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Where is the real ROI for Wellness Programs?

By on June 22, 2015 in Expense, General with 0 Comments

 

logo 5Wellness programs in corporate settings is what Twitter would call “trending” and being happy and healthy is todays biggest fad.  Companies are finally facilitating wellness in things such as preventative programs, yoga  classes and free mental health options because they can finally place a positive dollar value on the ROI for being happy and healthy. That is awesome for both employees and employers!

An article by Soeren Mattke, Claims of Wellness Cost Savings Are Overblown: RAND, identifies two types of wellness programs.  Mattke calls them lifestyle management and disease management services.  Lifestyle management consisting of yoga and exercise classes and disease management aiding employees in scheduling doctor appointments, getting lab tests or needed medication.  In lay mans terms people who aren’t immediately a health care problem and people who are already costing the company in health care and absenteeism due to preexisting chronic illness.

With these two types of employees in mind lets take a look at where the real ROI lies using diabetes as an  example.

Harvard News tells us that 30% of overweight people have diabetes and on the flip side 85% of people with diabetes are overweight.  That being established if a company identifies 100 employees as being overweight and gets them to participate in a healthy lifestyle program that would cost $10,000 per month ($100 per employee) for the company only 30 of those employees could develop diabetes.  That program according to the RAND study has a monthly return of 25 cents for every dollar invested.  Those 30 at risk people may never develop diabetes  thus never incurring additional health care costs for the company or missing work due to the disease.  These lifestyle programs have a great ROI but because they are preventative in nature the ROI is indirect and more intangible; you cant measure   a companies healthcare savings on an individual if they never incur those costs to begin with.

The next type of program we’ll talk about brings a ROI that is the Lance Armstrong of return.

The company also identifies another 100 people with diabetes and enrolls them into a disease management program that costs the same.  85 of those people are probably overweight but because they receive help with getting lab tests and correct insulin dosages they miss less work, they have fewer doctor appointments and perhaps lose weight because their disease is managed properly.  The RAND study identifies a 3.5/1 ROI for these types of programs saving our make believe company $25,000 per month in  healthcare costs.

So lets have the bottom line here.  While both types of programs show a positive ROI, meaning a positive outlook for a healthy population, companies are finding a vastly larger return when addressing and managing their employees here and now problems.  Companies shouldn’t choose one over the other to implement, these programs compliment one another and because neither return is negative there is no reason not to.  Besides, we all know happy, healthy employees make a happy, healthy business in all things.

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