Comprehensive program brings modest ROI
A recent study of workers at health insurer Highmark, Inc., shows that a comprehensive employee wellness program results in a positive ROI.
“The Impact of the Highmark Employee Wellness Programs on Four-Year Healthcare Costs” was published in the February Journal of Occupational and Environmental Medicine, which is the official journal of the American College of Occupational and Environmental Medicine. The study specifically researched whether Highmark’s employee wellness program saved the company money.
The researchers found healthcare expenses per person per year were $160 lower for wellness program participants than nonparticipants. Inpatient expenses were also $183 lower per year for participants. The estimated net savings from the program was $1.3 million, producing an ROI of 1.64:1, according to Highmark.
Ron Z. Goetzel, PhD, research professor at the Emory University Rollins School of Public Health’s Institute for Health and Productivity Studies in Atlanta and vice president of health and productivity research at Thomson Healthcare in Washington, DC, was a coauthor of the study. He says the study, and others that have been done over the past 20 years, shows that evidence-based health promotion programs that reach large numbers of employees at worksites can translate to healthcare cost savings and productivity improvements.
Brian Day, director of advanced analytics at Pittsburgh-based Highmark, says the study was performed to review whether the company’s employee wellness program is worth the money invested. Day says the study reaffirms the Highmark leadership’s advocacy for wellness programs.
“My opinion is because it shows there is an ROI, I believe the company will continue to invest in wellness programs and look at how the ones we have now can be improved and added upon,” says Day. “If you’re above breaking even and still providing benefits for members, then you are doing a good thing.”
But savings can’t be expected right away. “Wellness is one area that you are not going to see immediate results. If you put it into place and expect changes in six months or a year, you’re going to be disappointed. You need to be committed to it and you will see results. Wellness works,” Day says.
Highmark, which employs about 12,000 workers, began offering a comprehensive employee health promotion program in 2002. Highmark’s program offers health risk assessments (HRA), online programs in nutrition, weight, and stress management, tobacco-cessation programs, on-site nutrition and stress classes, individual nutrition and tobacco-cessation coaching, biometric screenings, and campaigns to increase fitness participation and awareness of disease prevention strategies. Highmark employees also have access to employee fitness centers in Pittsburgh and Camp Hill, PA, site of another Highmark office.
Additionally, there is a 10,000 Steps Program, in which employees receive pedometers and a book to help them record the number of steps they take daily. Nearly 10,000 of Highmark’s employees participated in the wellness program between 2002 and 2005.
The cornerstones of the wellness program are the HRA and biometric screenings, which check employee cholesterol, glucose, and blood pressure. Using the data from those two sources, the program personalizes the wellness message for each employee.
Because the study focused solely on ROI, Day says researchers did not explore the health effect of the biometric screenings. But he believes the screenings did improve results. “We were seeing an incremental improvement over time for the participants versus the nonparticipants in preventive screening. It would logically follow that the biometric screening would also improve, but that is something that will be left to an analysis to fully determine.”
In the study, researchers compared wellness program participants to nonparticipants. However, because of the wellness program’s popularity, study authors found there weren’t enough nonparticipants who could be matched to participants. Instead, they created a supplemental pool of nonparticipants with Highmark coverage who did not use wellness programs offered to employer clients (or benefit from the Highmark leadership’s focus on wellness) and selected those from industries similar to Highmark’s, such as financial, real estate, and insurance. This allowed the researchers to separate study participants into two groups of 1,892 people (participants and matched nonparticipants).
Day says Highmark’s employees are not different from similar industries’ employees in terms of health status. Goetzel says many in healthcare work long hours, suffer from high stress, and eat a poor diet, but there is an opportunity to improve employee health. “Certainly, working in healthcare companies should prompt employees to have a greater focus on health. It’s much more central to what they are all about,” says Goetzel.
The study is an improvement over other wellness studies because researchers controlled for self-selection bias by matching up Highmark employee program par-ticipants as closely as possible to nonparticipants from other employers in similar industries, Goetzel says. “What we have done here is to match participants in the program to very, very similar people who did not participate in the program, so essentially we were able to follow two groups of people over time ... and see what their healthcare and cost experiences were like,” he says. “It was a more accurate depiction of what the true differences between program participants and nonparticipants might be and how these differences translate to savings.”
