Corporate Wellness Blog

Health promotion 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 ROI.  And wellness ROI is tougher to calculate than, say, a 401(k).

18-month guideline

Current studies have established some benchmark data on wellness ROI you can use as a guideline. It’s useful whether you already have a wellness program or are thinking about starting one.

It usually takes at least 18 months from the launch of a wellness program to see any leads to your health care plan bottom line.

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

By and large, the long-term cost savings from a health promotion 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 employer is about $3 to $5 per participating employee per month. Within three years of launch, you should be seeing significant savings.

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

Consider making wellness programs budget-neutral

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

In other words, the health promotion program neither adds to your healthcare costs at the outset, nor reduces them. Example –  You plan to roll out a health promotion program effective Jan. 1.  The health promotion program will cost the business $5 per worker.

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 personnel 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 health promotion programs pay off about the same – meaning staff buy in and participate at the same rate – whether they’re budget neutral or the business absorbs the cost.

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

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

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

Several 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 organization or their personnel. More lately, organizations have refined the planning of the events to serve in particular to launch or promote a health promotion program.

To be successful, the events need to serve two purposes – increaseing staff member education and building their enthusiasm to take part in the wellness program.

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

Health 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 experts said the more newfangled events were more like “disease fairs” than “health fairs.” In other words, the tone was little too somber and workforce weren’t namely tuned in because they weren’t enjoying themselves.

Health Promotion program advisor 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, staff still need an incentive to attend the fair and get the desired screenings, besides to doing the fun stuff. Some real-life health promotion programs that’ve worked –

• A contest offering prizes to workers 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 additional 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 use of tobacco at any age can improve a person’s health.

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

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

Bottom line –   Given the aging employee population and the cost of retiree health care, you may want to keep attempting with smoking cessation education for your older workforce.

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

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

Let’s look at the relationship between your wellness program and your EAP to illustrate the importance of attacking health care costs cross a broad front.

You can start a wellness program with a health risk appraisal and then, when appropriate, roll out a use of tobacco cessation program or a weight loss program.

But ultimately you want to make certain that your wellness vendor works joined with your EAP vendor.

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

The same thing escorts the relationship your health promotion program and your workers’ comp vendor, STD and LTD vendors, rehab individuals , and/or illness 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 employers who achieve the greatest cost savings through their health promotion programs are the ones who overlap wellness with behavioral and occupational health issues.

Attempting to do more with less money? Here are three proven ways to align the dollars and cents of a wellness 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 business and wellness program, you may have full budget responsibility or might need to work with a C-level who has budgeting professionalise.

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 wellness program within the limit. If that’s the case, here are three crucial questions to ask –

• Does this limit include money set aside for worker incentives and future initiatives?

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

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

2.  Zero-based wellness budgeting

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

• Rank wellness programs by priority (health-risk assessments ought to be at or near the top)

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

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

3. Estimating health promotion Return On Investment (ROI)

On average, wellness programs generally take at least 18 months to break even. After three years, you should see savings.

If not, it’s time to take a fresh look at the health promotion program design.

Given the gigantic growth of health promotion 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.

In particular, the groups seek to limit health promotion programs in which employees’ share of their healthcare costs are directly tied to their willingness to take part in a health promotion program.

HIPAA’s non-discrimination rules prohibit businesss from building negative financial incentives for staff members with health risks.

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

Reason –  the law does allow for financial incentives to staff who willingly participate in wellness 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 staff members.

A recent survey finds nearly 42 percent of businesss with 200 or fewer staff members have some sort of disease management (DM) program.

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

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

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

Source –  Small Employer Benefits Survey, PDR Consulting Group, 9/1/2008.

Thinking about an obesity-related disease management (DM) program for your corporation? Here is 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 care costs.

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

Mary Beth Chalk of Resources for Living suggests that obesity programs may 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 workers 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 Return On Investment –  utilization. Do staff click on the Web site? Do they return to the site regularly? Do individuals  use the nurse line? Your wellness program vendor should provide you detailed use stats.

Tier 2 –  Clinical supervision

If the staff member has been diagnosed as obese – a Body Mass Index (BMI)  score over 30 is obese, over 35 is clinically obese – he or she’d do better working with a health coach in a clinically supervised health promotion program.

Three keys to getting maximum results –

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

2. Coordinate your disease management (DM) care with your staff member assistance program (EAP)services. Reason –  Inability to control weight is often closely tied with mental health issues – and one can adversely affect the other.

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

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

To measure ROI, look at utlization, goal achievement and lowered presenteeism. of course, presenteeism is notoriously difficult 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 per year.

