Many companys, as part of their efforts to contain rising health care costs, are starting worksite programs variously described as wellness, lifestyle programs, health and productivity management, population health management and, simply, health promotion programs.
The purpose of this article is to consider whether such programs improve health. When so, do they in turn reduce utilization of health care services and reduce health care expenditures?
The popular media have done much to promote the theory of company health promotion. Last year, In Business – Madison1 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 Business, 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 colleague review of scientific methods, support the ROIs announced here?
Health and Productivity Management
Illness and injury associated with an unhealthy lifestyle or modifiable risk factors is stated to account for at least 25% of staff member healthcare expenditures.
The most significant of these risk factors are stress, tobacco use, overweight or obesity, lack of exercise, excessive alcohol use, and poor nutritional habits.
Over the past two decades, a variety of groups at the local, state, and national levels have promoted the theory that health risk reduction and care management programs can improve employee health, and that worksite health education, health risk management, and benefit counseling should complement standard health insurance benefits.
The intensity of health promotion programs range from bulletin board, flyer or newsletter information to onsite fitness facilities, health risk reduction classes, and personal lifestyle change coaching.
Health promotion programs today often include a health risk (assessment|appraisal} to evaluate each staff member’s modifiable risk factors of disease. Program coordinators then target interventions to those that are at increased risk through personal communications and individual follow-up.
Comprehensive health promotion programs may include classes on health risk reduction and job safety, fitness and exercise activities, fitness center memberships, and reductions in co-payments or premiums for employees who adhere to advised health testing guidelines.
Along with this, some businesss are restructuring health benefits and encouraging employees’ cost-sensitivity when accessing health care.5 These changes are intended to reduce employees’ need for and utilization of health care, yielding lowered group health care costs.
Demonstrated reductions in healthcare expenditures should then provide corporations with a powerful bargaining chip in negotiating lower medical insurance premiums during future terms.
Evidence basis – A range of ROI estimates
The empirical research has produced results as varied as the well-liked media on ROI. However, evidence continues to grow that well-designed and well-resourced wellness and disease prevention programs provide multi-faceted payback on investment.
Colleague-reviewed evaluations and meta analyses show that ROI is achieved through improved staff member health, decreased benefit expense, and enhanced productivity.
• Goetzel and coworkers, in their meta-analysis of two dozen articles summarizing economic analysiss of health and productivity management programs, found an average return of $3.14 per $1 invested in traditional health promotion programs. the ROI estimates for the individual programs ranged from $1.49 to $13.7,
• Aldana reviewed 72 articles and concluded that health promotion programs achieve an average ROI of $3.48 when considering health care 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 found improvements in the risk profiles of participants, with the high-risk group improving more than the “usual care” group1 thus of more intensive programming.
• Chapman’s 2004 meta-evaluation of 42 studies, ranking overall validity of the studies, reports cost-benefit ratios from $2.05-$4.64.
In addition to immediately quantifiable cost reductions, scientists have reported 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 positive effects on employee perceptions of the corporation and employee morale, even among nonparticipants. These outcomes go beyond savings in direct health care costs to provide non-health related ROI.
Tailoring program to maximize ROI Health promotion programs aim to reduce the health risks of employees at high risk while maintaining the health status of those at low risk.
A variety of disease management (DM) interventions are available to fit the specific risk profiles of various worksites. Insurers and corporations now seek to calibrate their interventions in order to achieve optimal risk reduction and costeffectiveness.
In 2001, University of Michigan scientists reported on stable trends in healthcare costs for over 2 million current and former workers 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 costs when groups of workers moved from low risk to high risk were much greater than the decreases in costs when groups moved from high risk to low risk. Their conclusion – Programs designed to keep healthy individuals healthy will likely provide the greatest return on investment.
On the other hand, Pelletier’s meta-analysis and other program examinations18 suggest that individualized risks reduction for high-risk staff members within the context of comprehensive programming is the crucial element in achieving positive clinical and cost outcomes in worksite interventions.
Dose-Response?
Several factors may affect the impact of various programs and the ultimate ROI, including cultural and environmental factors, workforce demographics, level of participation and longevity of the program.
Most cost-benefit studies have been conducted in big corporations with more than fifty employees. But researchers have shown that similar results can be acquired by small corporations with as few as five employees actively involved in a well-managed program.
Various studies also suggest that even relatively modest levels of participation can achieve substantial program impact. Contrary to reports by the well-liked media that such programs require more than 70 percent participation, published reports of at least one case showed positive ROI with 51 percent participation.
Length of intervention appears to be a more salient variable – an impact on healthcare costs ordinarily requires three-to five years of programming.
Future developments
Despite the abundance of positive program investigations, several caveats remain. Negative results are less likely to be announced or published, accordingly biasing the ROI upward.
Uncertainty persists regarding the specific impact of the various program components. But as these programs take hold, further research and analysis will enable fine-tuning of program investments.
Meanwhile, the preponderance of data and the strength of the published research stand for a positive ROI for health promotion programs.
Truly, the company case for such programs is now well enough defined that some insurance brokers offer discounted rates to businesses that institute or subscribe to health promotion programs.
Future questions will focus on how to best to combine comprehensive and focused interventions, the intensity of elements, and how to calibrate the dose-response model to achieve a target ROI.
Here, employers, employees, and scientists will need to collaborate to define mutual goals respecting both clinical and cost outcomes.
Sources –
1. In Business – Madison. Madison, WI – September 2004. p. 39.
2. Anderson DR, Whitmer RW, Goetzel RZ, Ozminkowski RJ, Wasserman J, Serxner S. Health Enhancement Research Organization Committee. American Journal of Health Promotion 2000; 15(1) – 45-52.
3. Manning J. Health Promotion movement gains ground among businesses, health insurers. Milwaukee Journal Sentinel. August 19, 2004.
4. Chapman LS. Specialist opinions on “best practices” in employee health promotion (WHP). the Art of Health Promotion Newsletter, July/August 2004 – 1-6.
5. Fronstin, P, and Werntz, R. EBRI Issue Brief No. 267, March 2004. Washington, DC – Worker Benefits Research Institute (EBRI).
6. Powell C. Experts urge businesses to promote worker health promotion strategies. Akron Beacon Journal. October 25, 2004.
7. Goetzel RZ, Juday TR, Ozminkowski RJ. AWHP’s Worksite Health, Summer, 1999.
8. Goetzel, RZ. Absolute Advantage. Washington DC – Health Promotion Councils of America. Vol 1(8); 2002.
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16. Pelletier KR. American Journal of Wellness. 2001; 16(2) – 107-16.
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18. Leatherman S, Berwick D, Iles D, Lewin LS, Davidoff F, Nolan T, Bisognano M. Health Affairs 2003; 22(2) – 17-30.
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20. Serxner S, Anderson DR, Gold D. American Journal of Wellness. 18(4) – 1-6, iii, 2004 Mar-Apr.
21. Serxner SA, Gold DB, Grossmeier JJ, Anderson DR.
Corporate Wellness Companies