Category — Wellness Programs

Wellness programs are a long-term investment. But how long should you wait for results?

Finance and the Chief Executive Officer (CEO) want hard numbers to show Return On Investment.  And wellness Return On Investment is tougher to calculate than, say, a 401(k).

18-month guideline

Recent studies have established some benchmark data on wellness Return On Investment you are able to use as a guideline. It’s useful whether you already have a wellness program or are thinking about starting one.

It typically takes at least 18 months from the launch of a health promotion program to see any results in your healthcare plan bottom line.

For a lot of firms, 18 months is the point at which workers’ bettering health starts to cancel out the cost of sponsoring and administering the health promotion program.

By and large, the long-term cost savings from a wellness program are going to be driven by how much you’re willing to spend. Ordinarily, businesses get what they pay for - both in time and money invested.

As a rule of thumb, the average cost to the company is about $3 to $5 per participating worker per month. Within three years of launch, you should be seeing significant savings.

The average Return On Investment (ROI) tends to be about $4 to $5 saved for every dollar spent. So how can you manage the costs in the short-term in order to achieve the long-term savings?  and how can you maximize the long-term payoff?

Consider making wellness programs budget-neutral

For a lot of corporations, the most effective way to manage the cost of a health promotion program in the start-up phase is to make it a budget-neutral expense.

In other words, the wellness program neither adds to your medical costs at the outset, nor lowers them. Example -  You plan to roll out a wellness program effective Jan. 1.  The wellness program will cost the business $5 per staff member.

You can roll the $5 per month cost directly into the employee’s monthly share of their health care premium. In this age of continuous cost-shifting, most workers are used to seeing small increases in their monthly contributions each plan year.

Just make certain you’re not hitting folks with a big hike on top of that $5. Comparably designed wellness programs pay off about the same - meaning staff members purchase in and participate at the same rate - whether they’re budget neutral or the business absorbs the cost.

But when personnel get clobbered by large-scale contribution hikes at the outset, they often resist the health promotion program.  The long-term Return On Investment for these health promotion programs is often disappointing.

When you’re faced with a situation where achieving a budget-neutral wellness program would trigger push-back, your firm is better off absorbing most or all the wellness costs.

The largest hurdle is to get over the hump for those first 18 months or so.

A few years ago, business health fairs were all the rage. Now they’re making a comeback, with a slight twist.

In the past, the fairs often better served the provider(s) who came onsite than the needs of the hosting business or their workers. More recently, businesses have refined the planning of the events to serve especially to launch or promote a health promotion program.

To be successful, the events need to serve two purposes - improveing worker education and building their enthusiasm to participate in the wellness program.

To make sure you and your personnel get the most out of a health fair, it helps to be aware about the plusses and minuses - and some little touches that can mean the difference between a so-so event and a hit.

Wellness Fairs -  Double-edged sword

On the plus side, staff members received easy-to-grasp information on key wellness topics such as illness detection, symptom control and smarter medication practices. They also receive important services like free blood-pressure screenings.

On the down side, some specialists said the more newfangled events were more like “disease fairs” than “wellness fairs.” In other words, the tone was little too somber and personnel weren’t namely tuned in because they weren’t enjoying themselves.

Wellness program consultant Dr. Ron Goetzel believes that the savviest firms strike a balance in their health fairs. Stick with the screenings, but also feature exhibitors who offer “lighter,” more enjoyable services. Examples -

• A booth from a local health-food store

• A chair-massage station

• elder-care info from the AARP, or

• A “complimentary medicine” info booth (e.g.,a chiropractor or an acupuncturist).

Offering incentives

In many cases, personnel still need an incentive to attend the fair and get the desired screenings, further to doing the fun stuff. Some real-life wellness programs that’ve worked -

• A contest offering prizes to workforce who visit every station

• quizzes and prizes based on info from different providers’ literature

• flex-scheduling or time-off incentives for getting screened (e.g., a comp day or an extra afternoon off), and

• cash incentives (as little as $20 and as much as $100) to people  who voluntarily participate in various screenings.

