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WELCOA's A Pub li c ati o n o f th e We lln e ss Co un cil o f A m er i c a Expect What You Can De-Mystifying ROI For more interviews, visit www.welcoa.org Wellness Programs From Workplace

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Page 1: De-Mystifying ROI

WELCOA's

A P u b l i c a t i o n o f t h e W e l l n e s s C o u n c i l o f A m e r i c a

ExpectWhat You Can

De-Mystifying

ROI

For more interviews, visit www.welcoa.org

Wellness Programs

From Workplace

Page 2: De-Mystifying ROI

WELCOA's

About David HunnicuttSince his arrival at WELCOA in 1995, David Hunnicutt has interviewed hundreds of the most influential business and health leaders in America. Known for his ability to make complex issues easier to understand, David has a proven track record of asking the right questions and getting straight answers. As a result of his efforts, David’s expert interviews have been

widely-published and read by workplace wellness practitioners across the country.

David Hunnicutt can be reached at [email protected].

About Ron GoetzelDr. Ron Goetzel is the Director of the Emory University Institute for Health and Productivity Studies and Vice President of Consulting and Applied Research for Thomson Reuters. Dr. Goetzel is responsible for leading innovative research projects and consulting services for health care purchaser, managed care, government, and pharmaceutical clients

interested in conducting cutting-edge research focused on the relationship between health and well-being, and work-related productivity. He is a nationally-recognized and widely published expert in health and productivity management (HPM), return-on-investment (ROI), program evaluation, and outcomes research.

An Expert Interview with

Dr. Ron Goetzel

Page 3: De-Mystifying ROI

W E L C O A N E W S & V I E W S

www.welcoa.org 3

In this exclusive WELCOA Expert Interview, Dr. David Hunnicutt talks with Dr. Ron Goetzel to get a pulse on health promotion trends and the latest Return-On-Investment (ROI) research in the

field. Dr. Goetzel highlights the ROI that companies can expect from a comprehensive worksite wellness program and offers tips on how to get there. As one of the top experts in the field of worksite wellness ROI, Dr. Goetzel shares key strategies, rules for success, and his insights about future ROI trends.

David Hunnicutt: Based on what you know about the latest research, what kind of ROI can an employer expect from a well-designed, comprehensive workplace wellness program?

Ron Goetzel: There was a literature review published recently in Health Affairs by three highly respected Harvard economists: Katherine Baicker, David Cutler and Zirui Song. These academics were not previously involved in worksite health promotion research, so they were looking at the worksite literature with fresh eyes and without bias. Their literature review identified studies that used good methods in calculating return on investment. In their analysis, they concluded that there is an average ROI of about 3:1 from worksite health promotion programs over a three-year time horizon. That is, $3 was saved for every $1 invested for both medical care costs and absenteeism. It’s worth mentioning that several of the studies they reviewed go back many years, and the ROI methods that were used back then may not have been the most elegant or rigorous. So, I think a more realistic ROI estimate is probably in the neighborhood of 2:1 as opposed to 3:1.

It’s also important to note that oftentimes an employer’s costs will actually increase in the first year after the program is introduced and sometimes even during the second year simply because people are learning that they are at high risk and consequently they seek medical care, which can result in higher costs in the short term.

A final note that when you hear of ROI claims of 4:1, 5:1, 17:1 and so forth, you need to be very skeptical of those claims.

Preventive Screening Guidelines Are Available

The U.S. Preventive Services Task

Force provides recommendations

for preventive screenings that

your employees should get on a

regular basis. Practitioners should

follow these guidelines to help

their employees keep track of

measurements such as weight,

blood pressure and cholesterol

levels—and how frequently each

screening should be done.

Visit:www.uspreventiveservicestaskforce.org

Page 4: De-Mystifying ROI

4 ©2012 Wellness Council of America

W E L C O A N E W S & V I E W S

DH: Are there specific programs that are more likely to generate ROI than others, and if so, what might they be?

RG: In general, a comprehensive, multi-component program is more likely to generate a positive ROI than a risk-specific program. If you only focus on decreasing smoking rates or obesity among workers, for example, you’re less likely to have a positive health and cost impact on the population as a whole. Some people are left out. The most successful programs adopt and apply best practices, and there are now more articles that identify those best and promising practices. So it’s ultimately a combination of linked program components that produce a positive ROI, assuming they are well implemented. In terms of which specific element is more important than another—right now, we don’t have enough research to tell us that.

DH: What would you say to employers and practitioners who are under pressure to generate ROI as quickly as possible within their workplace wellness programs?

