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Participants in Wellness Programs Had Lower Health Care Costs
Study of nearly 950,000 individuals shows decreased hospitalization costs, length of stay and admissions for those engaged in a comprehensive wellness program.

By Stephen Miller  1/25/2010
 

Health plan members who participated in fitness-related activities within an incentive-based wellness program had significantly lower medical costs, according to a study published in the January/February 2010 issue of the American Journal of Health Promotion.

The study examined the medical claims data over one year of 948,974 adult members of South Africa’s largest private insurer, Discovery Health. Of these members, more than 62 percent (591,134) registered for "Vitality," an incentive and reward-based health promotion program offered by the insurer to its members.

“Employers continue to struggle with increasing health care costs and the growing prevalence of chronic diseases, but more and more are turning to population health management programs as a solution,” said Arthur C. Carlos, CEO of The Vitality Group, a U.S. provider of wellness programs and a member of Discovery Holdings Ltd. “Incentive-based wellness programs are designed to change behaviors and improve the health of their members. By improving health in a sustainable way, it is possible to reduce costs over the long-term.”

Hospital Cost Savings and Shorter Stays

The adult insured members were grouped based on registration and their level of engagement in the Vitality program: not registered (37.5 percent), registered but not active in any health promotion activity (21.9 percent), low engagement (30.9 percent) and participated in enough activities to be considered highly engaged (9.5 percent). Most activities (i.e., fitness-related activities, assessment and screening, healthy choices, and health knowledge) and outcomes were validated.

Hospitalization costs were analyzed per member in the various groups, and the research indicates that not only did costs per member decrease based on activity level, but the same pattern was demonstrated for admission rates. For those admitted to a hospital, the length of stay and frequency of admission was significantly less for participants who were active in fitness-related activities.

This most engaged group had lower annual medical costs, admission rates and cost per admission than any of the other groups. Costs for medical conditions related to lifestyle factors were also lower, including:

21.38 percent lower for endocrine and metabolic disease.

17.44 percent lower for musculoskeletal disease.

15.09 percent lower for cancers.

7.17 percent lower for cardiovascular disease.

“The rise in incidence of chronic disease and associated health care costs is unsustainable,” said study leader Dr. Deepak N. Patel, a senior clinical specialist at Discovery Health. “As researchers, it is critical we evaluate and identify solutions to mitigate this trend. Although more research will need to be done, this study is encouraging as it shows a positive correlation between engagement in health promotion and lower health care costs.”

ROI Quantified

Rigorously conducted case studies indicate a positive return on investment (ROI) from employer-sponsored wellness programs, according to a report in the February 2010 issue of the journal Health Affairs. In "Workplace Wellness Can Generate Savings," researchers at Harvard University conducted an analysis of the literature on costs and savings associated with wellness promotion policies. "The evidence suggests that large employers adopting wellness programs see substantial positive returns, even within the first few years of adoption," they found. "Medical costs fall about $3.27 for every dollar spent on wellness programs, and absentee day costs fall by about $2.73 for every dollar spent."

Among the findings: Citibank's health management program reported an estimated savings of $4.50 in medical expenditures per dollar spent on the program, and studies from the California Public Employee Retirement System (CalPERS), Bank of America, and Johnson & Johnson similarly estimated sizable health care savings from wellness efforts.

Aside from savings on health care costs, wellness programs were likely to result in lower replacement costs for absent workers and were an advantage in attracting workers to the firm, the researchers concluded. All of this, they wrote, "suggests that the wider adoption of such programs could prove beneficial for budgets as well as health." 

Stephen Miller is an online editor/manager for SHRM.

Related Article:

Wellness Programs as an Employee Retention Tool, SHRM Online Benefits Discipline, January 2010

Size and Scope of Wellness Incentives Grow Larger, SHRM Online Benefits Discipline, August 2009

Why Employee Well-Being Matters to Your Bottom Line, SHRM Online Benefits Discipline, November 2009

Participants in Wellness Programs Had Lower Health Care Costs, SHRM Online Benefits Discipline, January 2010

Why Employee Well-Being Matters to Your Bottom Line, SHRM Online Benefits Discipline, November 2009

'Tectonic Plates' and the ROI of Health Benefit Programs, SHRM Online Benefits Discipline, October 2009

Finding Wellness's Return on Investment, HR Magazine, June 2008

The ROI of Wellness Programs: From Perk to Priority Investment, SHRM Online Benefits Discipline, January 2007

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