Posts from — April 2009

Many employers, as part of their efforts to contain rising health care expenditures, are implementing workplace programs variously described as Worksite Health Promotion Programs, lifestyle programs, health and productiveness management, population health management and, simply, wellness programs.

The purpose of this article is to consider whether such programs better health. If so, do they in turn decrease utilization of medical care services and decrease medical care expenditures?

The popular media have done much to encourage the concept of employer wellness. Last year, In Business: Madison magazine printed a story accompanied by a table reporting an impressive range of returns on investment (ROI):

Return on Investment (Per dollar ROI for lifestyle programs)
• Coors $6.15
• Kennecott $5.78
• Equitable Life $5.52
• Citibank $4.56
• General Mills $3.90
• Travelers $3.40
• Motorola $3.15
• PepsiCo $3.00
• Unum Life $1.81
Source: 2004 T.E. Brennan Company, as reported

Would these ROIs stand up to rigorous empirical analysis of the data? What factors produce such disparate returns among these programs? And does the published literature, subject to peer review of scientific methods, support the ROIs reported here?

Health and Productivity Leadership

Illness and injury associated with an unhealthy lifestyle or potentially-modifiable risk factors is reported to account for at least 25% of employee healthcare expenditures. The most significant of these risk factors are stress, tobacco use, overweight or obesity, physical inactivity, excessive alcohol use, and poor nutritional habits. Over the past two decades, a variety of groups at the local, state, and national echelons have promoted the concept that health risk reduction and care management programs can better employee health, and that workplace health education, health risk management, and benefit counseling should complement standard health care insurance benefits.

The intensity of Workplace Wellness Programs range from bulletin board, pamphlet or newsletter information to onsite fitness facilities, health risk reduction classes, and personal lifestyle change coaching.3 Workplace Wellness Programs today often include a health risk assessment (HRA) to evaluate each employee’s potentially-modifiable risk factors of disease. Program coordinators then target interventions to those that are at increased risk through personal discussions and individual follow-up.

All-Inclusive Company Wellness Programs may include classes on health risk reduction and job safety, fitness and exercise activities, health club memberships, and reductions in co-payments or premiums for employees who adhere to recommended healthcare assessment ground rules.

Along with this, some employers are restructuring health benefits and encouraging employees’ cost-sensitivity when accessing healthcare.5 These changes are intended to lower employees’ need for and utilization of healthcare, yielding reduced group healthcare costs. Demonstrated reductions in healthcare expenditures ought to then support employers with a powerful bargaining chip in negotiating decreased health care insurance premiums during future terms.

Evidence basis: A range of ROI estimates

The empirical research has produced results as varied as the popular media on return on investment. Nonetheless, evidence continues to grow that well-designed and well-resourced Worksite Health Promotion Program and disease prevention programs offer multi-faceted payback on cost. Peer-reviewed evaluations and meta analyses show that return on investment is achieved through improved worker health, reduced benefit expense, and enhanced productiveness.

• Goetzel and colleagues, in their meta-analysis of two dozen articles summarizing economic evaluations of health and productivity management programs, reported an average return of $3.14 per $1 invested in traditional Corporate Wellness Programs. The ROI estimates for the individual programs ranged from $1.49 to $13.7,8
• Aldana reviewed 72 articles and concluded that Employee Wellness Programs achieve an average return on investment of $3.48 when thinking of healthcare costs alone, $5.82 per $1 when examining absenteeism, and $4.30 when both outcomes are considered.
• Ozminkowski and collagues conducted a 38 month case study of 23,000 participants in Citibank, N.A.’s health management program and stated that within a 2 year period, Citibank realized a ROI between $4.56 and $4.73.10  Follow-up studies reported improvements in the risk profiles of participants, with the elevated-risk group improving more than the “usual care” group11 as a result of more intensive programming.
• Chapman’s 2004 meta-evaluation of 42 different studies, ranking overriding validity of the different studies, reports cost-benefit ratios from $2.05-$4.64.

In addition to immediately quantifiable expense reductions, researchers have stated a variety of spin-off benefits: greater productivity, intellectual capacity, and reductions in disability12 and absenteeism.9,13,14,15 Such programs may also have beneficial effects on employee perceptions of the company14 and worker morale, even among nonparticipants. 13 These outcomes go beyond savings in direct medical costs to support non-health related ROI.

Tailoring program to maximize return on investment Workplace Wellness Programs aim to cut the health risks of workers at high risk while maintaining the health status of those at low risk. A variety of disease management interventions are available to fit the specific risk profiles of various worksites. Insurers and businesses now seek to calibrate their interventions in order to achieve optimal risk reduction and costeffectiveness.

In 2001, University of Michigan researchers stated on stable trends in medical expenditures for over 2 million current and former staff members in an 18 year data set. The mean cost increase per risk factor gained ($350) was found to be more than double the mean cost decrease per eliminated risk factor ($150). In other words, increases in expenditures when groups of staff members moved from low risk to high risk were much greater than the decreases in expenditures when groups moved from high risk to low risk. Their conclusion: Programs designed to keep healthy people healthy will likely offer the greatest return on investment.

