Stacy Van Alstyne
Wellness Programs Save Employers $1 to $3 for Every Dollar Spent
Incentives and Communications Help Improve Both Financial and Physical Health
Brookfield, Wisconsin— Most employers that have analyzed the financial impacts of their wellness programs have found $1 to $3 decreases in their overall health care costs for every dollar spent, according to the report titled A Closer Look: Wellness ROI by the International Foundation of Employee Benefit Plans. The report examines data from the Foundation’s recent Wellness and Value-Based Health Care survey and compares results between organizations that have analyzed the financial impacts of their wellness programs and those that have not. Find more resources at www.ifebp.org/wellnessroi.
“Without question, employers are beginning to understand the direct connection that wellness initiatives can have on both employee health and health care plan cost savings,” said Michael Wilson, Foundation CEO. “While the primary goal is reducing health costs, we’re also seeing other advantages from wellness initiatives, such as higher employee morale, increased productivity and reduced disability.”
The report also found that wellness program incentives, such as insurance premium reductions, and communications tools like web links and social networks are used more by organizations that are achieving positive returns on their wellness investment.
“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 Wilson.
The Foundation divided the respondents of the survey into two groups, the ROI group and the non-ROI group based on whether they measured and achieved positive returns. The data revealed significant differences between the two groups when it came to providing incentives and communicating wellness with the workforce.
Insurance premium reductions for participation in wellness programs accounted for the biggest difference between the two groups, 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/raffles. Those in the ROI group were also more likely than their counterparts to attach incentives to specific types of initiatives such as health screenings (65 percent to 43 percent), health risk assessments (74 to 51) and health care coaches/advocates (43 to 22). Participation among members of organizations in the ROI group increased dramatically when incentives are tied to health screenings and health risk assessments.
Communication was one of the most frequently cited reasons for achieving positive ROI given by organizations in the open-ended response section of the survey. Organizations experiencing ROI are more likely than the non-ROI group to provide most types of wellness information and electronic communications, such as web links (43 percent to 32 percent), social networks (18 to nine) and wellness seminars and speakers (65 to 45).
The survey, completed by members of the International Foundation, found that almost 74 percent of organizations experiencing ROI are more likely to have a broader value-based health care strategy that offers 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.
“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. “However it’s not an easy process. ROI can be difficult to measure since health improvement may be influenced by a combination of factors and because it can take anywhere from three to five years to see cost-saving results.”
About Wellness Programs and Value-Based Health Care
Survey responses were received in February 2012 from 646 individuals from the U.S. and Canada, including benefits and human resources professionals, financial managers, and other professionals. Respondents represented a variety of sizes, regions and industries or jurisdictions. Of the 646 members who responded, 539 were from organizations in the U.S. with representation from single-employers/corporations (66 percent), multiemployer trust funds (23 percent) and public/government employers (11 percent).
The International Foundation of Employee Benefit Plans is a member-driven organization with five decades of experience as a leading objective source of employee benefits, compensation and financial literacy education and information within the American and Canadian workplace. The Foundation’s expertise is industry wide; and it offers resources that include Foundation staff, training, conferences and research on topics critical to assisting its 35,000 multiemployer, corporate and public sector members respond to trends affecting the well-being of more than 25 million lives in North America. For additional information, visit http://adminpreprod.ifebp.org/IFEBP/Templates/.
Find more resources at www.ifebp.org/wellnessroi.