RG: I would start by saying you’re probably not going to get a quick ROI. You will likely get an ROI if you’re at it long enough and patient, but it may take years to achieve. If you want a very quick ROI, you should focus on modifying your medical benefits plan and your reimbursement structures. You can do a better job of managing the care delivery system by reducing unnecessary care, waste, and abuse. Also, you can reward providers for delivering high quality care efficiently and at a lower cost. Those are the quick ways of achieving savings. But to get people to behave differently and to adopt a healthier lifestyle takes time. That’s why it’s very important to establish timelines and agreements with your senior leadership. You must all agree on a long-term but realistic time horizon, and that usually means three to five years.

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In general, a comprehensive, multi-component program is more likely to generate a positive ROI than a risk-specific program.

WELCOA Members Get Free Incentive Campaigns

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Page 5: De-Mystifying ROI

W E L C O A N E W S & V I E W S

www.welcoa.org 5

DH: When you think about calculating ROI, most of the emphasis in terms of the literature has focused on health care costs and absenteeism. How important from your perspective is productivity and presenteeism to the ROI equation?

RG: I think productivity impacts are very important. Presenteeism, which is not performing at an optimal level, is a major factor contributing to an organization’s competitiveness. However, the problem with productivity and presenteeism is that they are hard to measure. Most employers have very poor measures of productivity and they have difficulty getting their arms around those measures.

When there are clear measures of productivity, like how many insurance claims can be processed in an hour, or how many telephone calls a call center employee can answer—those straightforward measures have actually been correlated to presenteeism survey responses. But convincing employers that you’ve actually captured productivity and presenteeism in these instruments and that you’ve translated that into dollars is still an uphill battle.

WELCOA Offers Premier Webinars

WELCOA offers a dynamic webi-

nar and certification series—with

exciting topics to help you build

and sustain results-oriented

wellness programs. Each session

is conducted by a workplace

wellness expert and the webinar

format allows you to gain cutting-

edge knowledge—without leav-

ing your office!

Check out WELCOA’s webinar schedule at: www.welcoa.org/consulttrain/about.php

Reading a copy? Download the original article at:

http://www.welcoa.org/freeresources/index.php?category=16

I think productivity impacts are very important. Presenteeism, which is not performing at an optimal level, is a major factor contributing to an organization’s competitiveness.

www.welcoa.org

Log on to the nation's premier website for workplace wellness!

Page 6: De-Mystifying ROI

6 ©2012 Wellness Council of America

W E L C O A N E W S & V I E W S

DH: You were a part of the landmark HERO study. Can you provide a review of that study and its findings as well as any updates that have occurred since it was originally published?

RG: The original HERO study put a dollar value on 10 common, modifiable health risks, such as smoking, obesity, high blood pressure and high glucose. The study parsed out the individual risk factors and also determined how much money these risk factors cost when combined. This allowed practitioners and employers to quantify the dollar value of certain risk factors. It also enabled them to predict what might happen if they were able to effectively reduce those risk factors. The study was published in 1998 and included data on over 46,000 employees. It’s still a reference point for a lot of programs. Since the HERO study, several other studies have looked at the ability of worksite wellness programs to reduce health risks within the employee population. Many ROI studies since the HERO study have posited that you can indeed save money from these programs. And in 2010, the American Journal of Preventive Medicine reviewed the work of the CDC Community Guide Task Force and concluded that worksite programs can positively impact specific behavioral and biometric risk factors in an employee population.

Recently, we have replicated the HERO study using more contemporaneous health risk and cost data for over 90,000 employees. We’re now in the process of publishing those findings.

Health risk appraisals are really the gold standard for being able to tell whether the program is having an impact on health and risks.

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WELCOA’s eStore Has The Resources You Need For Employee Wellness!

WELCOA offers the best selec-

tion of colorful, easy-to-read

employee resources and well-

ness products. Browse our lead-

ing wellness products including

brochures, lifestyle guides, books

and much, much more—all in

one convenient location!

Shop WELCOA’s eStore – visit:www.welcoa.org/store

Page 7: De-Mystifying ROI

www.welcoa.org 7

W E L C O A N E W S & V I E W S

DH: How important are health risk appraisals to the ROI equation?

RG: Health risk appraisals provide you the data needed to measure if you’ve been successful in improving health and reducing risks. So, health risk appraisals are really the gold standard for being able to tell whether the program is having an impact on health and risks. We recently published a study in the January 2011 issue of The Journal of Occupational Environmental Medicine that looked at the Johnson & Johnson employee population. The study looked at what happened when employee risk factors changed, and it primarily focused on obesity. We looked at employees who changed from being obese to not obese and vice versa. We found that if employees are able to move in either direction, it had an impact on cost. As you might expect, people who became obese also became more expensive while people who moved from being obese to non-obese became less expensive. Essentially, what that study shows is that there is a direct-line relationship between changes in risk and changes in cost, at least for weight risk. So, an important way to achieve cost savings and ROI is to monitor progress in the health risk profile of the employee population.

