieving beneficial
clinical and expense outcomes in worksite interventions.
Dose-Response?
Several factors might affect the effect 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 employers with more
than fifty workers. But researchers have demonstrated that similar results have
the potential to be obtained by small employers with as few as five workers
actively involved in a well-managed program.
Various studies also suggest that even relatively modest levels of participation
have the potential to achieve substantial program effect. Contrary to reports
by the popular media that such programs require more than 70 percent participation,
published reports of at least one case showed beneficial ROI with 51 percent
participation.
Length of intervention appears to be a more salient variable: an effect 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
ROI upward.
Uncertainty persists regarding the specific effect 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 ROI for Corporate Health Promotion . Indeed,
the company case for such programs is now well enough defined that some insurance
brokers offer discounted rates to employers 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 ROI. Here, employers, workers, and researchers will
need to collaborate to define mutual goals/objectives in terms of both clinical
and expense outcomes.
