"...when individuals participated in a health management program and successfully improved their health or lifestyle, the average productivity savings was $353 per year. Participants were also absent 0.2 fewer days than nonparticipants."
How do you determine your wellness program ROI? It can be tough to quantify, but focusing on more than just medical cost savings will give you a better way to bottomline your return on investment in a meaningful way.
New research from Optum suggests looking less at medical cost savings and more at the benefits for increased productivity and risk reduction.
Optum's annual health management in the workplace study flagged some developing trends.
“In our industry each year, there are several studies that are connected and published to estimate the impact of health management programs,” says Stephen Hartley, director of analytics of Health & Wellness at Optum. “Most of the time those studies tend to focus on medical cost savings and that component of savings. We think looking at just medical expenditures ... probably underestimates the impact of these programs.”
According to Optum, when individuals participated in a health management program and successfully improved their health or lifestyle, the average productivity savings was $353 per year. Participants were also absent 0.2 fewer days than nonparticipants.
Optum associate director of healthcare economics Rebecca Mitchell says that employers can use these findings to “model their own outcomes.”
“When we look at a typical person who may work about 240 days per year, that is 10.3 hours gained [and] amounts to a 0.5% gain in production time” she says.
“When we look at a typical person who may work about 240 days per year, that is 10.3 hours gained [and] amounts to a 0.5% gain in production time”
In the study, Optum tracked 3,793 participants in the 18-70 age bracket who worked with nurses, wellness coaches and Optum's health management programs at Optum client companies.
The study found that employees not participating in the programs lost 27 days in productivity per year due to poor health or more than 12% in lost employee capacity annually.
A second study found that individual health program participation also reduces risk. High-risk employees who completed one of Optum's telephonic wellness coaching, online health coaching or biometric screening programs "achieved significant reduction in risk," explains Hartley.
Employees with high blood pressure, high body weight, high cholesterol, poor nutrition, low physical activity, stress and tobacco use are considered high-risk.
“High-risk individuals who complete the single Optum health management program achieved significant risk reductions for some risk, and individuals that complete more than one actually see incrementally greater odds of reducing the health risk,” Hartley explains.
[And]“It’s important to look at both sides of that health risk. If you just focus on those that are at risk, and reducing their risk, you’re missing out on the potential savings that can come from keeping people who are not at risk healthy,” Hartley says.
So medical cost savings -- yes, but don't forget to factor in increased productivity and reduced risk when assessing the value of your workplace wellness program.
Source: Giardina, Michael. "Focus on Medical Cost Savings Underestimates Wellness Benefits" Employee Benefit News, January 31, 2014 http://ebn.benefitnews.com/news/focus-on-medical-cost-savings-underestimates-wellness-benefits-2739009-1.html
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