When thinking of an investment worthy workplace wellness program, the first thing we have to look at is the definition of what components constitute a workplace wellness program. Not all workplace programs are created equal. For instance, some people might consider having a newsletter or administering a walking program, and that really is not enough for those looking at attempting to have a return on investment. Wellness programs have become a standard part of a corporation’s benefit offering. If you believe the numbers reported about workplace wellness, up to ninety percent of employers indicate that they have a wellness program.
However, what that program might be is the question, and companies should make sure that these programs being put into place are powerful enough to make an effective change. Companies need to make sure they have a way of measuring that change. Just because wellness programs are ubiquitous does not mean that they are all effective. Some of the latest survey data on workplace wellness indicates the field is making some positive strides in the right direction, but it is also clear we have a long way to go.
When you look at the rates of smoking, in particular, there are fewer smokers today than in the past. However, we have only moved the needle from 23 percent to just under 20 percent. It is a move in the right direction but given all of the things that are in place in terms of cigarette regulation, premium differentials, and other things employers are doing with regard to smoking cessation… and the fact that public opinion has seemed to turn on smokers, then one might interpret the fact that we have only gotten to just under 20 percent as not that impressive. Especially when you consider that typically the excess medical costs for a smoker is about $1600.00 more per year than a non-smoker and that smokers are admitted to the hospital twice as often as nonsmokers. These types of statistics are not surprising but important things to keep in mind none-the-less. And it’s not just medical costs that are a concern, it is absenteeism as well. On average smokers are absent typically about 50 percent more often than nonsmokers.
Smoking is Not an Employer’s Only Problem
Obesity is also a leading cause of health costs. About 65 percent of Americans are either overweight or obese. An organization might ask, how are we going to make a change regarding obesity? How can we possibly get our employee population healthy when more than half of the people in the United States are overweight? Well, studies suggest that if your employees lose just five percent of their weight (even if they would still be considered overweight) it can have a positive impact on their health in terms of better health outcomes, especially if they have a chronic condition like diabetes or cardiovascular disease. Reducing weight also generally reduces the likelihood that your employees will develop these conditions.
None of these issues are something that we should ignore and we should absolutely celebrate that workplace wellness is movement in the right direction. We have to focus on modifiable health risks. Those things we can change. We can change whether we smoke. We can change whether we eat too much, and of course, we can change how we exercise.
Establish a Good Baseline
One thing to keep in mind when you are measuring wellness programs is to make sure you have a good baseline: your company’s medical claims costs, your company’s disability claims, your company’s pharmacy costs, other related costs, etc. Baselines are going to help you have more accurate measurements of the impact of your wellness program. Also, one of the challenges of measuring return on investment is whether you want to look at the specific group it is affecting, or look at your entire employee base. You need to engage your employees to change them, but some programs are good at making an existing group better, some are good at engaging new participants, and some are good at both. However, if you do not set up your measures knowing exactly what question(s) you are trying to answer, the positive relationship between the wellness program component that you’re putting in place and the changes in the baseline measures you are looking could be improperly skewed and muddy the narrative.
Return on Investment vs. Value of Investment (ROI vs. VOI)
Some argue this is just an acronym change, or worse, smoke-and-mirrors from the wellness industry. When examined in the context of workplace wellness programs traditionally ROI focused mostly on medical claim cost savings. In recent years analysts have been expanding the definition to now look at things like participation, engagement, absenteeism, and productivity. Since corporate wellness tends to be more focused on savings than a “return,” other areas positively impacted by corporate wellness programs are now being measured and that’s why we have seen the evolution of the value of investment.
So What Are You Really Getting Out of Your Wellness Program?
How is corporate wellness positively impacting your bottom line? That is really what this concept of ROI is meant to measure. However, you really should look at both of these terms – ROI and VOI – if what you are looking to measure is impact. You are spending money. You expending effort on wellness programs. What are you getting out of it as an organization? For instance, for some companies retention is an incredibly important factor, particularly for industries in the very competitive markets. Also, workplace wellness programs are now generally seen as kind of a standard part of any organization’s benefits package. There is something to be said about making sure you have a workplace wellness program in place so that you can be an employer of choice with rich and robust benefits offering.
