Do Corporate Wellness Programs Really Work?

Obesity is costing US businesses $74 billion a year in missed work days and lost productivity. Each body mass index (BMI) point above normal weight costs $194-$222 per year per employee.

Should these statistics matter to managers?

When you put it that way, calculating the ROI of your wellness programs pays off. Wellness programs in the U.S. are no longer a “nice extra”, but a strategic imperative. Companies are using wellness programs to chip away at their rising health care costs. Costs which are rise with the age and weight of the workforce.

But all wellness programs are not created equal. In fact, the verdict is that most don’t work out well, at all.

Read on to learn more.

Corporate Wellness Programs ROI

Research demonstrates the connection between lifestyle and most common and expensive health problems. Obesity, diabetes, circulatory issues, and more are all connected to daily choices.

More than half of Americans are not active enough to realize health benefits. 25% of adults report no leisure-time activity. Corporate programs try to promote activities to reduce health risks and healthcare costs.

Companies have been trying to prove up on their investments for years. Johnson & Johnson estimated that their programs saved the company $250 million. From 2002 to 2008, the return was $2.71 for every dollar spent on corporate wellness.

Lee County Schools estimated that one component of their program saved them $132,108. They used an academic formula from a 2012 study to justify their expense.

Breaking Down the Data

RAND Corporation’s study indicates that wellness programs had little effect on costs. They examined a decade’s worth of healthcare data. Most studied components of the programs examined had negative ROI.

Most corporate programs focus on two components: disease management and lifestyle management. Each dollar spent on these types of programs results in $1.50 in healthcare savings.

Disease management focuses on improving outcomes for people already suffering from chronic illness. An example is a referral to complementary alternative therapies. Other activities are reminders to take prescribed medications or to attend appointments.

These types of interventions generated $3.80 in savings per $1 invested. Only 13% of participating employees need chronic disease management services. But that small group represents 87% of the savings generated.

Lifestyle management aims to prevent disease. Things like physical activity programs, diet counseling, and smoking cessation are part of the mix. More than 80% of the programs participants use these kinds of interventions. Every dollar spent only generates $.50 of savings, however. Preventive interventions can save money, but only if the risk is high in relation to the cost of the program.

Maximizing Returns with Functional Medicine

Dollars spent on improving outcomes for chronic conditions provide the largest return. It makes sense to address chronic condition support as a first priority to maximize ROI. The second priority is lifestyle intervention for the highest risk health threats.

The highest risk threats to overall health are obesity, smoking, and inactivity. Low-cost interventions to these lifestyle behaviors are likely to have the best ROI.

Functional medicine treats the body as one integrated system. It looks to conventional and alternative therapies for holistic healing and health. Unlike conventional Western medicine, an illness is not individual symptoms and body parts. This “worldview” of symptoms and care can greatly improve patient compliance with treatment.

For participants making lifestyle changes, functional medicine offers support for disease prevention. Instead of looking to prevent disease, the focus is on optimizing the body’s systems. Overall, functional medicine asks “why is the body not functioning optimally?” and then seeks to make a correction of the system, not just a symptom.

This holistic approach works for higher cost/higher benefit interventions. It works well for the minimal interventions needed to maintain good health. No company can really afford to make low-return investments in employee health.

A smart strategic plan includes integrated care for employees suffering from chronic conditions. It also includes activities to engage healthier employees.

What If ROI Is the Wrong Measure?

The goal of most health programs is to lower health costs for the employer. Participation in a wellness program didn’t result in better outcomes or lower costs. At least it didn’t in the studied Fortune 500 company.

It’s because employees most likely to take advantage of corporate wellness are already healthy. This group is already unlikely to require costly hospitalizations. They don’t generally suffer from chronic diseases either.

Only a small number of program participants generate the largest amount of savings. Focus on that small target delivers results, but the actual number of people diverted from high-cost care is small.

Most ROI analyses focus on hard-dollar returns: money invested versus money saved. Overlooked is the potential to build employee engagement. ROI also ignores the value added to an organization’s culture. Engaged employees have reduced turnover, higher productivity and higher satisfaction with their work.

Show How Much You Care for the Whole Employee

View wellness programs as an investment in human capital. Workplace health programs are a tool to attract, hire and retain quality talent. If you drive wellness as a collaborative, team effort, you reinforce your company’s culture of teamwork.

Choose a functional medicine provider as part of your workplace wellness team for flexibility. You will be able to offer your company tailored, effective and cost-conscious health interventions.

So back to the example of obesity, you couldn’t say that a weight loss program reduced company healthcare costs by X amount. But what you can say is that your employee got to work with teammates in a fun office weight challenge. Your employee felt valued because the company cared enough to provide a holistic care program. You can even say your employee feels that management supports them.

There’s no quantifiable evidence of benefit, unfortunately. Proof of value comes from the employees themselves. People were more likely to say that their manager or their employer cared about their health and safety. And that has great value itself.

For more information about a functional medicine provider for your organization, contact us today.

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