• Ask workers 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, if the employee earning $40,000 improves from 50% to 75% after one year, the productivity related Return On Investment is $10,000.  

Tier 3 –  Medical management

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

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

To measure Return On Investment, begin 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 (BMI) over 40 – and is considered a potential candidate for gastric bypass surgery.

ROI is measured through ongoing health claims as well as the previous criteria.

Develop a culture of wellness within your company

Create Exemplary Management Support

In the most successful Wellness Programs, upper-level managers lead their organizations by example.  And they work to ensure that the upper-level management structure not only allows, but actively encourages their workers to participate.

Organize a Wellness Advisory Team

Wellness committees serve as the eyes, ears, arms and legs of the wellness program, representing coworkers ideas and concerns, and helping reshape the organizational culture toward health.

Conduct an Assessment of Financial and Human Assets and Liabilities

Successful Wellness Programs are built upon a foundation of information, including claims review, demographic analysis of the workforce, senior management and staff member surveys, health risk data, history of organizational wellness, and health benefit plan design.

Develop Obviously Reported Vision, Mission and Outcomes

Establish a clear vision of health promotion program direction, expectations and measures to answer the questions, “Where are we going and how’ll we know when we get there?”

Develop a Robust and Strategic Wellness Program

A multi-component plan should consist of strategically developed and implemented awareness, lifestyle change, and supportive environment programs, in addition to policies and activities that target appropriate health risk behaviors and needs of the staff members.

Identify an Incentive and Reward Strategy

Incentives show the organizational commitment to the health promotion program and motivate individuals to participate. Incentives vary widely from program to program, but can include such things as time off, reduction in health insurance premiums or co-pays, cash incentives, discounts to fitness clubs, free pedometers, etc.

Communicate to Employees

Your wellness program should be simple and concise, use an identifiable brand, and rely on a variety of media to communicate with workers and managers.

Evaluate Outcomes

Evaluate wellness program participation, satisfaction levels and behavioral change. You could want to track the number of workers’ compensation claims, productivity, turnover morale and absenteeism.

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Wellness Program – Management Support.

Develop Exemplary Management Support

Goal –  A Health Promotion Program established into the organization’s culture.

Focus – Develop support and excitement for the wellness program from all levels of the corporation –  executive management, mid-level management, and grass-roots employees.

Obtaining executive management’s buy-in is essential to launching an effective health promotion program.  The employees must understand that executive management is supportive of the health promotion program.

Actions –

Develop an Upper Management Executive Team to determine high-level decisions – positions that ought to be included are the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Communications Officer, and other appropriate division-level managers and health promotion program specialists, as necessary.

The Upper Management Executive Team will –

• Communicate to all levels of upper-level management about the wellness program and drive the integration of the Health Promotion Program as a part of the corporation culture.

• Ensure that organizational resources are available for health promotion program planning and implementation.

• Make sure to encourage workforce to participate and to assist in “recruiting” other workforce, get the momentum going, and keep it growing.

• Share success stories within the organization, and continue to raise the perceived value of participation.

Organize a Health Promotion Advisory Team

Goal – Develop a working committee that consists of workforce and essential functional parts of the business.

Focus –  to assist in reshaping the organizational culture to support employee-wellness activities by serving as couriers and supporters for the health promotion program.

Health Promotion Advisory Committees serve as an essential part of the infrastructure of your Health Promotion Program.  The team members are the eyes, ears, arms, and legs of the health promotion program.

They represent their peers by sharing ideas and concerns about the health promotion program.

Actions –

The Health Promotion Advisory Committee will –

• Make certain to work with upper-level management and the Health Promotion Program coordinator in the design, implementation, and evaluation of the wellness program.

• Develop methods to enhance the acceptance and success of the activities of your Health Promotion Program by stimulating worker ownership of the health promotion program.

• Hold periodic meetings to keep the committee informed of upcoming plans and events and to provide feedback to the wellness program coordinator about their thoughts, ideas, and suggestions, and those of their peers.

• Recommend policy and environmental changes that are aimed at improving the health and safety of employees.

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Health Promotion Program – Vision and Mission.

Goal – Develop a baseline of information and identify human and organizational needs.

Focus –  Review a variety of information to better understand past and current conditions regarding health care utilization, organizational culture, demographic overview, and wellness programs.

Data collection plays an important role in planning, monitoring, and investigating  a wellness program. It’ll also set the baseline for continued and future examinations of wellness program efficiency, effectiveness, and feasibility.

Actions –

• Claims review (health care, pharmaceutical) –

• What have been the 10 most costly major disease categories in each of the past five years? What are the number of claims and dollars paid for each?

