Healthy ROI: As Wellness Programs Evolve, Companies Gauge Their Effectiveness
Wilkerson, April, THE JOURNAL RECORD
Workplace wellness programs are on many business owners' minds, but so are two related concerns: how to calculate return on investment and how to understand legal concerns.
Friday's Health at Work Conference, sponsored by the Oklahoma City-County Health Department, Central Oklahoma Turning Point, Wellness Now and others, tackled those issues and others. Business owners are increasingly looking to wellness programs as a way to lower their health care costs and increase employee productivity and morale. Many programs start small and low-budget and work their way up to clinical wellness initiatives that provide a more calculable ROI.
But determining ROI is often easier said than done. Teah Corley, president of the Oklahoma City business consulting firm PremierSource, said higher ROI comes from programs that deliver outcomes.
"A lot of wellness providers will report on participation," Corley said. "But participation does not constitute engagement. If you really want return on investment, you care about participation, but you really care about outcomes."
Wellness programs have evolved over the years. Five years ago, a wellness program may simply have meant that an employer covered preventive care, offered health fairs and focused on weight management. Today, many are more elaborate, with biometric screenings, health risk assessments and claims integration. Those are the programs that come with the highest ROIs, Corley said.
When an employer can identify its now-healthy employees who are at risk for developing a chronic condition, it stands to make a difference, she said.
"There's been a lot of research done on, 'What if we can identify within that healthy population who's at high risk, treat them and reverse that trend before they ever have a claim?' That's really what this model looks to do - going ahead and treating the chronic conditions and helping people manage them - but the greatest ROI will include a segment for the very targeted risk stratification of that healthy population," Corley said.
The companies making inroads are the ones that are screening for waist circumference, fasting glucose, blood pressure, triglycerides and HDL cholesterol, Corley said. The ROI associated with catching people before they slip into metabolic syndrome is huge, she said. Research has shown that when a person moves from the high risk to the moderate risk category, a $2,000 annual savings per person is realized. That figure increases to $3,000 per person annually going from high to low risk, she said.
Companies can calculate ROI in different ways, from looking at actual claims data to predictive modeling. Most won't see an ROI until three to five years later, she said, but data is starting to mount for the effectiveness of wellness programs. For example, a hospital group had a 10.8-percent annual increase in medical costs from 2002-2006 without a wellness program. It saw that percentage drop to 4.6 percent from 2007-2010 when a wellness program was instituted.
"It didn't get flat during that time period, but look at the difference of what they were able to affect," she said.
Another study of 120 wellness programs showed an average of $3 returned for every $1 spent, she said.
If ROI isn't complicated enough, employers must sift through legal issues related to wellness programs. …