On the other hand, Pelletier’s meta-analysis16 and other program evaluations18 suggest that individualized risks reduction for high-risk staff members within the context of all-inclusive programming is the essential element in achieving beneficial clinical and expense outcomes in workplace interventions.

Dose-Response?

Several factors might affect the impact of various programs and the ultimate return on investment, including cultural and environmental factors, workforce demographics, level of participation and longevity of the program.

Most cost-benefit studies have been conducted in big organizations with more than fifty workers. But researchers have shown that similar results can be obtained by small organizations with as few as five workers actively involved in a well-managed program.

Various research studies also suggest that even relatively modest levels of participation can achieve substantial program impact. Contrary to reports by the popular media that such programs require more than 70 percent participation, published reports of at least one case showed beneficial ROI with 51 percent participation.

Length of intervention appears to be a more salient variable: an impact on healthcare expenditures generally requires three-to five years of programming.

Future developments

Despite the abundance of beneficial program evaluations, several caveats remain. Negative results are less likely to be reported or published, thus biasing the return on investment upward.

Uncertainty persists regarding the specific effect of the various program components. But as these programs take hold, further research and evaluation will enable fine-tuning of program investments.

Meanwhile, the preponderance of data and the strength of the published research stand in favor of a positive return on investment for Employee Health Promotion Programs. Indeed, the business case for such programs is now well enough defined that some insurance brokers offer discounted rates to companies that institute or subscribe to wellness programs.

Future questions will focus on how best to combine all-inclusive and focused interventions, the intensity of components, and how to calibrate the dose-response model to achieve a target ROI. Here, employers, staff members, and researchers will need to collaborate to define mutual goals in terms of both clinical and cost outcomes.

As organizations today continue to compete in the worldwide economy, cost containment strategies will be increasingly important. Controlling the rising cost of employee ill health is becoming a priority for corporate leaders. The emerging corporate culture in America is one which has an employee population centered in health, safety and wellness.

Developing a corporate plan for Worksite Wellness Programs and disability management makes great business sense. The following eight-step process ensures a strategic, integrated, needs-driven and outcome-oriented approach.

The following process works best in employers with strong leadership and a long-term responsibility to employee health.

1. Identify Your Workplace Health Promotion Program Champion

This person ought to be a leader in your organization and a strong advocate of health. Usually this is an individual who actively pursues his or her own personal quest for ideal health.

The program champion must have the resources and authority to drive the program forward. The program champion’s key role is to ensure the strategic plan for health is aligned with the business’s objectives, strategic focus and business values. By way of example if the organization promotes that “our strength is our people” the wellness program must corroborate how initiatives will nurture and protect that significant resource.

2. Form Your Worksite Health Promotion Program Strategy Team

The Company Wellness Program Strategy Team ought to include decision makers and stakeholders from parts of the corporation that can impact health and the company’s bottom line. These areas may include; finance, human resources(HR), training and development, health services, compensation and benefits, employee assistance services (EAP), marketing, facilities, health and safety, rehabilitation, cafeteria or diet services and the union. A group of six to eight representatives is recommended.

The role of the Strategy Team is to develop and implement the strategic plan, look for opportunities to reward health, be sure the program is integrated into key areas of the organization, streamline efforts, maximize company resources and program evaluation.

3. Complete an Corporation Health Audit

The purpose of an Employer Health Audit is to evaluate your existing programs and services, physical environment and policies & procedures that support health. It is also significant to look at your business culture or “how things are done” around the business.

Members of the Strategy Team complete the Audit independently and then meet to discuss their assessment. During the assessment process, health concerns and opportunities are discussed in preparation for the development of the strategic plan.

4. Analyze Your Organization’s Cost Pressures

Cost pressures are identified by analyzing a number of areas including; benefit costs, Workplace Safety Insurance Board (WSIB) claims, prescription usage, type of paramedic claims, absenteeism data and EAP utilization. This process helps to target areas that can be positively impacted by a Worksite Health Promotion Program and to support a baseline for evaluating change.

5. Conduct a Health Risk Appraisal or Employee Needs & Interest Survey

The next step is to determine your employee’s health risks, interests and readiness to change. A confidential health risk appraisal can accomplish many goals and objectives. It provides a baseline from which to measure personal lifestyle changes, provides employees with relevant health information, motivates employees to take charge of their health and assists in program planning. Most health risk appraisals provide individual reports and a corporate report identifying high-risk areas in the business.

Many companies prefer to administer customized needs and interest survey to evaluate employee needs. The benefit of this approach is that the employer is able to gather information on the employees’ perceived wellness needs and program interests. This information can be incorporated into the strategic plan. Administering a survey also has the added benefit of fostering a sense of employee ownership to the program.

