Most North American employers that have analyzed the return on investment (ROI) of their wellness programs have found $1 to $3 decreases in their overall health care costs for every dollar spent, according to A Closer Look: Wellness ROI, a report by the not-for-profit International Foundation of Employee Benefit Plans.
The report examined data from the foundation’s 2012 Wellness and value-Based Health Care survey and compared results between organizations that have analyzed their wellness programs' ROI and those that have not. A key finding: Organizations that found a positive ROI on their wellness dollars more often used wellness program incentives such as insurance premium reductions, and communications tools such as web links and social networks.
“While only 19 percent of our members are analyzing the financial data of their wellness programs, the data gives us insights regarding initiatives in their programs that are successful and may provide a blueprint for other organizations in developing or improving their own wellness campaigns,” said Michael Wilson, the foundation's CEO, in a media statement.
Another noteworthy finding: Almost 74 percent of organizations experiencing ROI were more likely to have a broader value-based health care strategy including initiatives such as health screenings, stress management programs, health risk assessments, and fitness and nutrition programs, compared to just 45 percent of the non-ROI group.
Insurance premium reductions for participation in wellness programs accounted for the biggest difference between those employers that reported wellness program ROI and those that didn't, with 49 percent of the ROI group providing this incentive as opposed to just 29 percent of the non-ROI group. Other popular incentives included gift cards and non-cash incentives, prizes, and raffles.
Moreover, those in the ROI group were more likely than their counterparts to attach incentives to specific types of initiatives such as:
- Health screenings (65 percent in the ROI group vs. 43 percent in the non-ROI group).
- Health risk assessments (74 percent vs. 51 percent).
- Health care coaches or advocates (43 percent vs. 22 percent).
In particular, wellness program participation increased dramatically when incentives were tied to health screenings and health risk assessments.
Communication was one of the most frequently cited reasons for achieving positive ROI. Those experiencing ROI were more likely than the non-ROI group to provide most types of wellness information and electronic communications, such as:
- Web links to health-promotion advice (43 percent in the ROI group vs. 32 percent in the non-ROI group).
- Social networks (18 percent vs. 9 percent).
- Wellness seminars and speakers (65 percent vs. 45 percent).
“Determining ROI can be of great benefit for employers—leading to increased buy-in from organizational leaders and workers,” explained Julie Stich, the foundation’s director of research. She noted, however, that it can take from three to five years to see cost-savings results.
Survey responses were received in February 2012 from 646 individuals from the U.S. and Canada, including benefits and HR professionals and financial managers. Respondents represented companies of a variety of sizes and from a variety of regions and industries.
Stephen Miller, CEBS,is an online editor/manager for SHRM.