- Employee wellness is a $6 billion industry- but even the best workplace wellness programs struggle to be cost-effective.
- There has been some controversy in terms of whether they actually save employers money. But corporate wellness programs that put an emphasis on preventative care do see a positive return on investment.
- Workplace wellness programs can generate cost savings for the company through improved employee morale and job satisfaction (in addition to improved overall health of employees).
- To maximize a wellness program's ROI, employers should focus on preventative care (like genetic testing and counseling) for high-risk patients to be identified earlier and treated in a more impactful and cost-effective way
- Resources like Genome Medical offer customizable and scalable programs for employers.
- Visit Genome Medical’s resources page for more stories and content.
Workplace Wellness Programs That Actually Save Money
In the workplace, employers are constantly on the lookout for programs that bring value to their employees. Workplace wellness programs have become popular across all organization sizes: from small firms to large, self-insured companies.
According to the Society for Human Resource Management (SHRM), wellness programs benefit employers in multiple ways:
- Lowered health care costs
- Reduced absenteeism
- Increased employee productivity
- Reduced workers' compensation and disability-related costs
- Reduced injuries
- Improved employee morale and loyalty
The goal of these programs is to improve employee health and productivity, and potentially improve the overall cost of employer-provided health care.
When one thinks of “workplace wellness programs,” many of the following programs generally come to mind:
- Stress reduction
- Weight loss
- Smoking cessation
- Health risk assessments
- Health screenings
- Exercise programs and activities
- Nutrition education
- Vaccination clinics
Employee health benefits and wellness benefits are often interchangeable. But the subtle difference between the two can be explained this way:
Health benefits are those that are reactive. We may or may not be able to influence our health: sometimes poor health is just due to genetics. These benefits have often been included -- even expected -- as part of one’s employment compensation package.
Wellness program benefits may not be as tangible. These intrinsically motivated programs encourage lifestyle changes to improve physical health and mental well-being. Oftentimes, wellness programs are incentive-based, with the hopes that positive outcomes can improve overall health, potentially preventing costly medical procedures.
Although there certainly are health conditions that are inherited, wellness programs have the ability to lower the risk of certain conditions, too.
Because the return on investment of these programs is not as tangible as with health benefits, there has been some controversy in terms of whether they actually save employers money.
However, evidence has shown that corporate wellness programs that put an emphasis on preventative care can produce a positive return on investment.
Are Wellness Programs Effective?
When evaluating whether to move forward with either employee benefits or wellness programs, one key question that managers may consider is, “How do I measure the program’s success?” While many people understand the tangible, empirical data behind a measure like ROI, there often is also an intangible measure -- value on investment (VOI) -- that, should also be considered.
Workplace wellness programs can generate savings in the following ways:
- Cost savings for the company (ROI)
- Improved employee morale (VOI)
- Job satisfaction (VOI)
- Overall healthy employees (ROI and VOI)
VOI is a nuanced measurement that heavily emphasizes the program’s organizational performance -- for example, by delivery ancillary benefits such as decreased use of sick days, increased productivity, positivity and talent retention. Those increases have a trickle-down effect and can contribute to reduced health care costs, in that an employee’s overall mental and physical well-being are also improved.
A 2015 Willis study showed that survey respondents focused more on the value of a health management program (66%) than program cost. Respondents were also asked to rank which statement they believed was more ROI-focused versus VOI-focused.
ROI-focused organizations were evenly split between improving health and building a culture of wellness (41%) or reducing medical costs by targeting high risk/high cost individuals (41%). Conversely, VOI-focused organizations ranked improving health and building a culture of wellness more than four-times as high (75%) when compared to reducing medical costs by targeting high risk/high cost individuals (17%).
These results show that every organization’s goal should be to craft a well-rounded program that improves overall employee health (ROI and VOI) by building a culture of wellness and reduces an organization’s medical costs by targeting high risk/high cost employees.
