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Employment Resources

WELLNESS PROGRAMS PAY OFF IN THE LONG RUN

By May 1, 2009No Comments

Various studies of the return on investment (ROI) generated by wellness and health promotion programs establish that these programs can indeed provide payback on the dollars invested in them. Regardless of the ultimate payback, however, an employer wishing to establish such programs still will need to find the financial resources to set them up — an investment that might be small or large, depending on the extent of the program. Given the added costs generated by employees with unhealthy lifestyles or modifiable health risks, it’s worth exploring all possible ways to fund a wellness initiative.

Employees’ unhealthy behaviors add greatly to a company’s health care costs. Using tobacco, living a sedentary lifestyle, being overweight or obese, eating a diet lacking in nutrition, or failing to properly care for a controllable chronic health condition all can take a toll on a company’s bottom line, as well as on an individual’s health. According to data cited in a report from the Wisconsin Public Health & Health Policy Institute, illness and injury associated with an unhealthy lifestyle or modifiable risk factor can account for at least 25% of employee health care expenditures.

This same report cites a handful of studies that support the proposition that wellness, health promotion and disease prevention programs provide “multifaceted payback on investment,” through improved worker health, reduced benefit expense and enhanced productivity. Studies cited reported ROI ranging from approximately $1.50 to close to $6.00 per dollar invested, varying by type of program and by whether health care costs alone, or also factors such as reduced absenteeism and improved productivity, were considered. Another study published in the Journal of Occupational and Environmental Medicine found that employers could save $1.65 in health care costs for every dollar spent on a comprehensive employee wellness program.

If you accept that wellness programs will save you money over time, you still need to find the money to get such a program up and running. Try not to let funding concerns convince you to skimp on the quality of the program, as it takes a well-designed, targeted and comprehensive program to achieve the kind of ROI found in the studies. That said, consider these funding possibilities:

  • Implement the wellness program at the same time that you make other health plan changes. If your benefit program does not include any high deductible health plan options (with lower premiums), now would be a good time to think about adding a consumer-driven plan to the mix.
  • Make a health risk assessment part of the wellness program, charge a higher health plan premium rate for employees who decline to take the assessment, and apply these funds to wellness program costs.
  • Ask your health plan vendors what wellness programs they offer and whether they are integrated with your current plan, or if they could be added to your plan at a discount.
  • Survey employees to ascertain what types of programs they would use and, furthermore, would be willing to contribute to.
  • Look at your benefits program overall for possible sources of funding. For example, are there little-used benefits that could be converted to a voluntary program? Or any high cost (for both employer and employees) health plan options that draw a low enrollment and, potentially, could be eliminated?

Employees with unhealthy lifestyles or modifiable health risks are likely to cost more to employ. It’s worth taking the time and exploring all options to fund programs that target these employees’ needs.