There are bottom line costs that organizations must incur when they have employees who are not optimally healthy. As companies, we care about the people who work for us, and as employees ourselves we are all on a journey to obtain more optimal health and reduce the risk factors that we all carry around. Some of these risk factors are things that we can change, and that’s why we call them modifiable risk factors. It is the benefit of interventions that affect these risk factors where an organization can look at traditional ROI measurements to see if the intervention resulted in lower benefits costs.
Look at Health Risk Factors that are Modifiable
What can we change as organizations? How can we change it? How as employers can we best make sure that we are encouraging individuals to make movement in the right direction? What are the key components?
Key Components of a Wellness Program
Years ago before wellness was part of our everyday vernacular, corporate wellness was basically simply the health risk assessment (HRA). The University of Michigan now has over 25 years of data to support the fact that there is value in doing health risk assessments. Although it has its critics, it is really a standard part of workplace wellness in terms of health management. The value is not just in the report an individual gets back, basically their health report card. It is also in the aggregate data the organization receives. That is why the HRA is an important component of designing wellness programs and measuring ROI, because that aggregated data has documented validity a can provide organizations change in their programs’ key performance indicators (KPIs) year over year.
Biometrics are another great source, whether you choose to provide access through onsite programs or offsite preventative screening through your benefit plan, biometric data is great because it is objective. We generally know this information is fairly accurate and we can look at it on a population basis. Also, it is arguably one of the strongest ways to quantitatively see the impact of behavior change components of workplace wellness programs.
- Are we making any kind of change in BMI?
- Are we making a change in blood pressure rates?
- Are making a change in the total cholesterol and the blood glucose rates?
All of these questions are important in terms of managing overall health and the likelihood of developing chronic conditions. As employers concerned about the efficiency of our workplace wellness program, these questions are also incredibly important to consider when looking at the health of our employee population.
- Behavior Change
The second component to critical examine is behavior change. If we aren’t changing anything, how do we expect to get a return on our investment? That is really where behavior change becomes important. Those particular pieces of the program that result in people modifying their lifestyle risks. Behavior change is really just a fancy way of saying: getting people to quit smoking, moving more and eating better.
We all know that we should do these things. The challenge is knowledge alone is not an enough. That is where wellness programs can really shine, in terms of the way they can get employees to engage.
- Investment Worthy Workplace Wellness Program Engagement Strategies
Lastly, the engagement strategy. This is the unsexy part of wellness, but it is one of the most important parts. Employers often have an aversion to having to invest in employees to be healthy, and engagement strategies defer this by attempting to intrinsically motivate and extrinsically reward an organization’s workforce. The practice of paying an employee to fill out a health risk assessment is antiquated. The process is only 10 minutes of work, and the measurement instrument alone really does not result in anything. A better approach is somehow using your incentives and linking them to some sort of health expenditure. This increases the employee’s participation in funding their own healthcare.
A big part of engagement is also effective communication. Typically you are going to have to message an employee multiple times to get through to them, even if you are a very sophisticated employer with good communication channels. Putting one article up on an Intranet is really not going to be enough to move your wellness program forward. You need to have a varied, yet comprehensive, communication campaign. Never underestimate the power of word of mouth as well. Getting wellness champions embedded in an organization’s environment is key, since leadership is an important element of effective communication. This also highlights the importance of company culture. If you have ginormous cookies available at every big meeting as the company’s snack of choice it really sends a very mixed message regarding how health is viewed within the organization.
Value-based Benefit Design
Value-based benefit design is a way to look at incentivizing or engaging employees and wellness programs. Rewards and incentives are tied to HRA and/or biometric data, and this becomes compulsory (by the employee) in order to have access to preferred health plan options. Within this paradigm there is a heavy focus on outcome, so you have baseline data HRA and/or biometric data for an individual for things such as blood pressure, cholesterol, BMI and blood glucose. If the employee is at acceptable measures they are rewarded with incentives. If they do not meet those standards (ex. they have an elevated BMI or their cholesterol is non-optimal) they are given an opportunity to engage in some kind of behavior change component. Rewarding the behavior change intervention is a way to incentivize healthy behavior despite the fact that the employee did not meet initial healthy criteria and then would be eligible for a premium differential through the intervention. The goal being that the employee would start to make lifestyle changes that would get themselves into an optimal range for the biometric measures that are associated with the development of chronic conditions.
