Maximizing Return On Investment (ROI) for Worksite Wellness Programs

The work site is the ideal place for health and wellness programs. Employees spend more than half of their waking hours at work. According to the Wellness Councils of America, the amount of ROI that can be expected from a wellness program depends on the type of program being implemented. They refer to three different types of programs: (1) Quality of Work Life (QWL) Wellness or “Wellness for Fun and Pleasure;” (2) Traditional or Conventional (ToC) Wellness or “the Safe Approach;” and (3) Health and Productivity Management (HPM) Style Wellness, or “Serious Wellness.”

QWL wellness programs focus primarily on improving the morale of employees. They are intended to add quality to work life and to improve camaraderie and relationships between employer and employees. This approach to worksite wellness involves entirely voluntary activities that are generally selected for the positive effect they are likely to have on employees. The ROI for this type of program is quite low with a cost/benefit ratio from zero to 1:1.5.

ToC wellness programs focus primarily on the passive offering of a more extensive set of interventions than the QWL program model. They are intended to offer a wide range of activities in a smorgasbord-style approach where about half the eligible participants will usually initiate the use of one or more program activities. The intention is to offer, on a voluntary basis, many different worksite-based wellness activities and to have something for everybody. The ROI for this type of program is moderate with a cost/benefit ratio of 1:1.5 to 1:3.5.   

HPM wellness programs focus primarily on the proactive offering of a highly structured and substantial set of interventions than either the QWL program model or the ToC program model. They are intended to provide an infrastructure of health-management activities offered to a large portion of the workforce and their spouses. The core intention of the HPM model is to offer an organized, intentional process of health improvement and health-risk reduction for all participants. The ROI for this type of program is higher than that of the other two program types with a cost/benefit ratio of 1:3.6 to 1:7.0.

Regardless of which model you choose, the ROI on worksite-related wellness activities succeeds on multiple physical, emotional and cultural levels, helps reduce health-care related costs, and increases morale and productivity.

We’ll continue to bring you wellness ROI stories each month, but also encourage you to share your stories with us. Please let us know what you’re doing, how it’s going, and if we can mention your efforts in a future issue of this newsletter. Send your note to Daryn.marchi@cbia.com.

To reap the benefits of a wellness program at your company, join CBIA Healthy Connections at your company’s next renewal. It’s free as part of your participation in CBIA Health Connections!

Obesity Prevention at the Workplace

In 2008, the annual healthcare cost of obesity in the U.S. was estimated to be as high as 147 billion dollars a year. The annual medical burden of obesity increased to 9.1 percent in 2006 compared to 6.5 percent in 1998. Medical expenses for obese employees are estimated to be 42 percent higher than for a person with a healthy weight. Workplace obesity-prevention programs can be an effective way for employers to reduce obesity and lower their health care costs, reduce absenteeism and increase employee productivity.

Obesity and the health conditions associated with it; such as, hypertension, type 2 diabetes, stroke, coronary heart disease, and certain types of cancer are responsible for much of the increase in health care spending by employers. Obese persons spend 77% more than non-obese persons for necessary medications.

Obesity affects more than health care costs, it also has a significant impact on worker productivity because the more chronic medical conditions an employee has, the higher the probability of absenteeism or presenteeism.

Organizations can benefit directly by improving employee health through an obesity-prevention program. A survey of CEOs found that “healthier employees” is the number one reason why companies choose to implement health promotion programs. Additionally, well-designed programs have the potential to extend beyond the worksite and positively influence dependents (spouses and children), and thereby reduce an organization’s health care costs.

Although it may seem that only large organizations can implement obesity prevention and control programs, organizations of all sizes have done so successfully. Many types of organizations, including those with few employees and resources, are implementing successful obesity prevention programs.

Why Should Employers Get Involved

Potential benefits to employers:

  • Reduces cost for chronic diseases
  • Decreases absenteeism
  • Reduces employee turnover
  • Improves worker satisfaction
  • Demonstrates concern for your employees
  • Improves morale

Potential benefits to your employees:

  • Ensures greater productivity
  • Reduces absenteeism
  • Improves fitness and health
  • Provides social opportunity and source of support within the workplace

CDC offers free obesity-reduction resource

Leading Employees to Activity and Nutrition” (LEAN) is a free web-based resource offered by The Centers for Disease Control (CDC) that offers interactive tools and evidence-based resources to design effective worksite obesity prevention and control programs. You will be able to calculate your company’s ROI using CDC’s Obesity Cost Calculator, [http://www.cdc.gov/leanworks/costcalculator/index.html] a tool designed to allow employers to create scenarios to estimate the financial impact of specific obesity interventions, including the costs, benefits, and time required to break even.

To reap the benefits of a wellness program at your company, join CBIA Healthy Connections at your company’s next renewal. It’s free as part of your participation in CBIA Health Connections!

Why Establish a Workplace Health Program?

Changes in the pace of work and stress levels experienced by employees, combined with the rising cost of health care and benefits, have convinced many employers that investing in employee wellness makes good business sense. This month, we take a look at wellness activities from our northern neighbor. Statistics Canada reports that an estimated $12 billion is lost to workplace absenteeism each year.  Stress, smoking, the inability to balance work and family, and feelings of loss of control over workplace schedules and environments are some of the major health issues facing today’s workforce.

Two-thirds of Canadians over age 15 are employees and, on average, they spend about 60 percent of their waking hours at work. Therefore, the social and physical workplace environment can have a significant impact on health. Research shows that most employees believe the workplace is an appropriate and effective place to promote health and well-being issues. The workplace is also an effective setting for increasing active living because of the potential policy and environmental impact, increased social support, use of mass media and the use of individually based interventions. Other assets of the workplace setting are the size and stability of the target population, the lack of time and travel barriers to participation, peer pressure and peer support, and a “captive” audience.

