Employee Health Promotion

Many employers, as part of their efforts to contain rising health care costs,
are launching worksite programs variously described as Employee Health Promotion
, 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 reduce utilization of health care services and reduce
health care expenditures?

The popular media have done much to reward the concept of organization 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 Employer, as published

Would these ROIs stand up to thorough empirical analysis of the data? What
factors lead to 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 potentially-modifiable
risk factors is published to account for at least 25% of employee health care
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 echelons have promoted the concept that health risk
reduction and care management programs can improve employee health, and that
worksite health education, health risk management, and benefit counseling must
complement standard health care insurance benefits.

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

All-Inclusive Employee Health Promotion 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 guidelines.

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

Evidence basis: A range of ROI estimates

The empirical research has produced results as varied as the popular media
on ROI. Nonetheless, evidence continues to grow that well-designed and well-resourced
Employee Health Promotion and disease prevention programs offer multi-faceted
payback on cost. Peer-reviewed evaluations and meta analyses show that ROI 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, saw an average
  return of $3.14 per $1 invested in traditional Employee Health Promotion .
  The ROI estimates for the individual programs ranged from $1.49 to $13.7,8
• Aldana reviewed 72 articles and concluded that Employee Health Promotion
  achieve an average ROI of $3.48 when thinking of health care costs 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 published that within
  a 2 year period, Citibank realized a ROI between $4.56 and $4.73.10 Follow-up
  studies saw 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-assessment of 42 different studies, ranking central
  validity of the different studies, reports cost-benefit ratios from $2.05-$4.64.

In addition to immediately quantifiable cost reductions, researchers have published
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 health
care costs to offer non-health related ROI.

Tailoring program to maximize ROI Employee Health Promotion aim to reduce 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 organizations
now seek to calibrate their interventions in order to achieve good risk reduction
and costeffectiveness.

In 2001, University of Michigan researchers published on stable trends in health
care costs 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 costs when groups of employees moved from low risk to high
risk were much greater than the decreases in costs when groups moved from high
risk to low risk. Their conclusion: Programs designed to keep healthy people
healthy will likely offer 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 essential element in achieving
positive clinical and cost outcomes in worksite interventions.

Dose-Response?

Several factors might affect the influence of various programs and the ultimate
ROI, including cultural and environmental factors, workforce demographics, level
of participation and longevity of the program.

Most cost-benefit studies have been conducted in large organizations with more
than fifty employees. But researchers have demonstrated that similar results
can be obtained by small organizations with as few as five employees actively
involved in a well-managed program.

Various studies also suggest that even relatively modest levels of participation
can achieve substantial program influence. Contrary to reports by the popular
media that such programs require more than 70% participation, published reports
of at least one case showed positive ROI with 51% participation.

Length of intervention appears to be a more salient variable: an influence
on healthcare costs 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
ROI upward.

Uncertainty persists regarding the specific influence of the various program
components. But as these programs take hold, further research and assessment
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 ROI for Employee Health Promotion . Indeed, the
organization case for such programs is now well enough defined that some insurance
brokers offer discounted rates to organizations 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 components, and how to calibrate the dose-response
model to achieve a target ROI. Here, employers, employees, and researchers will
need to collaborate to define mutual goals/objectives in terms of both clinical
and cost outcomes.