Health Promotion Programs Economic Considerations.
Initially introduced by Halbert Dunn in the 1950′s, wellness became a well-liked buzzword during the late 1970′s and received considerable academic attention in the 1980′s.
Health promotion programs for staff became more widespread during the following decade, and credible evidence for their economic viability began to be published.
There have now been over 100 published studies on this topic and a number of systematic reviews.
Health risks increase costs. Medical and health insurance costs escalate with both age and number of risks present.8,10 the number of risks is also strongly related to sick time absenteeism, Employee’s Compensation costs, short-term disability, and reduced productivity (“presenteeism”).
Early staff member health promotion programs were relatively basic and usually produced a Return On Investment (ROI) of less than one dollar for every dollar spent operating the health promotion program (Return On Investment (ROI) = <1 - 1).8
Such wellness programs could be characterized as “fun-oriented”. Participation is entirely voluntary, and there is no particular focus on the reduction of in particular identified high risks.
Interventions and activities are not personalized, and there’s no emphasis on the management of medical costs. These health promotion programs are generally site-based only, lack options to address all the major behaviorally-related health risks, and lack multimodal presentation.
Minimal or no incentives are provided to employees for participation, and services to spouses and family members are not available. Most such health promotion programs lack meaningful analysis.
More conventional wellness programs are “activity-oriented” and have shown an Return On Investment (ROI) of between 1 – 2.5 and 1 – 3.5.8 These wellness programs may have a greater emphasis on health and risk reduction, although the efforts are relatively wide and not personalized.
They may have some generalized emphasis on health care cost management, although not necessarily aimed at specific high risks. Most are site-based and voluntary, with spouses included only rarely.
Modest incentives might be utilized to encourage participation. Formal investigation might be weak.
The newest and most economically viable health promotion programs are “results-oriented” and exemplify the health and productivity management model. These health promotion programs consistently produce return rates of 1 – 4 or greater within a 12-24 month period.8
Such wellness programs are strongly focused on the reduction of in particular identified high risks and the management of healthcare costs. They are ordinarily voluntary, but use strong financial and other incentives to promote participation.
They are multi-component in nature (address all major risks), and have both onsite and virtual modalities of operation. The interventions are highly targeted and individualized, and offered to spouses as well as workforce.
For companies, the cost of providing health insurance for their staff members is of excellent importance. Those costs have been increasing at annual rates between 6% and 14%.
Chapman’s 2007 systematic review7 reported an average reduction in healthcare costs of 26.5% thus of worker wellness programs. His review covered 60 of the most scientifically valid studies, with an average of 3.77 years of study.
Absenteeism due to disease is another cost driver. Chapman’s review7 reports an typical reduction in sick leave of 25.3 percent. Cost for Employee’s Compensation was lowered by 40.7 percent, and disability costs by 24.2 percent.
There is also an emerging literature on the costs of presenteeism (reduced productivity).11,13 In one study, every risk reduced through a health promotion program yielded a 9% reduction in presenteeism (and a 2% reduction in absenteeism).11
A lot of corporations have achieved a zero% increase in health care costs across at least brief periods of time.10 Doing so requires 90-95% participation of the employee population in focused health promotion programs, with 75%-85% of the workforce falling into the low risk category.10
Despite the fact that comprehensive efforts to lower the risk status of those in moderate or high risk categories should be made, the needs of currently healthy workforce should be addressed as well to avoid increases in risk-status.
Given the size of the federal workforce, meaningful cost savings in the government’s contribution to medical insurance premiums for employees can be achieved if a majority of that population were participating in active wellness programs.
In like fashion, improvements in absenteeism, employee’s compensation, disability, presenteeism, and turnover so of extensive staff member health promotion programs would yield substantial fiscal benefits for the government.
References
1 Aldana, Steven G. (2001) Financial Impact of Health Promotion Programs – A Robust Review of the Literature. Am J Health Promotion 15(5) – 296-320.
2 Chapman, Larry. (1998) the Role of Incentives in Wellness. The Art of Wellness 2(3) – 1-8.
3 Chapman, Larry. (2003) Biometric Screening in Wellness – is it Really as Important as We Think? the Art of Wellness 7(2) – 1-12.
4 Chapman, Larry. (2005) Meta-Evaluation of Corporate Wellness Economic Return Studies – 2005 Update. The Art of Wellness, July/August, 1-15.
5 Chapman, Larry. (2006) Employee Participation in Employee Health Promotion and Health Promotion Programs – Precisely how Important are Incentives, and Which Ones work Best? North Carolina Medical Journal 67(6) – 431-432.
6 Chapman, Larry, Lesch, Nancy, and Passas Baun, Mary Beth. (2007) the Role of Wellness Coaching in Company Wellness. the Art of Wellness, July/August, 1-12.
7 Chapman, Larry. (2007) Proof Positive – an Analysis of the cost-Effectiveness of Employee Wellness. Northwest Health Management Publishing, Seattle, WA.
8 Chapman, Larry. (2007) an In-Depth Look at the Economic Evidence for Rewarding Health Behavior Change. Workshop presentation at the World Research Group “Rewarding Healthy Behaviors for Health Plans and Employers” Conference, Orlando, FL, January 23-24.
9 Edington, Dee. (2001) Emerging Research – A View from One Research Center. American Journal of Health Promotion 15(5) – 341-349.
10 Edington, Dee W. (2007) Health Management as a Serious Company Strategy. Presentation at the World Research Group “Rewarding Healthful Behaviors for Health Plans and Businesss” Conference, Orlando, FL, January 23-24.
11 Pelletier, Barbara, Boles, Myde, and Lunch, Wendy. (2004) Changes in Health Risks and Be certain to work Productivity. Journal of Occupational and Environmental Medicine, 46(7) – 746-754.
12 Pelletier, Kenneth R. (2005) A Review and Analysis of the Clinical and Cost-Effectiveness Studies of extensive Health and Disease Management (DM)Programs at the Worksite – Update VI 2000-2004. JOEM 47(10)1051-1058.
13 DeVol, Ross, Bedroussian, Armen, et. Al. (2007) an Unhealthful America – the Economic Burden of Chronic Condition. Report released by the Milken Institute. www.milkeninstitute.org.
14 Partnership for Prevention. (2008) Investing in Health – Proven Wellness Practices for Worksites. http – //www.prevent.org/images/stories/2008/investinginhealth_finalfinal.pdf.