ighmark Inc., a Pittsburgh-based
health insurer, plunged into a comprehensive wellness program for its own employees
in 2002 and studied medical claims of two sets of participants for four years.
Using a sophisticated approach that tracked medical
claims data and employees’ own health risk assessments, it saw a $1.65 return on
investment—a total of $1.3 million over four years—for every $1 it spent on corporate
wellness, according to a February article in the Journal of Occupational & Environmental
Medicine.
Dr. Brian Day, Highmark’s director of advanced analysis,
who helped oversee the study, acknowledged that the research had limits. According
to the report, participation bias is among the study’s possible flaws, in that wellness
program participants may have been more motivated to manage their health than nonparticipants.
The study also found some employees may have participated in wellness activities
outside the workplace program.
The limitations of Highmark’s study reveal another flaw
in employers’ efforts to calculate return on investment. The "worried well" is a
term touted by consultants to describe the employee group most likely to participate
in a wellness program: those who are healthy.
People who are healthy also are more likely to participate
in employer-sponsored health risk assessments, another major tool used by employers
to estimate ROI.
Health assessments come in many forms and often include
biometric screenings, such as weight and cholesterol readings, and employee questionnaires
that aim to reveal risky behaviors. Even with an incentive such as cash or a reduced
health insurance premium, experts again say the least healthy employees also are
less likely to participate.
For St. Luke’s Health System, based in Kansas City,
Missouri, health risk appraisals track employees’ medical risks and health problems,
says Gayle O’Connell, the hospital system’s health enhancement program manager.
The appraisals, which included questionnaires covering
exercise habits and stress management, were used to calculate how much the hospital
system avoided in medical costs with its wellness program, which cost $250,000 per
year.
From 2001 to 2003, the hospital system avoided spending
$8.50 in medical costs for every $1 it spent on wellness; from 2003 to 2005, the
savings figure was $3.50, O’Connell says.
While acknowledging that the system is not the most
accurate way to calculate savings, O’Connell says it did allow the hospital system
to track how employees changed behavior and how those changes helped the hospital
system avoid higher medical costs.
This popular way of calculating possible ROI fails to
track whether the wellness program caused the reduced health risk, says Mike Miele,
president of Apex Management Group, a Princeton, New Jersey-based employee benefits
consulting and insurance services unit of Gallagher Benefits Services Inc.
"This main method that people do is cohort tracking,"
he says. "They say, ‘We surveyed 3,000 people and 1,000 people were high-risk and
600 people actually talked to us, and we monitored them, and we tracked their costs
over time and it got better, so it’s working,’ " he says. "The problem is there
are a lot of statistical errors in that approach. Maybe those people were getting
better anyway."
Workforce Management Online, May 2008
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