Medical research has long shown quitting smoking at any age can improve a person’s health.

But a Duke Univ. shows that the group you could think would be the least likely to quit - people  over the age of 50 - might actually have the best odds for quitting through a tobacco use cessation program.

Scientists tracked 573 older patients over 10 years. They found that just 16% of those who joined the tobacco use cessation program later returned to tobacco use.  Meanwhile, previous research has found young smokers who try to quit have a 35% to 45% relapse rate within two years.

Bottom line -   Given the aging staff member population and the cost of retiree healthcare, you may want to keep trying with use of tobacco cessation education for your older workers.

Conducting an Employee Fitness Challenge at your worksite is a fun and arousing way to increase awareness among staff about the importance of starting and sustaining an exercise program.

It’s a concentrated effort in which to engage them in physical activity for a specific period that, hopefully, will help them start a healthy habit that will last a lifetime.

Notwithstanding, it is important to practice wellness year-round. This section provides a robust list of Wellness Program ideas that have been implemented within wellness programs.

All ideas presented in this section have been successful for one or both of the entities. Each activity/idea can be used as a stand-alone event, even when you do not conduct a fitness contest, or can be held joined with your Worker Fitness Contest.

You could want to choose some ideas you think will work for your workforce or think of others and begin your program to develop a better state of health.

The organizations with the most cost-efficient medical programs are the ones that streamline the services personnel receive for both their physical and psychological health.

As a long-term goal, having your general health plan, worker assistance program (EAP) and wellness program communicating regularly with one another about employees’ treatments is the single best way to reduce redundant or contradictory treatments, eliminate unnecessary claims and improve the quality of the plans for which you pay.

Let’s look at the relationship between your health promotion program and your employee assistance program (EAP) to illustrate the importance of attacking healthcare costs cross a wide front.

You can begin a wellness program with a health risk assessment and then, if appropriate, roll out a use of tobacco cessation program or a weight loss program.

But ultimately you want to make sure that your wellness vendor works paired with your EAP vendor.

Here’s why -  It’s very common for an employee to contact the employee assistance program (EAP) because the person feels depressed about his or her weight. What you want is for the employee assistance program (EAP) vendor to treat the employee’s depression and behavioral issues, plus you want the employee assistance program (EAP) to refer the employee to the health promotion program to deal with the root cause of the problem - obesity.

The same thing accompanies the relationship your health promotion program and your workers’ comp provider, STD and LTD providers, rehab people , and/or disease managers. You want all them talking to - and sharing data with - each other. If they’re not, it’s costing you money.

In general, the businesss who achieve the greatest cost savings through their health promotion programs are the ones who overlap wellness with behavioral and occupational health issues.

Studies have repeatedly demonstrated that robust health promotion programs, or Health Promotion Programs, can lower healthcare and insurance costs, lower absenteeism, and improve performance and productivity.

Other benefits demonstrated in studies include improved ability to attract and retain key personnel, greater employee allegiance, and improved public image of the organization.

Health Care and Insurance Costs

A number of studies provide evidence of lower medical and insurance costs for participants in health promotion programs, particularly health promotion programs involving exercise.

For $30 per person, the Bank of America conducted a health promotion program for retirees using a risk assessment questionnaire, self-care books and other mailed materials. Insurance claims were decreased an average of $164 a year in this group while they increased $15 for the control group.

Since they were able to document meaningful changes in risk behavior, they anticipate greater savings in future years.

Pacific Bell’s FitWorks participants claim $300 less per case for a one-year savings of $700,000. Savings for conditions related to a sedentary lifestyle are $722 per case.

Coca Cola stated a reduction in health care claims with a workout program alone, saving $500 per staff member per year for the employees (60%) who joined their HealthWorks fitness program.

Prudential Insurance Corporation reports that the organization’s major medical costs dropped from $574 to $312 for each participant in its wellness program.

Decreased Absenteeism

Absenteeism has been shown to be impacted by company wellness and wellness programs.  The evidence indicates a significant reduction in absenteeism and resultant dollars saved then of worker fitness programs.

