Employers betting on wellness programs seem to be making the right call. They're seeing $1 to $3 decreases in their overall health care costs for every dollar spent, finds a report from the International Foundation of Employee Benefit Plans.
“Without question, employers are beginning to understand the direct connection that wellness initiatives can have on both employee health and health care plan cost savings,” says Michael Wilson, Foundation CEO. “While the primary goal is reducing health costs, we're also seeing other advantages from wellness initiatives, such as higher employee morale, increased productivity and reduced disability.”
The report also finds that wellness program incentives — such as insurance premium reductions and communications tools like web links and social networks — are used more by organizations that are achieving positive returns on their wellness investment.
Still, only 19 percent of organizations are measuring return on ROI on wellness programs, Wilson says.
IFEBP divided the respondents of the survey into two groups, the ROI group and the non-ROI group based on whether they measured and achieved positive returns.
Insurance premium reductions for participation in wellness programs accounted for the biggest difference between the two groups, with 49 percent of the ROI group providing this incentive as opposed to just 29 percent of the non-ROI group.
Other popular incentives included gift cards and non-cash incentives/prizes/raffles. Those in the ROI group were also more likely than their counterparts to attach incentives to specific types of initiatives such as health screenings (65 percent to 43 percent), health risk assessments (74 percent to 51 percent) and health care coaches/advocates (43 percent to 22 percent).
Participation among members of organizations in the ROI group increased dramatically when incentives are tied to health screenings and health risk assessments, the report shows.
Communication was another factor in achieving positive ROI. And, most organizations (74 percent) experiencing ROI are more likely to have a broader value-based health care strategy that offers initiatives such as health screenings, stress management programs, health risk assessments, and fitness and nutrition programs compared to just 45 percent of the non-ROI group.
“Determining ROI can be of great benefit for employers—leading to increased buy-in from organizational leaders and workers,” says Julie Stich, IFEBP's director of research.
But she says it's still not an easy process, as ROI can be “difficult to measure since health improvement may be influenced by a combination of factors and because it can take anywhere from three to five years to see cost-saving results.”
Roughly 650 people from the United States and Canada were surveyed in February.
For more on this topic, see The Financial Virtue of Wellness.
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