About Wellness Corporate Solutions

Monday, September 29, 2008

Calculating Corporate Wellness ROI

I recently stumbled upon a fantastic article from June’s HR Magazine called “Finding Wellness’s Return on Investment,” which delves into the complex problem of how, exactly, to calculate a corporate wellness program’s ROI. It also covers a range of related issues—like why it’s so important to be able to quantify an impact on the bottom line!

The piece cites a number of businesses that have figured out how to compute their wellness programs’ ROI. Like Highmark, Inc., a 12,000-employee health insurer based in Pittsburgh, which ran a long-term, one-of-a-kind study on wellness and prevention programs and published the impressive results in the February 2008 Journal of Occupational and Environmental Medicine:
“In 2001-05, medical claims for 1,900 Highmark employees who participated in its wellness programs were compared with the claims of employees with similar health risks who did not participate. The analysis shows that the company saved $1.3 million during the time of the study, mainly because its annual health care expenses for participating employees were $176 lower per employee. Highmark's total expenses for its wellness programs were $808,958 during this time, yielding an ROI of $1.65 for every dollar spent on wellness initiatives.”
Data like this is particularly noteworthy because there is so little research like it out there. Why? In part because there is no single, standard way to measure wellness ROI, says the article.

Still, that’s slowly changing: For example, The Alliance for Wellness ROI Inc, a nonprofit coalition of five large employers—BMW of North America, Henry Ford Health System, Kraft Foods Global Inc., MasterCard Worldwide and Schlumberger Ltd—was formed in 2005 to “standardize how wellness benefits are defined.” The group is currently developing a database of wellness records that includes health claims data and wellness program participation rates, and “’plans to launch an ROI valuation methodology for wellness programs this summer,’ according to Lillian Petty, president and founder, and former manager of employee benefits at Schlumberger, North America.”

"’We're in the world of 'what's it doing for me lately,'" Petty says of today's expanding corporate wellness strategies and the need to prove their economic value. Wellness programs can be objectively measured -- and their time has come, she adds.”

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