Wellness Programs Economic Considerations.   

Initially introduced by Halbert Dunn in the 1950’s, wellness became a popular buzzword during the late 1970’s and received considerable academic attention in the 1980’s.     

Wellness programs for workers became more widespread during the following decade, and credible evidence for their economic viability started to be published.     

There have now been over 100 published studies on this topic and a number of systematic reviews.

Health risks increase costs.  Medical and health insurance costs escalate with both age and number of risks present.8,10   the number of risks is also strongly related to sick leave absenteeism, Employee’s Compensation costs, short-term disability, and decreased productivity (”presenteeism”).

Early worker wellness programs were relatively basic and normally produced a return on investment (ROI) of less than one dollar for every dollar spent operating the program (ROI = <1 - 1).8

Such programs could  be characterized as “fun-oriented”.  Participation is entirely voluntary, and there’s no particular focus on the reduction of especially identified high risks.  

Interventions and activities are not customized, and there’s no emphasis on the management of medical costs.  These programs are ordinarily site-based only, lack options to address all of the major behaviorally-related health risks, and lack multimodal presentation.  

Minimal or no incentives are provided to employees for participation, and services to spouses and family members aren’t available.  Most such programs lack meaningful examination.  

More conventional programs are “activity-oriented” and have shown an ROI of between 1 – 2.5 and 1 – 3.5.8 These programs might have a greater emphasis on health and risk reduction, although the efforts are relatively broad and not personalized.  

They might have some generalized emphasis on medical cost management, although not necessarily aimed at specific high risks.  Most are site-based and voluntary, with spouses included only rarely.  

Modest incentives may  be utilized to encourage participation.  Formal evaluation may  be weak.

The newest and most economically viable programs are “results-oriented” and exemplify the health and productivity management model.  These programs consistently produce return rates of 1 – 4 or greater within a 12-24 month period.8  

Such programs are strongly focused on the reduction of particularly identified high risks and the management of healthcare costs.  They are typically voluntary, but use strong financial and other incentives to promote participation.  

They’re multi-component in nature (address all major risks), and have both on-site and virtual modalities of operation.  The interventions are highly targeted and individualized, and offered to spouses in addition to workers.

For corporations, the cost of providing medical insurance for their staff members is of excellent importance.  Those costs have been increasing at annual rates between 6% and 14%.

Chapman’s 2007 systematic review7 announced an average reduction in health care costs of 26.5% as a result of worker wellness programs.  His review covered 60 of the most scientifically exact studies, with an average of 3.77 years of study.

Absenteeism due to illness is another cost driver.  Chapman’s review7 reports an typical reduction in sick leave of 25.3%.   Cost for Employee’s Compensation was reduced by 40.7%, and disability costs by 24.2%.

There’s also an emerging literature on the costs of presenteeism (reduced productivity).11,13  In one study, every risk reduced through a wellness program yielded a 9% reduction in presenteeism (and a 2% reduction in absenteeism).11

Some companies have achieved a zero% increase in healthcare costs across at least brief periods of time.10  Doing so requires 90-95% participation of the worker population in focused wellness programs, with 75%-85% of the employees falling into the low risk category.10     

Although extensive efforts to lower the risk status of those in moderate or high risk categories ought to be made, the needs of currently healthy employees ought to be addressed as well to avoid increases in risk-status.   

Given the size of the federal workforce, meaningful cost savings in the government’s contribution to medical insurance premiums for employees may be achieved when a majority of that population were participating in active wellness programs.     

Similarly, improvements in absenteeism, employee’s compensation, disability, presenteeism, and turnover thus of extensive employee wellness programs would yield substantial fiscal benefits for the government.   

References   

1   Aldana, Steven G.  (2001)   Financial Impact of Wellness Programs –   A Robust Review of the Literature.   Am J Wellness 15(5) – 296-320.

2   Chapman, Larry.  (1998)   the Role of Incentives in Wellness.  The Art of Wellness  2(3) – 1-8.

3   Chapman, Larry.   (2003)   Biometric Screening in Wellness –   is it Really as Important as We Think?  the Art of Wellness  7(2) – 1-12.

4   Chapman, Larry.  (2005)   Meta-Examination of Corporate Wellness Economic Return Studies –  2005 Update.  The Art of Wellness, July/August, 1-15.

5   Chapman, Larry.   (2006)   Worker Participation in Corporate Wellness and Wellness Programs –   How Important are Incentives, and Which Ones work Best?   North Carolina Medical Journal   67(6) –   431-432.

6   Chapman, Larry, Lesch, Nancy, and Passas Baun, Mary Beth.   (2007)   the Role of Wellness Coaching in Corporate Wellness.   the Art of Wellness, July/August, 1-12.

7   Chapman, Larry.  (2007)   Proof Positive –   an Analysis of the cost-Effectiveness of Corporate Wellness.  Northwest Health Management Publishing, Seattle, WA.

8   Chapman, Larry.  (2007)   an In-Depth Look at the Economic Evidence for Rewarding Health Behavior Change.   Workshop presentation at the World Research Group “Rewarding Healthful Behaviors for Health Plans and Employers” Conference, Orlando, FL, January 23-24.

9   Edington, Dee.   (2001)   Emerging Research –   A View from One Research Center.  American Journal of Wellness 15(5) –  341-349.

10   Edington, Dee W.  (2007)   Health Management as a Serious Company Strategy.  Presentation at the World Research Group “Rewarding Healthy Behaviors for Health Plans and Companys” Conference, Orlando, FL, January 23-24.

11   Pelletier, Barbara, Boles, Myde, and Lunch, Wendy.  (2004)  Changes in Health Risks and Make certain to work Productivity.   Journal of Occupational and Environmental Medicine, 46(7) –  746-754.

12   Pelletier, Kenneth R.  (2005)   A Review and Analysis of the Clinical and Cost-Effectiveness Studies of robust Health and Illness Management (DM)Programs at the Worksite –  Update VI 2000-2004.  JOEM 47(10)1051-1058.

13   DeVol, Ross, Bedroussian, Armen, et. al.  (2007)  an Unhealthful America –   the Economic Burden of Chronic Illness.  Report released by the Milken Institute.   www.milkeninstitute.org.

14   Partnership for Prevention.  (2008) Investing in Health –   Proven Wellness Practices for Workplaces.   http – //www.prevent.org/images/stories/2008/investinginhealth_finalfinal.pdf.