Wellness Programs and ROI

Everyone seems to know that employee health is increasingly a financial focus for employers. Not many are aware that one estimate suggests more than 75% of an employer’s healthcare costs and losses in productivity are related to employees’ lifestyle choices: voluntary actions that reduce their general wellness. This fact results in a need for employers to reduce costs by implementing wellness programs that empower their employees to make healthier lifestyle choices while seeing a significant ROI.

However, to realize a decline in health costs due to employee lifestyle choices, employers must do more than simply encourage their employees to exercise. A well-designed wellness program should do the following:

  • Boost Productivity
  • Improve Morale
  • Decrease Stress
  • Result in Employer Savings

The elements of a wellness program should revolve around an integrated communication and incentive strategy: employees need to know about a wellness program and want to participate. There must be targeted communication from the employer regarding wellness, and health plans should be designed to drive compliance. Additionally, the company should foster a general culture of health. Finally, incentives should be used to encourage and reinforce behavior changes. Health data can be consolidated with informatics technology to help identify what is and what is not working within a wellness program. Only when that data is analyzed can ROI be accurately identified and measured.

Identifying wellness program ROI is fundamentally about being able to access, collect and analyze the appropriate data. Using advanced data analytics technology, employers can track biometric data across the course of one or multiple years. If the employee’s risk score is decreasing and their use of the wellness program tracks appropriately, the positive effects and ROI can be seen quantitatively. Furthermore, extensible data warehousing capabilities can provide a year over year comparison of costs and isolate data to provide further conclusive details of savings achieved in relation to the wellness program.

Over the long term, employers can track changes in healthcare costs and compare this data to wellness program participation. With this information, employers are able to adjust their wellness program, if needed, to maximize employee results and to increase cost effectiveness of their overall program. For example, an employer survey might reveal high satisfaction with the wellness program as a whole but dissatisfaction with the available time for wellness classes – the employer could then adjust schedules to improve the employee experience.

Data analytics plays a vital role in informed wellness program decision-making. When effectively planned and implemented, a wellness program can improve employee health and help reduce employer health plan costs. To be successful in implementing, evaluating and measuring the performance of a wellness program, it is essential to identify appropriate members for participation, create member populations for measurement and assess all costs associated with the program.

For more information on the role data analytics plays in helping identify wellness program ROI, download our free whitepaper: Employee Wellness Programs: Identifying Opportunities and Verifying ROI