This article appeared in the Fall 2006 edition of Insights magazine, published by the Northeast Human Resources Association (NEHRA)
BACKGROUND
America spends more per capita on health care than any other industrialized nation, but our health status and life expectancy both rank surprisingly low. In fact, some measures suggest that our health is deteriorating. The combination of high costs and high rates of chronic disease creates a strong incentive for organizations to seek new ways to maximize the health of their employees.
The good news is that some of the costliest conditions are also potentially modifiable. In fact, the Centers for Disease Control and Prevention estimate that the majority of premature deaths can be attributed to preventable, lifestyle-related causes. The top three “actual” causes of death, which account for 800,000 deaths annually, are diet/sedentary lifestyle, tobacco, and alcohol.
To have a meaningful impact and maximize ROI, organizations need to tailor their worksite health promotion programs to match their employees’ health needs and the major cost drivers. A review of employee demographics can suggest programs that may be relevant for a particular organization. In addition, companies that have partnered with a single health insurer may review their pattern of health insurance claims, which is an even more precise guide to program planning than demographics.
KEY TARGETS AND STRATEGIES
Even when organizations lack detailed insurance claim data, a number of conditions are widespread enough to be appropriate for most health promotion programs. These conditions include:
Obesity/sedentary lifestyle. The U.S. Department of Health and Human Services reports that obesity accounts for 4.3-9.1% of the nation’s total annual healthcare expenditures, and costs businesses $13 billion. Concerned about such costs, many employers have made some attempts to address this concern through wellness programs such as onsite nutrition seminars, but immediate savings are not always apparent. However, evidence is emerging that a more comprehensive approach can be effective if it involves three components: raising awareness, building skills, and creating supportive environments. Employers are well positioned to remove some of the most commonly cited obstacles to exercise, such as lack of time or access to facilities. Strategies that have been shown to be effective include:
- Promoting healthy foods in cafeterias, vending machines, and company meetings
- Providing clear, simple nutrition information on foods being offered
- Subsidizing healthy food choices to make them more financially appealing
- Providing more access and opportunities for physical activity (e.g., onsite fitness centers)
A number of other promising strategies have been recommended by Healthy Workforce 2010 (an initiative of theU.S. Dept. of Health and Human Services) and The National Business Group on Health, including:
- Offer Weight Watchers at Work meetings or similar programs
- Offer online or telephonic health promotion programs
- Provide incentives to join a health club
- Sponsor a company fitness challenge
- Support lunchtime walking/running groups or company sports teams
- Allow flexible schedules to make it easier for employees to exercise
- Provide showers, lockers, and/or bike racks
- Offer health plans with fitness discounts or rebates, and remind employees of the benefit
- Provide additional incentives for employees to participate in fitness or wellness programs
- Provide a discount or incentive for distance parking to encourage walking
- Provide a longer break to employees who exercise during lunchtime
Depression. The Institute for Clinical Research and Health Policy Studies at Tufts-New England Medical Centerranked depression the number one condition in productivity cost, at $1,800 per year per depressed employee. Yet most depressed individuals receive no professional assistance—or, in many cases, only partial treatment. Human resource professionals can help by encouraging employees to participate in periodic depression screening, either online or onsite. Offering an employee assistance program and strongly promoting it can also be helpful.
Alcohol and drug abuse. An estimated 8% of American workers are heavy drinkers, costing the nation $200 billion in lost productivity. This problem can best be addressed in three steps. First, develop, communicate, and enforce drug-free workplace policies. Second, provide easy access to counseling and referrals. Third, train managers to identify and refer employees who may be impaired. Treatment providers may then monitor and report on treatment compliance, and help arrange a return-to-work plan.
MAXIMIZING PROGRAM UTILIZATION
Of course, the best-designed programs are only effective when utilized. According to MEDSTAT and the American Productivity and Quality Center, utilization can be improved by aligning the program with business strategies. They recommend having a leader or champion identified with the program, obtaining support from senior management, and demonstrating the link between health and productivity. Other researchers have emphasized the importance of incentives, effective communications, and program evaluation. It is advisable to reach out to employees through multiple channels; onsite seminars alone typically reach less than 10% of employees, while incentive programs and individualized interventions tend to impact a much larger number.
Additional factors emphasized by Healthy Workforce 2010 and Partnership for a Healthy Workforce include:
- Supportive physical and social environments that reflect an organization’s commitment to healthy practices, reinforced by appropriate health-promoting policies
- Integration of programs into the organization’s structure
- Linkage to EAP (employee assistance programs) and work/life programs
- Health screening programs with follow-up referrals and treatment
- Follow-up interventions to ensure individual health behavior change
- Program evaluation and quality improvement plans
RETURN ON INVESTMENT
Despite the challenges of undertaking research in the workplace, many companies have reported encouraging ROI data. A recent study in Health Care Financing Review found an average ROI of $6.81 for disease management programs. Similarly, a study in Health Promotion International found that a comprehensive worksite health promotion program dramatically limited the rise in participants’ health care costs.
In addition:
- Participants in Procter & Gamble’s health promotion program had 29% lower total health care costs by the third year.
- Participants in the Johnson & Johnson Live for Life program demonstrated much lower inpatient costs (compared to non-participants) in the fourth and fifth years of the program, suggesting that a company may need to make a long-term commitment to health promotion in order to realize cost savings.
- Canada Life’s long-term employee health and worksite fitness program yielded an ROI of $6.85, with reduced absenteeism, turnover, and health claims, as well as a 4% increase in productivity.
- Coca-Cola saved $500 per employee annually with an exercise program alone; 60% of employees participated.
- Sunbeam-Oster Co. provided mandatory prenatal education classes to pregnant employees and saw an 86% reduction in maternal and newborn care costs.
- A number of researchers have conducted reviews and meta-analyses of published articles on health promotion programs, and have consistently reported an average ROI of over $3 for every $1 invested in such programs. While many of the cost-benefit studies have focused on larger companies, other research has shown thatn businesses with as few as five employees can achieve similar results.
- A 38-month study of 23,000 participants in Citibank’s health management program found an ROI of $4.70, saving the company $7 million in under two years. This multi-component program combined health promotion, disease management, and demand management features. Over 54% of eligible employees participated, even though the incentive provided was only $10. The high-risk employees, who received the most intensive programming, showed the greatest savings.
- Bank of America found similar results with their multi-component program, which offered a $30 incentive; this program reduced insurance claims by an average of $164 per participant per year (vs. a $15 increase per year per non-participant).
SUMMARY
The data thus far on worksite health promotion programs yielding a high ROI is very promising. This is especially evident when the programs are comprehensive, evidence-based, and maintained over several years. Such programs frequently reduce healthcare expenses, and in other cases slow the rise in costs. These programs also have the potential to decrease absenteeism, increase productivity, improve morale, and reduce turnover. Moreover, well-designed health promotion programs can be quite appealing to employees, and lead a company to gain visibility as an “employer of choice”.