The workplace also has previously established channels of communication, existing support networks and opportunities to develop corporate norms of behavior.

Not only is the workplace viewed as an effective place to promote health, it is increasingly recognized that the environment at work influences health. The health of employees, in turn, influences productivity, and ultimately, an organization’s bottom line. Evidence suggests a significant return on health and wellness investment for Canadian businesses. For example:

  • In the first six months of the Metro Fit program in Toronto, active municipal employees missed 3.5 fewer days than employees not in the program;
  • BC Hydro employees enrolled in their fitness program had a turnover rate of 3.5 percent compared to a company average of 10.3 percent;
  • The Canadian Life Assurance Company found that the turnover rate for fitness program participants was 32.4 percent lower than average over seven years; and
  • A Canada Life study found a return of $1.95 to $3.75 per employee per dollar spent on corporate wellness programs.
Source:  http://www.healthyalberta.ca/Documents/guidebook-howtochoosewell.pdf

ROI Statistics

A review of 32 studies of corporate wellness programs found claims costs were reduced by 27.8%, physician visits declined by 16.5%, hospital admissions declined by 62.5%, disability costs reduced by 34.4%, incidence of injury declined by 24.8%.

A study reported average annual savings of $8.5 million during 4 years when 18,331 Johnson & Johnson employees participated in a health and wellness program at work. A separate study of the same group showed reductions in tobacco use, sedentary lifestyle, high blood pressure, high cholesterol, low dietary fiber intake and poor motor vehicle safety practices. 

Another study showed that employees who utilized an employee fitness center gained both physical and psychological benefits: improved morale (64%), job satisfaction (70%), work productivity (66%), energy level (83%), physical fitness (86%), general health (80%), work/life balance (63%), stress management (76%), stamina/endurance (84%), attentiveness at work (70%), healthy back (74%), keeping high blood pressure in check (62%), managing cholesterol levels (68%), and controlling weight (76%). 

Citibank’s health management program reported an estimated return on investment of $4.56 to $4.73 saved per $1 spent on the program (AJHP, Ozminkowski, Goetzel et al., 1999).

Over 5 years, Blue Cross Blue Shield of Indiana realized a 250% return on its corporate fitness program investment, yielding a ROI of $2.51 for every $1.00 invested (AJHP, Kenneth R. Pelletier, March/April 1991).

Aurora Healthcare, 2005, http://www.aurorahealthcare.org

How You Benefit from Worksite Wellness

Healthier behaviors translate into fewer health issues within the workforce, which in turn lowers health care costs. In fact, more than 120 research studies about worksite wellness programs show improvements in employee health coupled with high returns on investments (ROI).

Major study findings include the following statistics:

  • Savings of $3.48 in reduced health care costs per dollar invested
  • Savings of $5.82 in lower absenteeism costs per dollar invested
  • ROIs of at least $3 to $8 per dollar invested within five years of program implementation
  • Lifestyle behavior change programs — $3 to $6 ROI within 2 to 5 years
  • Self care, decision support programs — $2 to $3 ROI within 1 year
  • Disease management programs — $7 to $10 ROI within 1 year

The impact of a health improvement program also goes beyond decreased health care costs and ROI. A health improvement program can affect productivity, absenteeism, morale, recruitment success, turnover, and medical care costs.

http://www.ibx.com/worksite_wellness/

Why start a wellness program?

The ROI of worksite wellness programs.

As a small business owner, you know that formal wellness programs have been in place in large companies and organizations for years – and that all current data demonstrates a significant return on investment for employers when they invest in organized employee health and wellness efforts.

The move to introduce formal wellness initiatives in small companies has been happening more quietly, and while much available measurements are based on larger organizations, there’s little doubt that a healthy workforce – regardless of size – is a more productive workforce. It’s simple: When your employees are healthy, they get sick less often, don’t miss as much work, and are better able to handle stress and meet customer needs more effectively.

Here are some eye-opening statistics that demonstrate the value – and employer return on investment – thanks to formal workplace wellness programs:

  • A review of 32 studies of corporate wellness programs found claims costs were reduced by 27.8%, physician visits declined by 16.5%, hospital admissions declined by 62.5%, disability costs reduced by 34.4%, incidence of injury declined by 24.8%.
  • A study reported average annual savings of $8.5 million during 4 years when 18,331 Johnson & Johnson employees participated in a health and wellness program at work.
  • A separate study of the same group showed reductions in tobacco use, sedentary lifestyle, high blood pressure, high cholesterol, low dietary fiber intake and poor motor vehicle safety practices.
  • Another study showed that employees who utilized an employee fitness center gained both physical and psychological benefits: improved morale (64%), job satisfaction (70%), work productivity (66%), energy level (83%), physical fitness (86%), general health (80%), work/life balance (63%), stress management (76%), stamina/endurance (84%), attentiveness at work (70%), healthy back (74%), keeping high blood pressure in check (62%), managing cholesterol levels (68%), and controlling weight (76%).
  • Citibank’s health management program reported an estimated return on investment of $4.56 to $4.73 saved per $1 spent on the program (AJHP, Ozminkowski, Goetzel et al., 1999).
  • Over 5 years, Blue Cross Blue Shield of Indiana realized a 250% return on its corporate fitness program investment, yielding a ROI of $2.51 for every $1.00 invested (AJHP, Kenneth R. Pelletier, March/April 1991).

 

From www.aurorahealthcare.org