A recent RAND Study, Do Workplace Wellness Programs Make Employees Healthy, examined ten years of data from a Fortune 100 employer’s wellness program. When compared against the lifestyle management component, disease management (which usually focuses on chronic illness) delivered 86 percent of the hard healthcare cost-savings, generating $136 in savings per member, per month, and a 30 percent reduction in hospital admissions. At-risk employees suffer from factors such as overweight, blood pressure, diabetes, and depression, which can lead to costly (and avoidable) health claims. At-risks should be identified through personal health assessments and biometric testing and encouraged (not coerced) to participate in personalized care management programs to minimize their chances of becoming chronically ill, together with family support.
While keeping at-risks healthy is critical, the shorter term workplace wellness ROI lies with the chronically ill who suffer from costly conditions like advanced diabetes, heart conditions, and cancer. In a typical population, they consume at least 50% of a company’s claims expense, and that is the focus that can make or break your claims ROI.
Enrolling the chronically ill in disease management programs that ensure they get appropriate care at the right time has the most potential to lower insurance premiums. For example, a program that preempts twenty-five unnecessary emergency department visits can easily save $50,000, and preventing four inpatient stays can save at least $100,000, which is not unrealistic for a 2,000 employee company.
Space does not permit an extended review of how to implement such an approach, but suffice it to say that employee buy-in is key. However, employers must first realize that they cannot “make” employees live healthier lifestyles. Incentives have a place, but they can’t single-handedly incent long-term lifestyle change. Wellness is not something that is “done” by someone. And penalties are more likely to actually hurt morale, particularly when viewed as a stealth form of shifting more costs onto employees. Penalties simply do not facilitate a supportive workplace environment, much less long-term wellness. The key here is a long-term change.
For all of this to work, employees must trust the program and the employer’s motives, which requires visible CEO leadership. Transparency is key, and employers should open the books, showing employees the true cost of healthcare coverage borne by the employer, how those numbers have changed, and the projected trajectory in the future absent change. The day has come for the resetting of the employer/employee health compact, and leadership is needed to do so.
Given the absence of other alternatives, it’s time to correct course and double down on workplace wellbeing. It is absolutely clear that when done right, workplace wellbeing offers both near and long-term financial and competitive returns and provides an alternative to the toxic, zero-sum game of reducing health coverage and increasing employee insurance costs. This is an opportunity that cannot be missed.
