Employee Wellness Programs sound great, but what defines their efficacy? Is it return on investment? Why should CEO’s care about them? Are they a worthy investment or an expensive burden? In light of raising insurance premiums, can a wellness program really improve the bottom line?
When an organization’s workforce is healthy, medical costs are naturally lower, which keeps insurance premiums to a roar. But, what if a workforce is not healthy and paying large medical costs?
Lifestyle Management interventions focused on decreasing risk factors such as obesity and smoking, improve employee health but are “cost-neutral”, according to Five Steps to a Successful Workplace Wellness Program (RAND) with a $0.25 return for every dollar spent. On the other hand, Disease Management programs return $3.78 in health care costs for every $1 invested, with the conclusion that for cost saving goals, it’s best to target high-risk employees who already have above-average medical costs.
An analysis of medical claims can reveal the necessary data to determine disease risk factors. However, according to Dee Edington, author of Zero Trends “Organizations can no longer wait until employees and their family members become sick. That approach is like waiting for manufacturing defects to occur and then trying to fix them. The economic and human capital value appears as we start to view health as vitality and energy. Keeping the healthy people healthy adds value on both sides of the economic equation: lower disease costs can increase productivity gains”.
Edington adds that the total value of health is greater than the cost of being sick. He breaks it down as “ the sum of the cost of doctor’s visits, hospital stays, pharmaceuticals, absences, short-term disabilities, long-term disabilities, workers’ compensation, and effectiveness while on the job and the person’s impact on others in the organization.”
Investing in employee wellness programs can reduce health care costs and encourage a lower insurance premium, if it’s implemented and executed effectively to the entire group. This can be more effective rather than waiting to rescue individuals, one at a time, when sick. Edington suggests we redefine health as energy and vitality, not just the absence of illness. He suggests five fundamental pillars for a successful wellness program:
- Senior Leadership creates the vision, commits to a healthy culture and connects healthy vision to business strategy
- Operations Leaderships aligns workplace with the vision, brand health management strategies, integrate policies into health culture and engages everyone
- Self-Leadership creates wellness champions that help healthy employees stay healthy and promotes improvement maintenance strategies
- Reward Positive Action rewards wellness champions, set incentives for healthy choices and reinforce along the way
- Quality Assurance: allow outcomes to drive strategy, integrates all resources, measure outcomes and make it sustainable
“Wellness programs are only successful if they have top-down support, and a culture of health is baked into the everyday life of the organization. Walking meetings, healthy options at team lunches and in the cafeteria, a culture that respects a work-life balance and a positive atmosphere are part and parcel to a successful program. If the leaders at the top of the organization model wellness and support it, middle management will follow and support their staff in making the right decisions about their health”, said Toni Sicola, Wellness Program Manager at Alameda Health System and Wellness Expert at cultivatedwellbeing.com.
Sicola knows first-hand the value of an Employee Wellness Program, as she developed Alameda Health System’s wellness program from the ground up, which serves 4,700 employees throughout nine Alameda County facilities. To measure the wellness program, Sicola tracks participation, studies claims data, performs an annual Employee Wellness Satisfaction Survey, Health Risk Assessment and analyzes employee engagement. Their largest employee participation was with an organized step challenge. “We had close to 1,000 employees participate. It was a 100 day step challenge where employees organized in groups of seven and had a goal of 10,000 steps daily for 100 days”.
To circle back to the questions in the opening paragraphs, are wellness programs worth an investment? The answer is yes, but only if we elevate wellness to a priority level.
It’s easy to get lost in the logistics of wellness programs and get stuck on the pretenses that an effective program must be expensive. As mentioned, upper management’s support of a wellness program is crucial as employees will mimic their behaviors. Start small by promoting a healthy culture with healthy food and beverages choices in lunchrooms and company sponsored events. Highlight and promote wellness champions’ achievements such as smoking cessation or weight loss. Integrate wellness into everyday language and meetings. From there, create a structured program with goals and solutions to challenges. Don’t forget to measure and track progress along the way to ensure you are on track with your goals. In the end, focusing on health and wellness is perhaps the number one way to ensure a dynamic workforce, mitigate medical costs and stack the odds in your favor for palatable insurance premiums.
Roseann is UBF's health management practice leader and is the glue that turns wellness into health management. Roseann has many years of experience in health and wellness management as well as much knowledge of nutrition and its industry.