Guest blogger Linda K. Riddell tackles the age-old question: How do you adequately measure ROI of wellness programs? Measurement is possible, she writes. Find out how. —KMB
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There is always much noise and excitement about starting an employee wellness program, but the room goes silent when talk turns to return on investment. Highly paid consultants cite studies about ROI. Skilled HR professionals mumble about intangibles. Yet, no one offers a clear measure by which a wellness program’s success can be gauged.
It’s well past time for this kind of vagueness to stop being tolerated. A wellness program without clear goals and methods for measurement is meaningless.
Here are real-world examples of measures for wellness programs:
• A 10% decrease in claims for back pain.
• A 5% decrease in unplanned absences.
• A 7% decrease in the cost per claimant for heart disease.
• A 15% increase in the number of people participating in a diabetes self-management course.
• A 12% decrease in emergency room visits.
Wellness programs can and should be linked to concrete results like these. Employers who throw money at wellness programs and don’t demand results are wasting resources.
Wellness ROI can be measured if a program starts with clear data and analysis of a group’s own illnesses and patterns. You can set a goal to reduce back pain claims — but only if you first know that back pain is a problem among employees. With that knowledge, you then can design an intervention around back health that targets the group’s specific issues.
For example, I had one client that saw a lot of plan claims for back pain. The company paid employees a bonus for every quarter that posted zero workers’ compensation claims. It was a well-intentioned strategy, but claims for back problems were shifting to the health plan because employees didn’t want to ruin the quarterly bonus. Thus, the company needed to eliminate the bonus program, so that the root cause of the back problems could be uncovered and solved.
Another client also had high expenses for back pain, but for an entirely reason. Back pain is a common “cover” diagnosis for individuals seeking a steady source of painkillers. The client was posting an abnormally high number of prescriptions for narcotics and thus needed its pharmacy benefit manager to notify physicians about patients who had multiple prescribers, pharmacies and prescriptions for painkillers.
If these clients had taken the conventional get-more-people-to-do-sit-ups approach, neither would have seen any turnaround in health costs related to back problems. Any wellness approach that is not clearly and directly related to the problem will fail to deliver results.
Wellness should be much more than coaxing employees to “be healthier” for intangible results. It can be straightforward tactics that help to improve employee health and reduce costs.
Guest blogger Linda K. Riddell is a principal at Health Economy, LLC, where she works with clients on gaining practical tools to comply with health care reform, and to maximize the new opportunities that reform offers. She can be contacted at LRiddell@HealthEconomy.net.
