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Workplace Wellness Programs Return on Investment and Implementation Tips

February 03, 2013 (6 min read)
By Rebecca A. Shafer, J.D., President, Amaxx Risk Solutions, Inc.
Michael Stack, Editor and Director of Operations, Amaxx LLC.
Robin E. Kobayashi, J.D., LexisNexis Legal & Professional Operations, LexisNexis Workers’ Compensation Law Community
Of the many workers’ compensation cost reduction initiatives available to employers today, wellness programs are by far the one of greatest interest. Employers seek statistics on ROI (return on investment), as well as costs of implementation of such programs, they hunt for information on how to implement such programs and which vendors provide them. How much can we save? What is the ROI? How quickly will I see the savings? Those are the primary concerns of employers today. Of all the articles I have written in the last 25 years, those on wellness programs have by far been most widely read and most requested for reprints.
Employers know intuitively they will reduce their workers’ compensation costs and medical insurance costs if their employees are healthier, but senior management always prefers to make decisions with concrete numbers. Using intuition or general projections can often lead to unmet expectations. They will find the numbers, as well as a case for action, in the recent article in Journal of Occupational and Environmental Medicine, “Medical Care Savings From Workplace Wellness Programs: What is a Realistic Savings Potential?”
The study focused on seven risk factors, i.e., smoking, high blood pressure, high cholesterol, overweight/obesity, physical inactivity, alcohol abuse, and low fruit and vegetable intake, noting that the three most costly medical conditions for working-age adults were cardiovascular disease, cancers, and diabetes.
According to this study:
  • An effective workplace wellness program could reduce average annual costs per working-age adult by $649.09 or 18.4%
  • For older working adults (60-64 years old), the possible savings could be substantially higher at $1,947.10 or 27.9%
  • The maximum savings would not be achieved immediately; rather, medical care savings will increase with time if:
    • “More eligible wellness program members participate.” Presently, not all eligible employees choose to participate in workplace wellness programs.
    • “Effective control of heightened risk factors improves.” Some people who participate have not been successful in lowering their risk factors.
    • “Greater risk reversal can be achieved.” Some people who participate have difficulty maintaining their lowered risk factors over time.
Employee turnover could present challenges for employers seeking to realize cost savings with workplace wellness programs because:
  • Some people will leave an employer before savings are realized
  • Some new employees might enter the work population with heightened risk factors
When designing an effective workplace wellness program, employers should note that age is an important variable:
  • Chronic diseases of aging first appear in middle age (45-59 years), becoming more prevalent in time and peaking during retirement (65+ years)
  • With respect to young working adults, the greatest potential savings could be achieved by controlling risk factors related to alcohol-related conditions, cardiovascular disease, and diabetes
  • With respect to older working adults, the greatest potential savings could be achieved by controlling risk factors related to cardiovascular disease and cancers.
  • The potential annual savings is 9 times greater for older working adults than for young adults; thus, an effective workplace wellness program should expend greater resources on older working adults

The most common types of wellness programs are:

1. Weight Control

2. Smoking Cessation

3. Depression Treatment

4. Migraine Headache Management

5. Substance Abuse (Alcohol / Drug Treatment)

Putting a wellness program into practice requires proactive planning. Dr. Thomas Glimp, Chief Medical Officer from Medcor, Inc. started a wellness program over one year ago. He states “Support and participation from the top is key. Our entire executive team is participating in the program nearly every day. We try to keep the program interesting and the feedback from our employees has been incredible. They state they are feeling better and are more thoroughly enjoying life. The program has also been a tremendous asset to attracting and retaining top level talent.”

“Employees are the most valuable resource that most corporations have,” says Dr. James A. Tacci, the Global Corporate Medical Director and Manager of Medical Health & Wellness Services at Xerox Corporation, and the new Editor-in-Chief of Occupational Injuries and Illnesses (LexisNexis). According to Tacci, “Intelligent investment in employee health, wellness and productivity not only improves employee health and well-being, it can enhance organizational effectiveness across multiple business functions, and it will ultimately improve the bottom line.”

Here are several suggestions from Workers Compensation Management Program, Reduce Costs 20% to 50% to get off to a good start:

  • Make all programs either free of charge to employees or at a much-reduced rate.
  • Encourage senior management participation to build program acceptance.
  • Formulate a written policy describing programs offered, employee access, goals, benefits, and expected outcomes. Be sure to include supervisor training.
  • Through surveys, identify any interest in or barriers to participation employees may have.
  • Identify at-risk employees through intervention programs (should be done with help of corporate human resources and legal departments).
  • Offer guidance by doctors, nurses, and counselors, and invite organizations such as Alcoholics Anonymous and Weight Watchers.
  • Use tools and resources such as the Body Mass Index Calculator or other diagnostic aids. A person suspected to being depressed might take a short Q&A “quiz” indicating current mood and feelings.
  • Provide community-based resources such as spa, yoga and gym memberships free or at reduced costs. If located at the workplace, allow generous weekday and weekend hours.
  • Use behavior modification programs such as relaxation techniques to reduce the pain of migraine headache.
  • Provide access to less common modalities such as massage, acupuncture, hypnosis, and pain management that are usually not covered by health insurance. A good massage can be better for pain than a prescription of Vicodin – and safer.
  • Sponsor on-site health fairs, classes, seminars, and written/electronic materials.
  • Educate employees and encourage participation in the wellness programs. Help them set attainable goals and teach the steps to reach these goals.
  • Provide incentives to keep everyone motivated such as time off to attend classes, prizes, and rewards for reaching significant goals.
The amount of interest and buzz created by wellness programs is justified as employers who take an active interest in the health and wellness of their employees will benefit. The more an employer can plan and understand wellness program variables and success factors, the greater the benefit for all parties.
According to Jacob Lazarovic, MD, FAACP, Senior VP and Chief Medical Officer of Broadspire, “Corporate wellness programs, when properly designed and effectively implemented, have proven to be important tools for mitigating the impact of these risks." He noted, "There is no doubt that the aging of the workforce and the increased prevalence of lifestyle-related co-morbid illnesses are factors that predispose to longer return to work durations and higher medical costs in workers compensation."
© Copyright 2013 Amaxx Risk Solutions, Inc. and LexisNexis. All rights reserved.
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