Health Fairs

Many employers, as part of their efforts to contain rising medical expenditures, are implementing worksite programs variously described as Employee Wellness , lifestyle programs, health and work rate management, population health management and, simply, wellness programs.

The purpose of this article is to consider whether such programs improve health. If so, do they in turn lower utilization of medical services and lower medical expenditures?

The popular media have done much to promote the concept of business wellness. Last year, In Business: Madison 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 Company, as published

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 peer review of scientific methods, support the ROIs published here?

Health and Productivity Leadership

Illness and injury associated with an unhealthy lifestyle or modifiable risk factors is stated to account for at least 25 percent of employee medical expenditures. The most significant of these risk factors are stress, tobacco use, overweight or obesity, physical inactivity, 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 concept that health risk reduction and care management programs have the potential to improve employee health, and that worksite health education, health risk management, and benefit counseling should complement standard medical insurance benefits.

The intensity of Employee Wellness  range from bulletin board, pamphlet or newsletter information to onsite fitness facilities, health risk reduction classes, and personal lifestyle change coaching.3 Employee Wellness  today frequently include a health risk assessment (HRA) to evaluate each employee’s modifiable risk factors of disease. Program coordinators then target interventions to those that are at increased risk through personal talks and individual follow-up.

Comprehensive Employee Wellness may include classes on health risk reduction and job safety, fitness and exercise activities, health club memberships, and reductions in co-payments or premiums for employees who adhere to recommended healthcare evaluation ground rules.

Along with this, some employers are restructuring health benefits and encouraging employees’ cost-sensitivity when accessing medical.5 These changes are intended to lower employees’ need for and utilization of medical, yielding reduced group medical expenditures. Demonstrated reductions in medical expenditures should then support employers with a powerful bargaining chip in negotiating decreased medical insurance premiums during future terms.

Evidence basis: A range of return on investment estimates

The empirical research has produced results as varied as the popular media on return on investment. Nonetheless, evidence continues to grow that well-designed and well-resourced Employee Wellness  and disease prevention programs support multi-faceted payback on investment. Peer-reviewed evaluations and meta analyses show that return on investment is achieved through improved worker health, reduced benefit expense, and enhanced work rate.

• Goetzel and colleagues, in their meta-analysis of two dozen articles summarizing economic evaluations of health and work rate management programs, observed an average return of $3.14 per $1 invested in traditional Employee Wellness . The return on investment estimates for the individual programs ranged from $1.49 to $13.7,8
• Aldana reviewed 72 articles and concluded that Employee Wellness  achieve an average return on investment of $3.48 when thinking of medical expenditures 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 return on investment between $4.56 and $4.73.10  Follow-up studies observed improvements in the risk profiles of participants, with the high-risk group improving more than the “usual care” group11 as a result of more intensive programming.
• Chapman’s 2004 meta-evaluation of 42 research studies, ranking overall validity of the research studies, reports cost-benefit ratios from $2.05-$4.64.

In addition to immediately quantifiable expense reductions, researchers have stated a variety of spin-off benefits: greater work rate, intellectual capacity, and reductions in disability12 and absenteeism.9,13,14,15 Such programs may also have positive effects on employee perceptions of the company14 and worker morale, even among nonparticipants. 13 These outcomes go beyond savings in direct medical expenditures to support non-health related return on investment.

Tailoring program to maximize return on investment Employee Wellness  aim to lower the health risks of employees at high risk while maintaining the health status of those at low risk. A variety of disease management 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 good risk reduction and costeffectiveness.

In 2001, University of Michigan researchers stated on stable trends in medical expenditures for over 2 million current and former employees 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 expenditures when groups of employees moved from low risk to high risk were much greater than the decreases in expenditures when groups moved from high risk to low risk. Their conclusion: Programs designed to keep healthy people healthy will likely support the greatest return on investment.

On the other hand, Pelletier’s meta-analysis16 and other program evaluations18 suggest that individualized risks reduction for high-risk employees within the context of accross the board programming is the vital element in achieving positive clinical and expense outcomes in worksite interventions.

Dose-Response?

Several factors might affect the effect of various programs and the ultimate return on investment, including cultural and environmental factors, workforce demographics, level of participation and longevity of the program.

Most cost-benefit research studies have been conducted in sizable corporations with more than fifty employees. But researchers have determined that similar results have the potential to be obtained by small corporations with as few as five employees actively involved in a well-managed program.

Various research studies also suggest that even relatively modest levels of participation have the potential to achieve substantial program effect. Contrary to reports by the popular media that such programs require more than 70 percent participation, published reports of at least one case showed positive return on investment with 51 percent participation.

Length of intervention appears to be a more salient variable: an effect on healthcare expenditures generally requires three-to five years of programming.

Future developments

Despite the abundance of positive program evaluations, several caveats remain. Negative results are less likely to be reported or published, thus biasing the return on investment upward.

Uncertainty persists regarding the specific effect of the various program components. But as these programs take hold, further research and evaluation will enable fine-tuning of program investments.

Meanwhile, the preponderance of data and the strength of the published research stand in favor of a positive return on investment for Employee Wellness . Indeed, the business case for such programs is now well enough defined that some insurance brokers offer discounted rates to corporations that institute or subscribe to wellness programs.

Future questions will focus on how best to combine accross the board and focused interventions, the intensity of elements, and how to calibrate the dose-response model to achieve a target return on investment. Here, employers, employees, and researchers will need to collaborate to define mutual objectives and goals in terms of both clinical and expense outcomes.