• What have been the 10 most expensive therapeutic classes of drugs in each of the past five years? What are the number of claims and dollars compensated for each?

• What have been the 10 most frequently prescribed and filled therapeutic classes of drugs in each of the past five years? What are the number of claims and dollars compensated for each?

• Demographic analysis of employee population (may include dependents) –

• List your number of workforce, by gender, for each of the past five years and the percentages of males and females by age groups.

• Think about any other factors that might have affected the health of your workforce and their use of the healthcare system.

This may include mergers, acquisitions, worksite trauma, staff member strikes, layoffs, early retirement offers, etc.

Management survey –

• Conduct surveys of mid-level management to understand their concerns and measure their level of interest and buy-in.

• Employee-interest survey –  Gather information to find out what the staff members want and to measure the level of participation, satisfaction, and “success” of any previous activities.

Risk data (health-risk assessments) –

• Is there any data from health-risk appraisals over the past five years?

Participation in similar activities –

• List and describe all health promotion programs that have been implemented over the past five years, including participation rates.

Design of the health plan, and anticipated changes –

• Have there been any significant changes in the health plan’s design in each of the past five years, like a change from an HMO to a PPO, increased co-payments or deductibles, or increased employee contributions?

Create Clearly Reported Vision, Mission and Outcomes

Goal –  Establish a clear vision of wellness program direction, expectations, and measures.

Focus – Setting a vision, mission, goals and goals to keep your Health Promotion Program focused toward its desired outcomes. It will answer the questions, “Where are we going?” and “How’ll we know when we get there?”

Actions –

• Identify two to five clearly announced goals. Make sure that your wellness program is capable of having an impact in the area desired, and be sure that you’re capable of measuring that impact.

Example Goal – Staff Members having access to healthier food options

• Launch two to five measurable objectives that in particular state what your wellness program is going to accomplish, by when, how, and how it will be measured.

Example Objective –  Modify all vending machines to include 50 percent healthy food choices.

• Identify several activities that’ll help you achieveyour objective. Activities are very specific.

Example Activity – Make sure to work with vending machine owners to identify healthy food choices and restock with 50% of items that are healthier food choices.

• Identify who’s going to do what, by when, and what resources are needed.

Example Detail –  the Program coordinator will contact XXX Vending Corporation by September 30.

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Health Promotion Program Incentives.

Develop a Extensive and Strategic Health Promotion Program

Goal –  A extensive Health Promotion Program plan.

Focus –  Development of a plan that consists of a selection of awareness, lifestyle change, and supportive environment program, policies, and activities that’ll target risk behaviors, needs, and interests of staff members.

Your Health Promotion Program should provide an integrated, strategic approach specific to the needs, objectives, and culture of your organization, designed throughout an annual cycle.

It’ll be vital that you review and revise existing policies governing such areas as use of tobacco, vending machines, and the staff cafeteria. Furthermore, it is useful to examine what corporate wellness or health-promotion activities are offered under your existing health-benefit plan.

Actions –

• Create activities based on your health promotion program goals and the specific needs of your staff members. Focus on those topics that are of greatest interest to your staff members and the greatest needs of your corporation, in that order. Prevent topics with narrow appeal.

• Keep it simple. Design the wellness program so it’s easy for the participants to understand and track. Let workforce focus their learning efforts on their own behavior, not on the rules and regulations of the wellness program.

Moreover, simplify the health promotion program administration. Let individuals  record their own activities when possible; develop a mixture of self-reported activities along with verified activities.

• Integrate a combination of activities to include awareness, educational, and behavior elements. Link the activities throughout the year to allow for desired behavior repetition.

• Choose activities that every worker can participate in.

Examples –

• Challenges –  Activities that focus on practicing a desired behavior and continue for 4-8 weeks and focus on specific topics (such as exercise, nutrition, or stress management).

• Learning experiences (seminars, videos, classes) –  One-time activities that last for a relatively short time and focus on a specific topic; these can precede “challenge activities” to prepare participants for behavior change.

• Behavior changes (like use of tobacco cessation) –  Interventions may or might not be offered at the workplace; person should be encouraged to make lifestyle changes that they wanted to make even without the incentive.

• Illness management (support and education groups for diabetes and hypertension) –  These could  be provided or supported by the company through disease-management vendors, or by community, health, or religious organizations.

• New skills (first aid, cardiopulmonary resuscitation) –  These may  be provided or supported by the organization, or by community, health, or religious organizations.

• Screenings, wellness assessments, physical exams –  A wellness assessment provides the corporation with aggregate data that may be used in wellness program planning and analysis; preventive screenings and physical exams may be encouraged by awarding credits to personnel.