Workplace wellness use to talk about carrots and sticks. Now we talk about value-based benefit design. This is a much more understandable and transparent way of engaging folks in wellness, especially when the employee is confident that as an employer you are never going to see someone’s individual data without the consent of the employee. And letting the employee know, giving them a chance to be in charge of their own wellness is important.
Important Program Elements to Track
What should you be tracking when you look at this information? You are really trying to implement at a very basic level some kind of behavior change initiative(s) around lifestyle risks. This is important not to forget when an organization is developing its program. It sounds somewhat simplistic when you say organizations just need people to basically start doing healthy things, but it is getting people to do healthy things that is the hard part. Seventy-five percent of our healthcare costs (as estimated by the CDC) are related to the things that we can change, mainly smoking and obesity. So tracking and helping an employee improve has a real impact, on the employee and healthcare costs. Since each organization and employee base is different, good benchmarks are important. That means getting health risk assessment data and biometric data specific to your organization so you know where you stand in terms of BMI, blood pressure, blood glucose, and cholesterol. Measuring the productivity of employees and impact on productivity is also important. An organization should also track the impact on medical claims. The estimate commonly cited is that 25 to 40 percent of these claim costs are avoidable – either through prevention, early detection, or physical activity.
What health risks impact employee productivity?
Typically productivity correlates with BMI, high cholesterol, blood glucose, high blood pressure, smoking and low activity. Blood pressure has a couple of statistics that support this. An incredible number of people actually have high blood pressure, yet it is one of the least compliant medications. Employees that keep their blood pressure within a healthy range decreases their risk for strokes, cardiovascular disease, heart attacks, and other very costly chronic conditions as well. About 31 percent of the population as a whole has high blood pressure. This is not something that we should ignore in terms of focus, whether it be a health education program or giving people resources about what they can do to improve.
Smoking (and the benefits of stopping) needs little discussion. Blood glucose is commonly associated with diabetes, so it important employees keep their blood sugar in a healthy range. One can have early onset diabetes and not necessarily even realize it. Early detection can really play an important role in preventable disease. If an organization is able to reduce some (or any) of these health risks we can undoubtedly have an impact on the excess of medical claims costs.
How do you get people engaged?
It is not easy. You have to address issues and concerns around confidentiality and trust. This is not something that can be overlooked whenever you are putting a wellness program in place, because without these two things no one will engage. Quality third party health coaching programs for things such as tobacco, weight, nutrition, exercise, and stress management have proven to be effective when they are properly fitted with the organization. Having an online option, as well as self-study modules are important for those that value accessibility and/or like to self-direct themselves, or maybe simply have an aversion to asking for help from a physical presence. Onsite wellness events when delivered well can be effective, if the presenter is engaging. Lastly, wellness challenges (or “co-opetitions”) are great if the organization already has an existing competitive environment.
Best Practices When Looking at ROI
What are the most important things to do when you are looking at return on investment regarding workplace wellness? Make sure you are looking at your baseline data. Measure before you roll out any workplace wellness program if possible. We know improving health risks improve costs, but figure out the quantifiable measure important to the organization. Is it productivity and absenteeism? Is it only the excess costs on medical claims? Figure out what “success” means to the organization, then obtain as much baseline data in terms of your own individual organization (or get outside/external benchmarks if needed). Build the trust and credibility within the organization needed to measure, because that is how you are going to get quality data. If no one opts in, no data. Make sure you focus on engagement, because without engagement you are not going to be able to get change (which means no positive outcomes for the employee and organization). Finally, really focus your effort on impacting lifestyle risk factors. That means focusing on things you can influence like: making healthy choices, exercising, and (of course) smoking cessation.
[credit: content inspired by fellow Alliant alum Dr. Michele Dodds.]