BenefitsEmployee Engagement

Benefits Package: The ROI of Wellness

Engage, measure, discuss, refine. Then, save.

By Heather Provino
More than 90 percent of the nation’s employers offer worksite wellness programs or activities, according to results of the 2004 National Worksite Health Promotion Survey. Some popular initiatives aimed at getting employees healthier include free or discounted gym memberships, annual health fairs, seasonal flu vaccinations, and telephonic health coaching. Over the last decade, more progressive businesses have tempted employees with discounts on health insurance premiums and a number of cash incentives to discourage smoking or encourage weight loss.
While these efforts have driven and improved employee engagement, the current health care environment is moving businesses towards having to consider and implement a comprehensive wellness strategy—one that will ensure long-term success and program impact. Nearly six out of 10 employers do not have a formal policy or strategic plan for their employee health care programs, according to Aon Hewitt. Additionally, most businesses fail to measure the effectiveness of their current wellness initiatives. A recent survey by Buck Consultants found that only 37 percent of employers actually measure program effectiveness.
As health costs continue to rise and the requirements of health reform take hold, having an integrated wellness strategy that identifies measureable and realistic goals makes more business sense with each passing year. This is true for any business, whether it has more than 10,000 employees or fewer than 100. Here are some guidelines to assist you in positioning your wellness program for long-term success and true ROI measurement:
Step 1: Engage Senior Leadership. This is arguably the most important factor. “When the CEO gets behind the wellness initiative, things begin to change,” says Dr. David Hunnicutt, president of the Wellness Council of America. “Employees are more likely to believe the importance of wellness to the company and more likely to participate if senior management is ‘talking the talk and walking the walk.’ Leading by example is a huge motivator.” Before taking the plunge into wellness, HR directors need to have a candid discussion with senior management to assess whether they believe in the effectiveness of wellness programs and whether they can be relied upon for participation.
Step 2: Gather and Assess Data. Chances are you have important information available at your fingertips—workforce demographics, absenteeism rates, condition/disease and prescription data from your company’s health plan. However, claims information might be dated, or your employees might have undocumented health risks that could be overlooked when relying only on claims data. For this reason, health risk assessments (HRAs) and/or biometric screenings provide powerful baseline data from which your business can measure the true impact of its wellness efforts over time.
Employee feedback is valuable as well. Ask them what they want from a company wellness program, how important it is, health conditions they would like to address and incentives they find attractive. They might also identify “wellness champions” in each department—staff members who will actively promote future wellness programs and help you create a sense of connectedness throughout your organization.
Also, gather “soft data” about your business’ work environment and culture. For example, doughnuts provided at each staff meeting would be counterproductive to any future weight management effort, and department managers’ frowning upon workers taking time off to exercise would also be counterproductive. Take stock of these environmental or cultural realities, which must be addressed in order for wellness to truly succeed.

Step 3: Strategy, Interventions, and Goals. A wellness plan should be detailed, focused, and outcomes-oriented—as well as specific to the needs, goals, and culture of your organization. The data collected in Step 2 is vital in helping employers create a wellness strategy. Consider the goals of your business’ strategic growth plan and how wellness will assist in achieving some of those goals.
Next, review the aggregate HRA/biometric data of your employee population to identify your organization’s most prominent health risks. To address and reduce these health risks, HR professionals are then tasked with establishing integrated programs, which consist of specific, measurable, achievable, and realistic goals with specified time frames. “For health promotion programs, you need to map out a strategy that includes realistic and achievable goals for health outcomes based on your specific employee population,” says Tracey Moorhead, president and CEO of the Care Continuum Alliance, an industry group for wellness, prevention, and chronic care stakeholders. “You also need to understand the timeframe for achieving the desired outcomes, which can vary by employee population, and recognize that it may take time to see a significant impact on health status. It won’t happen in three months or six months.”
Step 4: Establish a Communications Plan. An effective communications plan is vital to the success of every wellness initiative. Employees too often experience communication overload and do not pay attention to all the communications they receive. It is best to use multiple channels to reach employees including, but not limited to, the company intranet, emails, newsletters, posters, cafeteria promotions, handouts, and verbal reminders from supervisors (one-on-one or before the start of meetings). Test communication concepts and materials with a small sample of employees to ensure that your messages are being heard and are perceived as motivational.
Step 5: Measure, Evaluate, and Refine. We’ve all heard it. For every one dollar spent on wellness, three dollars in health cost savings and increased productivity are generated. Or is it four dollars? Or even five? The seemingly subjective nature of measuring ROI from wellness might have made a skeptic of your CFO (and you), but several measurement alternatives exist.
The “best” form of measurement is what most appropriately reflects value to your executive team. For many, participation or completion rates are sufficient, while others prefer adherence rates or risk migration reporting. Risk migration ROI calculations use a cost extrapolation methodology, which takes current research to calculate the cost savings of an employee’s reduction in health risk(s): for example, the money saved from an employee whose risk of diabetes changed from “high” to “medium” or “low” risk. While risk extrapolation is a predictive method of ROI (not based on actual claims data), it can provide an approximate, hard dollar value of savings—that results from employees’ healthy behaviors—using comparative baseline biometrics or HRA data. Over time, if risk migration is used consistently, employers will be able to measure the impact of reductions in medical claims, pharmacy claims, worker’s compensation and disability costs, as well as overall retention.
The time to establish a wellness strategy and to measure its long-term impact on your organization is now. Last year, employers spent 35 percent more (roughly $220) on each employee who participated in a wellness program compared to 2009, according to Buck Consultants’ recent survey of more than 1,200 organizations. Your business might spend enough already. It cannot afford to spend more valuable resources—time, money, and lost productivity—on piecemeal efforts that only focus on short-term results. Invest in a sound strategy to yield greater and more sustainable health care savings for your business.

Heather Provino is the chief executive officer of Provant Health Solutions, a national provider of health and wellness services. She can be reached at 401-885-463 or


Tags: Benefits, Engaged Workforce, HRO Today Global

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