Benefits Administration

Wellness Programs: The Truth about ROI

If implemented correctly, wellness programs clearly provide excellent benefits to all employees. Lifestyle management incentives can positively impact a workers physical and mental health- leading to increased productivity and decreased sick days. Changing the culture of your company to better manage diet, exercise and lifestyle will certainly elevate the overall health of the work place. However if you're more concerned with lowering claim costs there is another type of wellness program that trumps them all.

According to a recent Rand study, Do Workplace Wellness Programs Save Employers Money? lifestyle programs don't offer the best return on investment. Instead programs that focus on at-risk and chronically ill employees are likely to decrease claims. When compared to lifestyle management programs, disease management delivered 86% of health care cost savings, generating $136 in savings per person, per month and a 30% reduction in hospital admissions according to the study.

At-risk employees suffer from factors such as obesity, blood pressure, diabetes, and depression, which can lead to costly and persistent health claims. Health risk assessments are a great way of identifying at risk people. Once identified it's in your best interest to encourage and support employees to take part in customized health programs that will improve their overall health and prevent them from falling chronically ill.

If you're driven by dollar savings and a concrete ROI, focus on your chronically ill employees. Diabetes, heart disease and cancer are the types of pervasive diseases that can destroy both your employee and your claims budget. In fact, they typically account for 50% of a company's claim expenses. If you can implement disease management programs that ensure your chronic needs employees get appropriate care then you can drastically reduce insurance premiums. Not to mention offering a better quality of life for employees who are living through the unbearable.

Health advocacy at this level can help ensure that chronic needs employees understand the process of their higher healthcare programs and don't risk unnecessary lapses in treatment because of confusion about the system. Health advocates have a wide breadth of knowledge about the system and can often provide much needed education in the treatment programs and processes for chronic diseases and illnesses that are common in the United States.

Perhaps one of the main lessons to be taken from these studies are that employers should have a clear purpose for their wellness program(s). If you're looking to improve overall employee health and productivity, a lifestyle centered program is a fantastic way to do it. You might not initially see as many financial savings but creating a healthier culture in your company has fantastic long term benefits for all involved. If you're seeking an ROI on your wellness programs you should target those employees who already have chronic diseases with health advocacy. In the end, there's also no harm in doing both to watch productivity rise as health care costs fall.

Understanding your company's readiness for health advocacy starts with insights into your health claims performance. Lumity's data technology and employer insights can help you understand your insurance claims and decide if health advocacy is right for your company.

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