The Truth About Wellness Programs Savings
The costs associated with wellness programs range. However, there are two major components of wellness programs: those that focus on lifestyle management and those that focus on disease management.
Programs that focus on lifestyle management (e.g., smoking cessation, weight loss, etc.) generally show less immediate results. Alternatively, programs that focus on disease management show a stronger ROI by focusing on preventing high-cost hospitalizations and ER visits.
The Centers for Disease Control and Prevention (CDC) states that “90% of the nation's $3.5 trillion in annual health care expenditures are for people with chronic and mental health conditions”. They list diseases such as heart disease, cancer, epilepsy and more as chronic diseases that have significant health and economic costs in the United States. These diseases, among others, may have a genetic component that a disease management program helps to manage.
So, Do Workplace Wellness Programs Save Employers Money?
Workplace wellness programs have proven effective in reducing health care costs for employers.
A majority of wellness programs that focus on disease management benefits both stakeholders in the workplace. They help employees manage symptoms when prevention is not possible and help employers reduce health care costs.
According to a 2018 Transamerica research report, wellness programs that target specific chronic diseases could reduce the trillion-dollar health care burden employers face. Disease management of prevalent chronic conditions such as hypertension, cardiovascular disease, etc. may potentially yield faster and larger cost savings.
Genetic counseling and appropriate ordering of corresponding genetic tests enhance wellness programs and save money by stratifying at-risk patient populations that are susceptible to those chronic conditions. These critical preventative care tools effectively maximize a wellness program’s ROI twofold: by helping employees navigate the challenging (or confusing) world of their genetic health and getting in front of diseases before they occur.
Furthermore, closely examining medical claims data in conjunction with evaluating wellness program survey results allow employers and benefits managers to holistically analyze how much cost savings employee wellness programs have created.
How Can Workplace Wellness Programs Be Improved?
Employers can use a variety of disease management strategies within their workplace wellness programs:
- Genetic testing & corresponding genetic counseling services
- Telemedicine services
- Self-management programs (e.g. meditation and relaxation workshops, appropriate use of medications, etc.)
According to Becker’s Healthcare, “Caregivers, insurers and policymakers are trying to create the programs and plans that will dramatically improve chronic patients' lives”. A wellness program that offers telegenomic services combines genetic counseling and telemedicine, bringing together modern technology and clinical care, and enabling technology to improve chronic disease management.
Employers are starting to jump on board as well.
According to a technical report by the America’s Health Insurance Plans (AHIP), nearly half of surveyed respondents were utilizing telehealth to target risk factors and promote member wellness. Furthermore, from those respondents who have implemented surveyed approaches, nearly 70% of respondents found telehealth “very useful” or “somewhat useful,” effectively showing high utility.
The Best Workplace Wellness Program for Your Employees
Genetics-based care may provide superior benefits. It allows high-risk employees to be identified earlier in hopes that they are treated in a more impactful and cost-effective way.
AHIP’s technical report showed that 76.7% of surveyed respondents listed identification and stratification of risk for illness as one of the key components of wellness programs offered directly to their members.
As a result of the implementation of these programs, survey respondents saw overwhelmingly positive outcomes.
AHIP concluded that “employers play an essential role in implementation and determining the ultimate success.” However, how can employers get to the promised land of positive outcomes (e.g., improving health risk, ROI, member participation and satisfaction, etc.)?
Researchers from the same aforementioned Transamerica study mention that consulting with a national organization or third-party expert to collect data gained from health and wellness programs would aid the likelihood of those interventions to succeed.
Third-party experts may allow employers to familiarize themselves with risk factors that contribute to chronic disease development to plan effective wellness programs.
Genome Medical is a nationwide genomics medical practice that provides access to genetic experts to guide improved health and well-being for individuals and families. To learn how Genome Medical can be a vital partner with your organization to provide a proven, customizable, scalable and effective health and wellness benefit program, visit https://www.genomemedical.com/employers/.