Wellness Programs Show Hard-dollar Savings

There is something inherently commonsensical about wellness programs.

If employers entice and incentivize employees to take better care of themselves, by losing weight, quitting smoking, exercising, etc., then the healthier life style will result in lower medical costs, which will be reflected in lower health insurance premiums, and other costs associated with employer-based health plans.

It's a remarkably simple theory. Until recently, however, it's been just that: theory. It's been difficult to consistently demonstrate savings generated by wellness programs. As the wellness movement matures, however, more studies prove they are a worthy return on investment.

Highmark Inc., the Pittsburgh-based health insurers, have published the findings of a four-year study which found that healthcare costs rose at a 15% slower rate among wellness participants who were offered a consistent and comprehensive wellness program over several years, when compared with employees in a control group who did not participate in wellness programs.

The study of select Highmark employer group wellness programs showed that the savings per participant was $332 a year, when compared with the control group of nonparticipants. Actually, the savings could be considerably higher, says Jennifer Grana, a director at Highmark, because the study does not factor in the cost of lost productivity and absenteeism due to health issues.

The study was published in the March/April edition of the American Journal of Health Promotion.

Grana says the measuring ROI on wellness programs has been difficult because it often takes years to see the results. "When you start to talk about a return on investment you will want to evaluate and measure your wellness program knowing it takes time to change behavior," she says. "You have to allow for the fact that it usually takes three to five years of good participation to even begin to move the needle and demonstrate a return on investment."

"It is all about changing behavior, and that takes time," Grana says. "It could take several attempts for people to quit smoking or lose weight. It is not something you will necessarily see overnight. But if you keep at it you will be able to see that you are moving the needle, and that can equate to some dollars saved."

Highmark evaluated the impact of wellness programs on healthcare costs and utilization over time by matching approximately 10,000 wellness program participants at 47 Highmark employer groups with a risk-matched comparison group. The employers offered Web-based wellness programs from Highmark to their employees consistently for at least three or more years.

The study found that wellness program participants used services such as preventive physicals, mammograms and cancer screenings more than their comparison group counterparts, possibly as a result of self-care knowledge obtained from their worksite wellness programs. While these preventive care measures often cost employers more in the short term, they can help save on longer-term healthcare costs.

Grana says that Highmark data show that successful wellness programs almost always start with a health risk assessment that could be combined with biometric screenings. "It's important to follow up with the 'what's next?' with the data," she says. "Whether it's a digital coaching program that a worker can access that deals with topics like binge eating or weight management or insomnia, or it could be telephonic coaching, or employer-sponsored worksite programs. (Making) them aware of the resources that are readily available for them is crucial."

While worksite health promotion and wellness programs have been around for 30 years, Grana says that in the past five years employers have more readily embraced wellness as part of their organizational mission. "Some have tied incentives for participation in wellness programs to their benefit design. Those types of movements have allowed great progress in terms of getting more participation so there is more data, so we can implement more meaningful programs or interventions that address the data," she says.Grana says she is finding C-suites are becoming more receptive toward wellness programs as they demonstrate their value, and as healthcare costs continue to pile up. "It's not just in terms of healthcare dollars. It's also in terms of productivity," she says. "We know people who manage their stress or depression who are healthier are more productive employees. They miss less work and when they are at work they are functioning at a higher level."

Accepting the validity of the wellness movement, and building a wellness movement for your organization are not the same thing, however. "Wellness is not easy," Grana says. "You have to have a trusting culture, you have to motivate employees, and you have the have the administrative and communications support to make these things successful to get the biggest bang for the buck. When you balance it all out employers know it's the right thing to do."

Wellness programs may be the right thing to do for employees, and they may give the folks in HR a higher sense of purpose as they help colleagues enjoy the higher quality of life that comes with better health. But wellness programs will only prosper and proliferate if they're shown to be cost effective. Fortunately, the data is telling us that it's true.