Pacific Bell’s FitWorks wellness program reduced absent days .8 percent to save $2 million in one year. FitWorks members also spent 3.3 days less on short-term disability for an additional savings of $4.7 million.

Focusing wellness efforts on high-risk workers can lead to better results. A national manufacturing business reports a decrease of 12.2 percent in disease days for these workers.

A two-year study by the DuPont Company of the effect of its robust wellness program on absences among staff reports that blue-collar staff at intervention sites had a 14% decline in disability days vs. 5.8% decline for controls. There were a sum of 11,726 fewer net disability days.

Increased Performance, Productivity and Morale

A number of employers with wellness programs report documented betterment in job attitude, work performance, energy level, and/or overall morale among wellness program participants–all crucial factors in enhancing productivity.

A Johnson and Johnson study found that worker attitude changes were greater at wellness intervention sites with meaningful positive attitude changes noted in the categories of organizational commitment, supervision, working conditions, job competence/security, and pay/benefits.

In a Canadian government study, the Canada Life Assurance Business experimental group realized a 4% increase in productivity after starting an worker fitness program, compared to the control group.

Further, 47% of health promotion program participants reported that they felt more alert, had better rapport with their coworkers, and generally enjoyed their work more.

Swedish investigators found that mental performance was significantly better in physically fit workforce than in non-fit workers. Fit workforce committed 27% fewer errors on tasks involving concentration and short-term memory, as compared with the performance of non-fit workers.

The Bottom Line

The following sample of company health promotion health promotion program results have been reported by individual companys -

Company -  Dollars Saved/Dollars Spent

o  Bank of America (Fries) -  $5.96/$1

o  PacBell -  $3.10/$1

o  Wisconsin School District Insurance Group -  $4.47/$1

o  Prudential Insurance -  $2.90/$1

o  Bank of America (Leigh) -  $4.73/$1

o  General Mills -  $3.50/$1

Summary

There’s compelling evidence that a sizable portion of the billions of dollars currently spent by companys on health-related costs is avoidable by means of health promotion programming.

Well-planned, extensive wellness programs (wellness programs and staff member wellness programs) have been proven to be cost-effective, specifically when the wellness programming is matched to the medical problems of the specific staff member

Attempting to do more with less money? Here are three proven ways to align the dollars and cents of a health promotion program in your budget.

Common thread -  the way you prepare - and control - your budget for a wellness program is critical to its success.

1. Top-down health promotion budget

Depending on the size of your organization and health promotion program, you might have full budget responsibility or might need to work with a C-level who’s budgeting specialistise.

Regardless of the arrangement, you’re likely to face one of two distinct challenges -  a top-down budget or a zero-based budget.

A top-down budget is when you’re given a finite dollar amount and told to run the health promotion program within the limit. When that’s the case, here are three critical questions to ask -

• Does this limit include money set aside for staff member incentives and future programs?

• Should we keep long-tenured wellness programs that keep going up in price, and

• Does Benefits/HR have to deliver all education about the wellness program, or is there additional funding to hire staff?

2.  Zero-based wellness budgeting

In zero-based funding, you submit to senior level management an itemized list of the health promotion programs/features you want and the cost of each. Best practices -

• Rank health promotion programs by priority (health-risk assessments must be at or near the top)

• Indicate which expenses are fixed and which are variable, and

• List ways to incorporate existing resources (like an employee assistance program (EAP) program) for a better return on investment.

3. Estimating health promotion ROI

On average, health promotion programs typically take at least 18 months to break even. After three years, you ought to see savings.

When not, it’s time to take a fresh look at the wellness program design.

Given the immense growth of wellness programs over the last two years, it was inevitable resistance would creep up among watchdog groups.

In Washington, lobbyists have spearheaded a push for Congress, the DOL and IRS to crack down on “punitive” wellness programs.

Particularly, the groups seek to limit wellness programs in which employees’ share of their healthcare costs are directly tied to their willingness to participate in a wellness program.

HIPAA’s non-discrimination rules prohibit companys from creating negative financial incentives for workers with health risks.

