Comprehensive wellness programs not only improve employees’ health — they also can slow the rate of an employer’s health care cost increases. This results in a positive return on an employer’s investment in the wellness initiative. According to a study published in the Journal of Occupational and Environmental Medicine, employers can save $1.65 in health care costs for every dollar spent on a comprehensive employee wellness program.
The study followed participants in a wellness program sponsored by health insurance provider Highmark for its own employees. The wellness initiative was launched in 2002 and offered the following free of charge to employees (some program components were not included initially but were added in later years): Health risk assessments; online, onsite and/or individual programs on nutrition, weight and stress management, and tobacco cessation; screenings for cholesterol, blood sugar and blood pressure levels; campaigns to increase fitness awareness; disease management initiatives; and (at some locations) onsite fitness centers. Wellness program expenses averaged $139 per employee per year.
In order to assess the impact of the wellness program, participants were matched to nonparticipants based on gender, age, 2001 medical expenses, claims-based evidence of heart disease and diabetes, and certain predictive morbidity scores. For both participants and nonparticipants, individuals with $100,000 or more in annual health care costs were excluded.
Health care expenditures grew more slowly 2001 through 2005 for wellness program participants than for nonparticipants. Specifically, estimates of health care expenses per person per year were $176 lower for participants, and inpatient expenses were $182 lower. Over the four-year period, during which the wellness program cost Highmark just over $808,000, more than an estimated $1.3 million in health care cost savings were gained. This translates to a return on investment of $1.65 for every dollar the employer spent on the wellness initiatives.
The study also examined whether the wellness program participants made greater use of preventive services available through the health plan. In comparing data from the year before the wellness program launched and the next year, preventive visit screening rates increased from 56% to 60% for employees who completed a health risk assessment (HRA), from 57% to 60% for employees who completed an HRA and also participated in an online, group or individual wellness program component, and from 62% to 64% for employees who took an HRA and also used a fitness center. For nonparticipants, use of health plan preventive services remained unchanged at 55% during the comparison years. As a further measure of the impact of the wellness program on use of health plan preventive services, the study found that preventive care visits accounted for 16.5% of total health plan expenditures for wellness program participants, compared with 13.5% for nonparticipants.
Because the analysis only considered health care cost savings, the authors note that, “This savings estimate is most likely an underestimate of benefit as it does not include savings realized from improved productivity or reduced absenteeism or presenteeism.” They go on to cite other studies that found wellness program participants were absent a third- to a half-day less in the year following participation in a wellness program, and that wellness program participants have higher morale, productivity, job satisfaction and overall health and fitness levels than nonparticipants.
Though the Highmark initiative might be more comprehensive than many employers are willing or able to do, the study does show that wellness programs return the investment employers make in them, in financially measurable ways and in intangibles like a happier, more committed and productive workforce.