The ROI of Wellness

There has been a lot of talk about the ROI of wellness programs lately. Some of the most discussed studies being the one published in 2010 by Harvard economist Katherine Baicker, the 2013 RAND corporation study of employee wellness and the 2014 PepsiCo disease management and wellness study. In the simplest terms: 

• The Harvard study showed ”medical costs fall by about $3.27 for every dollar spent on wellness programs.” 
• The RAND study concluded that "Participation in a wellness program over five years is associated with lower health care costs and decreasing health care use. The average annual difference is an estimated $157, but the change is not statistically significant." 
• The PepsiCo study demonstrated: "When we looked at each component [disease management and lifestyle management] individually, we found that the disease management component was associated with lower costs and that the lifestyle management component was not. We estimate disease management to reduce health care costs by $136 per member per month, driven by a 29 percent reduction in hospital admissions." 

Here's my take. First, wellness programs are the right thing to do. And, no one disagrees that done well, they send a strong message that you care about your employees. There is also a lot of agreement that they have a positive impact on engagement and help you recruit and retain people that want to work in a healthy environment. Wellness programs may positively impact attendance and productivity too, but the evidence there is not as strong.

Second, you have to know your workforce. Carol Harnett reported that another thought leader, Dee Edington concluded, "on average, the best-performing wellness program in terms of return-on-investment was a smoking cessation initiative. The caveat, however, was that it takes -- on average -- about eight years before a positive ROI is captured. For all the other wellness-related schemes, approximately 16 years must go by before you realize a return on the money spent." When I look at those numbers, I'm not so quick to shrug them off. Our average tenure is 8.5 years, so we have a lot of staff members that have been at ASHA more than 16 years. We also provide health insurance coverage to our retirees, so we have a very long term investment in the health of our staff. We focus on making the healthy choice the easy choice and implementing wellness initiatives that are tailored to our staff and our needs. Matter-of-fact, that's what James Sumortin from Twitter and I just talked about during our presentation at the Health and Benefits Leadership Conference. 

Third, there is general agreement that 20% of the members of a health plan are responsible for 80% of the claims in any given year. There are valuable programs like disease management (if you believe the PepsiCo study) and Centers of Excellence that target this 20% and direct them toward high quality care (which is also cost effective.) But, 59% of the next years top 20% are in this years 80%. We have to develop interventions that stop the migration of people from the healthy 80% into the unhealthy 20%. Aaron Davis and I discussed this over lunch last Friday and this is what his company Switchbridge is focused on.

My take on all this is filtered through a population health mindset. I just read What Great Corporate Wellness Programs Do. In the introduction, the authors suggest that workplaces have a unique power to reframe the mindset around health. That got me to thinking about the effect smoke-free workplaces have on smoking behavior. Studies prove that smoke-free workplaces encourage smokers to quit or reduce consumption.

"Totally smoke-free workplaces are associated with reductions in prevalence of smoking of 3.8% ... and 3.1 ... fewer cigarettes smoked per day per continuing smoker... If all workplaces became smoke-free, consumption per capita in the entire population would drop by 4.5% in the United States and 7.6% in the United Kingdom..."

I'm a believer that it takes a village. Employers have the opportunity to create little Blue Zones within their workplaces and influence what goes on in the communities where they're located. If we do, maybe we'll see obesity trends start to fall the way that smoking has declined.

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Recommended Reading:

• My 10 Takeaways from the CoHealth Interview with RAND’s Soeren Mattke by Bob Merberg -- Search Bob's blog for other thought provoking posts on the ROI of wellness. 
• Cracking Health Costs: How to Cut Your Company's Health Costs and Provide Employees Better Care by Tom Emerick and Al Lewis
• Staying@Work™ Survey Report 2013/2014 from Towers Watson
• There's More to Wellness Program ROI than Medical-Cost Savings by Ronald Ozminkowski in HRE Online

Improve Your Health Care Experience with Health Advocate

Three years ago, I went to the SHRM conference looking for a company that could help our staff get the most out of our health insurance. We were paying for our staff to have great coverage, but I was hearing about situations where our staff weren't getting the care they needed or they were hassling with resolving claims issues they didn't fully understand. The HR team was also spending a considerable amount of time helping people resolve issues related to our health and dental insurance and receiving questions about Medicare that were outside our area of expertise. Health Advocate had a booth at the conference. I chatted with them, picked up some literature, and followed-up when I got back to the office. We decided they would fill a need and added the benefit November 1, 2008. 