To calculate the program savings, researchers collected program expenses by combining fixed and variable costs, such as costs of the HRAs, fitness centers, and programs. They compared these totals with the costs of healthcare provided to employees drawn from medical claims data.
In addition to comparing participants and nonparticipants, researchers divided the former into categories based on the types of wellness programs they used:
HRA only—Employees who completed an HRA but did not participate in other wellness programs
HRA and other—Employees who completed an HRA and participated in online, group, or individual health improvement sessions
HRA and fitness center—Employees who completed an HRA and used the fitness center
Those in the program-specific groups “experienced slower healthcare cost increases than for nonparticipants,” but the differences were only “statistically significant for those who used an HRA and the fitness center,” the study stated. The differences between groups may not have been significant because of sample size, according to the study.
“Examining the three subsets of program participants, we found a slower rate of growth in healthcare costs for participants vs. nonparticipants, regardless of whether employees only completed an HRA; participated in coaching, online, group or individual programs; or visited a fitness center along with engaging in other wellness programs,” wrote the authors.
Researchers found the largest growth in participation was in fitness center use, which jumped from 21.5% in 2003 (when the Pittsburgh center opened) to 46.5% in 2005 (when both fitness centers were open). Online program participation also increased from 11% in 2002 to 27% in 2005, and individual nutrition coaching increased from 1% in 2002 to almost 6% in 2005.
Day says communication with employees through an Intranet site, coupled with executive leadership and the greater wellness movement within the United States, were the reasons why program participation increased. The outreach appears to have worked, given that participation didn’t involve only healthy individuals, but also people with chronic conditions. “We had some very high-risk and sick individuals that participated in the wellness programs, which tells us that people recognized the benefits of using wellness programs. It’s not just those who want to stay in shape,” says Day.
Two areas the study did not take into account were employee productivity and absenteeism. Many researchers have used those figures as a way to test the benefit of wellness programs, but Day says Highmark did not have that information. He believes the ROI is probably underestimated because the researchers did not take those costs into account. Day says Highmark did complete an additional study in 2007, which reviewed self-reported sick days against those who participated in the employee wellness program. Highmark found that participants in the wellness program were absent a half-day less than those not in the program. “That kind of gave us an idea that we were having some effect on productivity,” he says.
Day says Highmark wants to further explore the wellness study results to gauge the effectiveness of specific programs. Highmark will promote the findings as an example of how wellness programs work. “What we want to try to do is talk to the employers and sell it to them, so to speak, so they start to buy into wellness and put it into effect for their employees ... We will likely consider rolling out some of the things that we found effective in this study,” he says.
Seven aspects of a successful wellness program
Ron Z. Goetzel, PhD, who coauthored a review of employee wellness programs at Pittsburgh-based Highmark, Inc., cites the following seven items as necessary to achieving a successful program:
1. Health risk assessment (HRA). HRAs provide immediate feedback to program participants and highlight areas that need improvement, allow a company to reach out to people who need help, and provide an effective measurement tool.
2. Triage methods. It’s important to have good methods for triaging people into risk-reduction programs.
3. Good incentives. ”Incentive structures that seem to be working more effectively are those where you reduce participants’ medical premiums if they engage in programs.”
4. Theory-based behavior change methods. “There is a whole body of literature in the social-psychology domain that shows how to change people’s behaviors more effectively than just telling people to change their behavior.”
5. Tailored communication. Adjust communication to fit participants’ preferred learning styles, such as one-on-one coaching, mail, telephone, or e-mail. “A program that doesn’t engage a large proportion of the population in some form or fashion is not going to be successful.”
6. Measurement and evolution by building metrics. This data allows you to analyze and fine-tune wellness programs.
7. Leadership support. “[Leaders] need to model healthy behaviors. They can’t say, ‘Everyone live a healthy lifestyle, I’m going to continue to live my unhealthy lifestyle.’ ”
Once the wellness program is established and employees take part, the next question is: How does a company define a successful wellness program? Goetzel says a 2%–5% improvement in most risk factors and a 2%–5% reduction in healthcare utilization is sufficient to deem a program a success.
“What that means is that you don’t need to get everyone to quit smoking and lose weight and start running. A relatively small change in the health-risk profile of employees will actually achieve dramatic improvements in healthcare utilization costs and productivity,” says Goetzel.