For example, you can’t raise someone’s premium share because he or she smokes. What you are able to do is offer a discount if someone completes a smoking cessation program.

Reason -  the law does allow for financial incentives to employees who willingly take part in health promotion programs.

The watchdog groups seek greater regulation to be sure incentives and discounts are used only as rewards for healthful behavior, not as a thinly veiled form of discrimination against high-risk personnel.

A recent survey finds nearly 42% of corporations with 200 or fewer workforce have some sort of disease management (DM) program.

That’s a enormous increase from four years ago, when just 28 percent of smaller employers offered such wellness programs.

There’s more to come, too. Fifteen percent of respondents that didn’t currently have a disease management (DM) component to their medical plan hope to add one by 2011.

The highest-demand disease management (DM) programs are for diabetes, asthma and heart disease.

Source -  Small Corporation Benefits Survey, PDR Consulting Group, 9/1/2008.

Thinking about an obesity-related disease management (DM) program for your business? Here’s what you need to know.

In order to be effective, the health promotion program must meet participants’ individual medical and psychological needs, not to mention your own organization’s need to control long-term health costs.

Exactly how wide-reaching should the program be? After all, it does not make sense to pay for services your workers don’t want or can’t use.

Mary Beth Chalk of Resources for Living suggests that obesity programs could be broken down into four tiers of staff member need, from which your organization’s Return On Investment (ROI) can also be measured.

Tier 1 -  Education

Tier I personnel struggle with weight management problems but don’t need a health Coach.  Instead, they might benefit from a self-directed program that provides weight-management related materials online, targeted mailing, and/or access to nurse call line.

Precisely how to measure ROI -  utilization. Do staff members click on the Web site? Do they return to the site regularly? Do people  use the nurse line? Your wellness program vendor should provide you detailed use stats.

Tier 2 -  Clinical supervision

If the worker has been diagnosed as obese - a Body Mass Index  score over 30 is obese, over 35 is clinically obese - he or she would do better working with a wellness coach in a clinically supervised wellness program.

Three keys to getting maximum results -

1. Periodically have participants rate their relationship with their health Coaches. Not everyone clicks, so a change could  be in order.

2. Coordinate your disease management care with your employee assistance program (EAP)services. Reason -  Inability to control weight is often closely tied with psychological health issues - and one can negatively affect the other.

The more closely your EAP and obesity program managers work together, the higher the chance for success.

3. Beware of the fade-out effect. A lot of personnel in weight-loss programs get off to a excellent start and then fall back into old habits. People  should re-commit to the program after three sessions, four months and nine months.

To measure ROI, look at utlization, goal achievement and reduced presenteeism. of course, presenteeism is notoriously challenging to measure with reliable dollar figures. So how can you overcome that problem?

• Start with employees’ salaries. Let’s suppose one participant earns $40,000 a year.

• Ask workforce to self-report how energetic and productive they feel on the job, on a percentage scale. Then have supervisors estimate the employee’s productivity and split the difference. for this example, let’s assume it averaged to 50 percent.

• Collect scores again six months and one year into the program and then multiply the difference by salary.  The result is your estimated productivity Return On Investment (ROI).

In the example above, when the employee earning $40,000 improves from 50 percent to 75 percent after one year, the productivity related ROI is $10,000.  

Tier 3 -  Medical management

At this level, the obese employee needs a higher level of care than a health coach can offer.  The employee has chronic health conditions related to obesity - such as diabetes, high blood pressure, and/or sleep apnea - and needs a physician case manager.

Namely, the employee needs to set up regular visits with the physician and develop a treatment plan.

To measure Return On Investment (ROI), start with the lower-tier criteria, then track quarterly and year differences in FMLA or compensated absences, and prescription drug costs. Then compare it to the per-participant cost of the obesity program.

Tier 4 -  Morbid obesity

At this level, the employee has been diagnosed as morbidly obese - Body Mass Index over 40 - and is considered a potential candidate for gastric bypass surgery.

Return On Investment (ROI) is measured through ongoing health claims as well as the previous criteria.