Wellness Watch September 2009

In Search of ROI

As a health promotion program provider, we are sometimes asked by clients what will be my return on investment from my wellness program? It is a fair question with a complicated answer. There have been many studies over the years which have documented the effectiveness of wellness programs, some saying that for every one dollar of investment, an organization can realize up to $5 in return in future heath care costs.^{1, 2} These studies are usually meta-reviews of a number of smaller studies or a study with a large employee population based over a series of years. Most organizations which are running wellness programs aren’t at a point where they are willing to invest the time, money and effort into that kind of study.

There has been some research in two areas where an ROI on projected future use of the health care and pharmaceutical benefit may be realized – in smoking cessation and obesity reduction measured by BMI.^{3, 4} This is not surprising since most know the impact of smoking and obesity on disease prevention.

However, a study published in the April 2009 Journal of Occupational and Environmental Medicine suggests that poor health among workers is far costlier that just medical costs because poor health impacts productivity. In a recent Employee Benefit News podcast, the lead researcher of the study, Ronald Loeppke, MD, MPH, stated that the full cost of poor health is 30% medical and pharmaceutical costs and 70% health-related productivity costs shown by absenteeism and presenteeism (an employee is at work but not working up to full capacity because of medical considerations.) He suggests that instead of focusing exclusively on ROI, employers should consider VOI – value of investment. The health of a workforce is a performance driver and enhanced productivity is of great value and leads to a greater bottom line. To quote Dr Loeppke: “Enlightened employers are increasingly looking to the benefits of good health as an investment to be leverage rather than just looking at the health care benefit that has to be managed.”

So how does this relate to on-site wellness programs? It means that a company which is working to provide a culture of wellness by offering a variety of health promotion events and activities in areas of weight management, increased physical activity, smoking cessation, stress management, for example, is on the right track. The more in-depth and consistent the programs can be directed to behavior change, the higher probability that an ROI will be realized down the road in health care costs. But keep in mind that the true value of your wellness program investment is likely to show up in increased productivity and performance and that is what really affects the bottom line.