Health Handouts : Corporate Health Promotion Programs: Economic Considerations

Initially introduced by Halbert Dunn in the 1950’s, wellness became a popular buzzword during the late 1970’s and received considerable academic attention in the 1980’s.  Workplace Wellness Programs for staff members became more widespread during the following decade, and credible evidence for their economic viability began to be published.  There have now been over 100 published studies on this topic and a number of systematic reviews.

Health risks inflate expenditures.  Health Care Insurance expenditures escalate with both age and number of risks present.8,10   The number of risks is also strongly related to sick time absenteeism, Worker’s Compensation expenditures, short-term disability, and reduced productiveness (”presenteeism”).

Early Employee Health Promotion Programs were relatively basic and typically produced a return on investment (ROI) of less than one dollar for every dollar spent operating the program (ROI = <1:1).8 Such programs might be characterized as "fun-oriented".  Participation is entirely voluntary, and there is no particular focus on the reduction of specifically identified elevated risks.  Interventions and activities are not personalized, and there is no emphasis on the management of health expenditures.  These programs are typically site-based only, lack options to address all of the primary behaviorally-related health risks, and lack multimodal presentation.  Minimal or no incentives are provided to workers for participation, and services to spouses and family members are not available.  Most such programs lack meaningful evaluation.  

More conventional programs are "activity-oriented" and have determined an ROI of between 1:2.5 and 1:3.5.8 These programs may have a greater emphasis on health and risk reduction, although the efforts are relatively broad and not customized.  They may have some generalized emphasis on health cost management, although not necessarily aimed at specific high risks.  Most are site-based and voluntary, with spouses included only rarely.  Modest incentives and rewards may be utilized to promote participation.  Formal evaluation may be weak.

The newest and most economically viable programs are "results-oriented" and exemplify the health and productivity management model.  These programs consistently produce return rates of 1:4 or greater within a 12-24 month period.8   Such programs are strongly focused on the reduction of specifically identified elevated risks and the management of health costs.  They are generally voluntary, but use strong monetary and other incentives/rewards to promote participation.  They are multi-component in nature (address all major risks), and have both onsite and virtual modalities of operation.  The interventions are highly targeted and individualized, and available to spouses as well as staff members.

For organizations, the expense of offering healthcare insurance for their employees is of great importance.  Those expenditures have been growing at annual rates between 6 percent and 14%. Chapman's 2007 systematic review stated an average reduction in medical care expenditures of 26.5 percent as a result of Employee Health Promotion Programs.  His review covered 60 of the most scientifically valid research studies, with an average of 3.77 years of study.

Absenteeism due to illness is another cost driver.  Chapman's review reports an average reduction in sick time of 25.3%.   Cost for Worker's Compensation was reduced by 40.7%, and disability costs by 24.2%. There is also an emerging literature on the costs of presenteeism (reduced work rate).11,13  In one study, every risk reduced through a wellness program provideed a 9 percent reduction in presenteeism (and a 2 percent reduction in absenteeism).

Some businesses have achieved a zero percent growth in health care expenditures across at least brief periods of time.10  Doing so requires 90-95% participation of the employee population in focused wellness initiatives, with 75%-85% of the staff members falling into the low risk category.10  Although robust efforts to cut the risk status of those in moderate or high risk categories must be made, the needs of currently healthy staff members must be addressed as well to avoid increases in risk-status.

Given the size of the federal workforce, significant cost savings in the government's contribution to health insurance premiums for workers might be achieved if a majority of that population were participating in active wellness programs.  Similarly, improvements in absenteeism, worker's compensation, disability, presenteeism, and turnover as a result of robust Workplace Health Promotion Programs would yield substantial fiscal advantages for the government.

References

1.   Aldana, Steven G.  (2001)   Financial Impact of Worksite Wellness Programs:  A Comprehensive Review of the Literature.   Am J Health Promotion 15(5):296-320.
2.   Chapman, Larry.  (1998)   The Role of Incentives in Health Promotion.  The Art of Health Promotion  2(3):1-8.
3.   Chapman, Larry.   (2003)   Biometric Screening in Health Promotion:  Is it Really As Important as We Think?  The Art of Health Promotion  7(2):1-12.
4.   Chapman, Larry.  (2005)   Meta-Assessment of Worksite Health Promotion Programs Economic Return Studies: 2005 Update.  The Art of Health Promotion, July/August, 1-15.
5.   Chapman, Larry.   (2006)   Employee Participation in Company Health Promotion Programs and Company Health Promotion Programs:  How Important are Incentives, and Which Ones work Best?   North Carolina Medical Journal   67(6):  431-432.
6.   Chapman, Larry, Lesch, Nancy, and Passas Baun, Mary Beth.   (2007)   The Role of Health and Wellness Coaching in Corporate Health Promotion Programs.   The Art of Health Promotion, July/August, 1-12.
7.   Chapman, Larry.  (2007)   Proof Positive:  An Analysis of the cost-Effectiveness of Job Site Wellness.  Northwest Health Management Publishing, Seattle, WA.
8.   Chapman, Larry.  (2007)   An In-Depth Look at the Economic Evidence for Rewarding Health Behavior Change.   Workshop presentation at the World Research Group “Rewarding Healthy Behaviors for Health Plans and Employers” Conference, Orlando, FL, January 23-24.
9.   Edington, Dee.   (2001)   Emerging Research:  A View from One Research Center.  American Journal of Health Promotion 15(5): 341-349.
10.   Edington, Dee W.  (2007)   Health Management as a Serious Business Strategy.  Presentation at the World Research Group “Rewarding Healthy Behaviors for Health Plans and Employers” Conference, Orlando, FL, January 23-24.
11.   Pelletier, Barbara, Boles, Myde, and Lunch, Wendy.  (2004)  Changes in Health Risks and Work Productivity.   Journal of Occupational and Environmental Medicine, 46(7): 746-754.
12.   Pelletier, Kenneth R.  (2005)   A Review and Analysis of the Clinical and Cost-Effectiveness Studies of comprehensive Health and Disease Management Programs at the Job Site: Update VI 2000-2004.  JOEM 47(10)1051-1058.
13.   DeVol, Ross, Bedroussian, Armen, et. al.  (2007)  An Unhealthy America:  The Economic Burden of Chronic Disease.  Report released by the Milken Institute.   www.milkeninstitute.org.
14.   Partnership for Prevention.  (2008) Investing in Health:  Proven Health Promotion Practices for Workplaces.   http://www.prevent.org/images/stories/2008/investinginhealth_finalfinal.pdf.