Health Advocate can help people address a whole host of healthcare and insurance-related issues that include. 

• Finding the best providers or hospitals
• Untangling medical bills
• Locating eldercare and support services
• Securing second opinions
• Navigating insurance coverage
• Explaining conditions and treatment options

We cover all our staff (regardless of whether or not they have our health insurance coverage) and all of our retirees. Coverage also extends to our spouses, dependent children, parents and parents-in-laws. We seem to be averaging around 40 interactions per month. About half of the calls are people looking for assistance with a claim. Other popular reasons to call relate to locating care, seeking health information, and dealing with Medicare. 

I've used the service myself a number of times. Health Advocate once wrote a successful appeal letter for me when I had lab charges denied that were provided through a participating doctor, a couple of years ago they helped me find a physical therapist near the office with available appointments, and I just called them again to help me find a doctor with a particular speciality and to get information about treatment options for a specific condition. 

The service is reasonably priced at $2.10 per covered employee/retiree per month. The current utilization report suggests that they saved us $20,838 from 12/1/2010 through 9/30/2011. (That's mostly an estimate of productivity savings.) During that period, our coverage cost about $6,400. Not a bad ROI. 

If you're covered under the ASHA plan, you can call Health Advocate at 866-695-8622. 

Heart Health Initiative Results and ROI

Early this year I heard David Foreman speak about heart health. Dave is a retired pharmacist, naturopathic doctor, practitioner of natural living and holistic approaches to better health, and a fellow Gamecock. His talk prompted me to dig through reports on our prescription drug utilization. 13% of the adults covered by our health plan take statins and, after listening to Dave, I became concerned they could have more of a negative impact on my colleagues' health than a positive one. Our annual prescription drug costs for statins are over $30,000 a year. So, it seemed reasonable to invest in some sort of cholesterol program. I contacted Dave and together we designed a 12 week heart health initiative for our staff.

We kicked off the initiative in April. Dave spoke to interested staff and we offered cholesterol and CRP screenings. 42 staff participated in the baseline screenings. Dave talked with us about his four pillars of health -- diet, exercise, spirituality and supplementation -- as they relate to heart health. Dave also educated us a bit about the risks associated with statins. After staff received their lab test results, we gave them the opportunity participate in a 12 week initiative designed to lower their cholesterol. Participants pledged to:

• Eat as described in Food Rules -- Eat food. Not to much. Mostly plants.
• Move a little -- the equivalent of a 30 minute brisk walk or more per day
• Take 150 mg of Sytrinol twice daily 
• Take 2,000 mg of Coromega Omega 3s daily

Dave arranged to have Coromega and a Sytrinol manufacturer donate the supplements for our program. Participants were each provided with a welcome kit and encouraged to participate in a discussion of Food Rules. We also took a field trip to a local farmers' market to apply what we learned in the book. Dave joined us for two video chats during the course of the initiative to answer participant's questions and share additional information. 

All participants agreed to complete an end point screening in July so they could assess whether the changes they made were working. 16 staff members chose to participate in the program. 

• 37% (6) lowered the total cholesterol
• 50% (8) lowered their triglycerides
• 44% (7) increased their HDL (good cholesterol)
• 31% (5) lowered their LDL (bad cholesterol)
• 19% (3) lowered their CRP

It's rare that I can calculate a meaningful ROI for a component of our wellness program, but this initiative provided the opportunity. (The cost of our screenings was covered under our annual contract with LifeWork Strategies. However, I'll break it out on a fee-for-service basis here.) 

At least one individual was able to eliminate the use of a statin saving herself $280 a year and our plan over $3,600 per year. So, even if we assume that there was only that one return on our investment, we will have recouped the full cost of the program in 14 months. 

The program didn't work for everyone, but seven individuals plan to continue with it and I'm pleased with the ROI. One of the participants, Carol Williams, shares her story here.