Wellness programs help organizations improve employee health and productivity while reducing health care costs.
The purpose of corporate wellness programs is to improve employee health and productivity. First introduced by Halbert Dunn, M.D., a public health official in the 1960s, wellness programs were ignored until the 1990s when the cost of health care started to skyrocket. Now, organizations want to know if these programs will help reduce their health care costs, 50 percent of which attribute to preventable illness, such as high blood pressure, diabetes and coronary disease.
Definition
Dr. Dunn defined wellness as an integrated approach to maximizing an individual's potential that requires a balanced lifestyle. Wellness programs help employees improve their health and quality of life so that they can be more productive. In this context, wellness is more than just the absence of disease; it is about achieving and maintaining an optimal level of health.
Description
Typically, corporate wellness programs focus on health-related areas over which employees have control, such as weight, smoking, alcohol use, exercise and stress management. These are also areas in which employees are most likely to develop health issues that lead to increased absenteeism, insurance claims for work-related accidents, reduced productivity and higher employee turnover. For example, although many government agencies and businesses ban tobacco smoking, it is still the number one cause of premature death in the U.S., according to a 2010 report by Surgeon General Regina Benjamin, M.D.
Corporate wellness programs focus on helping employees change their behaviors to prevent disease and injury rather than treat it. The program's scope depends on the organization's needs; for example, some programs may target tobacco use, exercise or obesity while others offer comprehensive programs including health management, employee education and disease management support for patients and doctors.
Cost Savings
Corporate wellness programs operate on the premise that it is necessary to spend money to save money. So, savings associated with these programs are expressed as a return on investment, or ROI, ratio. According to US Corporate Wellness, the average ROI programs ranged from 3:1 to 5:1 in 2009. Organizations saved $3 to $5 in health care and other costs for every dollar they spent on wellness programs. In some instances, the ROI can be as high as 13:1.These saving resulted from reduced sick leave, health care, workers' compensation and disability management costs.
Savings Notes
The savings levels depend on a number of factors, including the size of the organization, the nature and extent of the program, and the incentives offered to employees for participation. Organizations with comprehensive programs, such as The Bank of America and California Public Employee Retirement System, reported savings ranging from $5.50 to $6.50 for each dollar spent in 2008. There may not be a correlation between the cost of the program and the ROI. According to a 2008 study conducted by Corporate Wellness Companies, some of the most expensive programs produced the lowest ROIs, although comprehensive programs tend to save employers more than targeted programs. Wellness programs with negative returns on investment are less likely published; consequently, the average ROIs may be inaccurate. In addition, organizations did not make adjustments for inflation or for the changing value of money over time. Therefore, both costs and savings may be overstated.
Tags: health care, wellness programs, comprehensive programs, Wellness programs, care costs, Corporate Wellness, corporate wellness