• Program support (membership or leadership in wellness committee or challenge team) –  Reward those who work with you to help make your Wellness Program a success.

• Community events –  Reward participation in events like the Heart Walk or March of Dimes Walk; limit the number of these events that could be counted toward the annual total, and be selective about which events you allow to be counted.

Develop an Incentive Strategy

Goal –  to motivate and reward employee participation and completion.

Focus – Create a sense of interest in participation and completion of wellness activities.

Providing incentives and rewards will send an important message to the employees that the organization is committed to bettering their health and will share the rewards that these changes will bring. It also plays a significant role in arousing person to participate.

Actions –

• Identify through staff members what incentives they value most.

• Identify what incentives the business can provide.

• Integrate your incentives into your benefits strategy.

• Ensure that every participant who achieves a goal receives some recognition.

• Make available participation incentives.

• Avoid offering incentives for the “best” or the “most.”

• Avoid rewards for biometric changes.

• Use incentives to promote your Health Promotion Program, through logos and branding.

Examples –

Paid time off, reduction in health insurance premiums or co-pays, cash incentives, discounts to health and fitness centers, free pedometers, etc.

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Wellness Program Communication.

Goal –  Increase awareness of and participation in the Wellness Program.

Focus –  Promote the Health Promotion Program to staff members to encourage participation in activities and benefits.

A well-designed communications strategy is paramount to successful wellness program awareness and participation. Even a “world class” wellness program design won’t succeed when nobody knows that it’s available or how to get involved.

Workers who do not get involved in the health promotion program must be doing so because they select not to participate, not because they didn’t know about how, when, or where to participate.

Actions –

• Conduct a Resources and Communications Audit to identify internal and external resources available to support your Wellness Program, in addition to knowing how information will be disseminated.

• Keep the health promotion program simple and concise –  easy to read about, understand, and act upon.

• Build the brand; be certain it’s something that personnel can identify with. Add the brand to T-shirts, water bottles, mouse pads, stress balls, etc.

Use a variety of media –

• Print – handouts, fliers, posters, banners, paycheck inserts, newsletter articles, bulletin boards, literature racks, post cards.

• Electronic – Web, intranet, e-mail, closed-circuit TVs, sign lines, audiovideo productions.

• Staff meetings and corporation events; word of mouth.

• Use existing channels of communication – what works best in your corporation – and be sure to know about all points of contact and systems of distribution.

Timing for communications –

• Prior to activity to develop awareness and to educate.

• During activity to stimulate participation.

• After an activity to report results.

• Between activities to maintain momentum and interest.

Consistency of communications –

• Use branding; maintain a consistent look, feel, and tone of messages.

• Maintain this consistency throughout the health promotion program.

Surveys and forms –

• Collect information.

• Disseminate information.

Research studies show that untargeted health-promotion campaigns have little long-term impact.
Chronic illnesss, which rob person and families of their health and happiness, represent major costs to businesss in the form of healthcare and disability costs, lost productivity, and absenteeism.
Health Promotion Programs should address risky behaviors that can help your staff members eat healthier, increase their level of physical activity, help reduce stress, lower blood pressure and cholesterol, and quit use of tobacco. Wellness programs should focus on helping staff members achieve and maintain their optimal health status.

Comprehensive wellness programs focused on changing lifestyle behavior have been proven to yield a $3 to $6 return on investment for each dollar invested. It takes about three to five years after the initial wellness program investment to realize these savings.

Ninety-three percent of USA businesses offer some type of health promotion program for their staff, but is it the right type?

Main Types of Health Promotion Programs

Programs focusing on illness management. These wellness programs monitor and treat specific illnesses. Disease management follows the 80/20 rule –  80 percent of healthcare costs are spent on 20 percent of workers.

Illness management is announced to have a $7 to $10 return on investment within a year.  The 20% of staff requiring the greatest medical expenditures today are generally different 20% who’ll cause the greatest healthcare costs a year or two down the road.

Programs focusing on health enhancement and risk management. These health promotion programs focus on lifestyle behavior change, and offer a $3 to $6 return on investment within two to five years, according to a 2004 report issued by the National Business Group on Health.

It’s vital that you note that a $3 to $6 return on an entire employee population produces a higher sum savings than does illness management.

Good Data Drives Good Business Decisions

• Based on more than 120 research, the National Business Group on Health stated that, within five years of health promotion program implementation, overall benefit-to-cost ratios (return on investment) of –

• $3.48 in decreased health care costs per dollar invested.

• $5.82 in decrease rates of absenteeism per dollar invested.