Employers are in love with their wellness programs, spending nearly 2% of their health claim dollars on the programs. Yet many companies fail to put the programs through a reality check by measuring their return on investment.
Fidelity Investments and the National Business Group on Health recently released data showing that most mid- to large-size employers offer, on average, 21 health promotion programs. The research, however, reveals that six out of 10 companies with the programs are in the dark on the ROI associated with their wellness programs.
For employers, measuring the ROI on a health promotion program can be difficult and expensive, considering that an employer is trying to calculate how much the company will save from a health event that has not occurred. Still, employers are willing to make substantial investments to the programs with the expectation that the results will come later.
For example, 51% of employers plan to institute at least one additional health management program in 2010 and 89% expect to continue the current programs they provide, according to the survey, which polled 121 employers in September and October 2009.
“Wellness programs are now a standard workplace benefit as employers recognize the need to invest in initiatives that help employees to better manage their health given that health care costs continue to soar,” says Sunit Patel, senior vice president of Fidelity’s consulting services business. Measuring the ROI on wellness programs is in its infancy, Patel notes. Employers should measure the programs “as a suite of offerings, as opposed to individual initiatives, [which] is essential to understanding the true impact of an employer's investment.”
Other findings from the survey include:
- Despite the outcome of health care reform, 91% of employers will continue to invest in their health management programs.
- More than half (57%) of companies report that they use incentives with cash value for their wellness programs. The most common incentives were reducing the employee’s health care premium and offering cash and contributions to a health reimbursement arrangement or a health savings account.
- One out of five companies (20%) spends more than $400 per employee a year on incentives, while 29% spend less than $100 per employee.
- Companies are spending almost the same amount of money on programs aimed at prevention and lifestyle wellness (45%) as on programs that manage conditions after the onset of disease or illness (43%).
- The most prevalent programs in the prevention and lifestyle categories are on-site flu shots (90% of companies offer them), preventive-care reminders related to screenings or annual exams (68%), employee assistance programs (92%), stress management (68%) and smoking cessation (66%).
- The top condition-management programs in use are nurse hotlines where nurses are available to answer questions via telephone (79%), diabetes disease management (74%), coronary artery disease, congestive heart failure and asthma disease management (69%).