6. Establish Your Strategic Plan for Wellness

The strategic plan ought to incorporate information collected from the Corporation Health Audit, your organization’s expense pressures, and health risk appraisal data or employee survey results. The strategic plan ought to include your program mission, three or four objectives and several pushes under each goal. The strategic plan supports a framework to encourage, support and evaluate “best health practices.”

It is also valuable that the plan align itself with the vision, goals of the organization.

The sample strategic plan that follows was developed for blue jeans maker Levi Strauss & Co. (Canada) Inc. Levi Strauss & Co.’s mission statement and aspirations (how staff members interact with each other in a employer environment) guided the development of the plan.

Levi Strauss & Co.’s aspirations include the following statement: More than anything, we want satisfaction from accomplishments and friendships, balanced personal and professional lives, and to enjoy our endeavors. The wellness program plan included a number of components to see that it embraced this statement including the following:

1. A vision statement, which tied in with the company’s aspirations.
2. An incentive system to encourage and reward the accomplishment of healthy milestones.
3. A recognition system to applaud performance.
4. Friendly competitions between Levi Strauss & Co. locations to ensure a fun environment.
5. Opportunities to participate in small group educational programs to develop team support.
6. Initiation of support groups for employees completing wellness programs (i.e. smoking control support group).
7. Programs dealing with work and family balance.

Other information that was analyzed and used to cultivate the plan included:

1. Company demographics
2. Focus groups
3. Cultural audit
4. Top prescription drug report
5. EAP utilization
6. Employee benefit services report
7. Health and dental claims
8. Operational performance summaries
9. Health risk appraisals
7. Prepare a Organization Case to Support Your Plan

Your employer case for wellness supports the necessary details for approval at the management level. The employer case includes:

1. The Strategic Plan for Health
2. A proposed program budget
3. Marketing strategies
4. Program leadership options
5. An implementation plan
6. Evaluation methodology.

In presenting the strategic plan it is important to highlight how the plan aligns itself with the strategic direction of the organization.

The program budget should include educational resources, marketing expenditures, rewards and incentives, leadership expenditures and supplies.

Marketing strategies ought to address how the program will be promoted and rolled out to various groups within the organization i.e. decentralized locations, high risk workers, older workers.

Program leadership must address how volunteers will be used, internal resources  and whether consultants have been proposed. All play an equally important role in the implementation of your wellness program.

The program implementation plan ought to incorporate the following types of programs that help foster awareness of beneficial health practices, help  staff members in making lifestyle changes and pushes, which support long-term change.

Awareness programs foster an awareness of the effect of healthy lifestyle practices and excite employees to take the next step. Examples of awareness programs include posting educational posters, newsletter articles and lunch and learn courses.

Lifestyle change programs are more inclusive and longer in duration. They are designed to support  workers in changing behavior. Examples of lifestyle change programs are nutrition education programs, stress management programs, back care classes and smoking control programs.

A supportive corporate environment encompasses everything from corporate policies & procedures, the physical environment and creating a corporate culture that supports great health practices. Follow-up sessions and support groups for workers who have completed 6-10 week wellness programs also provide a supportive environment for long-term change.

Reviewing the effectiveness of a Corporate Wellness Program is ongoing. A formal assessment should be conducted each year and may include; re-administering steps three to five, program participation statistics and a year end survey to revisit “soft” concerns such as morale, program satisfaction and future program direction.

8. Solicit Input and Communicate Your Plan

Employee input is essential to the long-term effectiveness of your program. An Employee Advisory Committee should be formed to roll out the plan. Another key responsibility of this team is to solicit feedback from all echelons of the organization to ensure buy-in. Front line Manager’s Information Sessions and focus groups are also significant. This group needs to buy-in to the notion that they play a key role in supporting positive health practices. Regular gatherings are advised with front line managers to receive ongoing input, address issues and orient new managers.

Conclusions

The World Health Organization’s definition of health is “a state of complete physical, mental and social wellness and not merely the absence of disease and infirmity.” In order for us to establish healthy workplaces, wellness pushes must have a program champion, have employee ownership, be senior staff supported, results driven and strategically aligned with the overall organization objectives of the organization.

Wellness plan that embrace these qualities will have a beneficial effect on an organization’s bottom line. Canadian research points to many case studies where onsite programs have resulted in diminished absenteeism, cut claims and increased work rate.

Corporations who have embraced wellness as part of “how they do business” share one thing in common. They show a responsibility to their most significant resource – their people. They understand the increased pressures associated with downsized corporations, a rapidly changing workplace, an aging work force and the challenge of balancing work and family obligations. And they share a common belief that healthy employees are happier, absent less and more beneficial.

References:
Design of Corporate Health Promotion Programs by Michael P. O’Donnell. 1995. Published by the American Journal of Health Promotion.
Pro Fit-ability by Veronica Marsden. Group Healthcare Management. May 1997.
Meeting Expectations by Laura Mensch. Employee Health and Productivity. August 1999
7 Steps to Health Promotion by Daphne Woolf and Veronica Marsden. Group Healthcare Management. February 1996.
Published in The Journal of Health Promotion for Northern Ireland, Issue 9, March 2000