DH: If you’re going to do a health risk appraisal, how important is it to have health screening coupled along with that process?

RG: Well, let me first say that the screenings should follow the guidelines put forth by the U.S. Preventive Services Task Force. The USPSTF provides evidence-based recommendations for clinical preventive screenings conducted during routine doctors’ visits, such as having your weight and blood pressure measured every time you come into the doctor’s office. They also provide recommendations for what should be done at more infrequent intervals. For example, they recommend that cholesterol testing be done every five years for people who are otherwise healthy.

Reading a copy? Download the original article at:

http://www.welcoa.org/freeresources/index.php?category=16

If you’re launching a new program and you want to spark excitement, participation and engagement, it’s generally a good idea to include screenings as part of the program kickoff for a variety of reasons.

You Can Become A WELCOA Faculty Member

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you take part in four or more of

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Check out WELCOA’s certifica-tion schedule today! Visit: www.welcoa.org/consulttrain/certifications.php

Learn more about WELCOA Membership at: www.welcoa.org/member/benefits.php

Page 8: De-Mystifying ROI

8 ©2012 Wellness Council of America

W E L C O A N E W S & V I E W S

Practitioners should know and follow those guidelines. Having said that, if you’re launching a new program and you want to spark excitement, participation and engagement, it’s generally a good idea to include screenings as part of the program kickoff for a variety of reasons. Number one, you collect critical objective biometric data like cholesterol, glucose and blood pressure values. Moreover, people want to know what their numbers are; they want to know if they’re within normal range or not, and if not, what they should do about it. And then finally, a large proportion of the population has no clue as to what their biometric values are. So, providing them with a screening, at least at the launch of a new intervention program, makes a lot of sense.

DH: When we look at the idea of implementing a comprehensive wellness program, if an employer does that—and they follow the best practices guidelines and are very careful on the design and the implementation of it—how confident can an employer be that if they do that they’ll indeed generate an ROI over time?

RG: I think one of the most important and magical ingredients leading to the success of worksite programs is senior management commitment to employee health and well-being and the communication of that commitment to workers. So, you can imagine two different workplaces: one where the employer recruits a vendor and

says, “Go ahead, change them, fix them, and make them better, because I don’t like them the way they are today. Oh, and don’t ask for any

help from me.” Versus a different scenario where the employer says, “I’m going to do everything I can to make you successful. I’m going to be out there announcing the program. I’m going to communicate about the program. I’m going to participate

in the program. I’m going to ask my managers to support their workers in becoming involved in that program.

I’m going to set goals for success. I’m going to provide feedback to all of the key people involved. And I’m going to make this very,

very positive and non-punitive.”

I think one of the most important and magical ingredients leading to the success of worksite programs is senior management commitment to employee health.

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Over 5,000 US Companies Are WELCOA Members

WELCOA’s member benefits in-

clude the tools, information and

resources you need to build effec-

tive, results-oriented wellness

programs— programs that help

you better contain costs, improve

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See what the WELCOA Nation is all about—visit: www.welcoa.org/member/benefits.php

Page 9: De-Mystifying ROI

W E L C O A N E W S & V I E W S

www.welcoa.org 9

Those two scenarios are in sharp contrast to one another. And what I’m highlighting here is the important role that the employer plays in achieving positive outcomes and a positive ROI. If the employer is committed to the second scenario I just described, there is a much, much greater likelihood of achieving cost savings and a positive ROI.

DH: How much does an employer need to invest per employee to really be confident that they should see some type of return on investment?

RG: The last time you and I talked about this over a year ago, I said somewhere around $150 per employee per year. Today, I think it’s somewhere between $200 to $500 per employee per year. Now, I’ve seen programs that invest less than that, and I’ve seen programs that invest a lot more. But I think that’s probably about the appropriate ballpark that employers should consider within the context of their total health care spending as well as the productivity impacts of poor health.

DH: What’s your view on cost calculators, and can they be useful to employers?

RG: I think they can be. I think they are useful simply because they’re a relatively easy way of projecting your potential return on investment. For example, the obesity cost calculator located on the CDC website called LeanWorks—as well as the cost calculator on WELCOA’s site—can be very helpful. There are also proprietary ROI calculators. In fact, Thomson Reuters has an ROI calculator based upon the HERO data. For a Chief Financial Officer (CFO) or Chief Executive Officer (CEO) of an organization, these calculators can help answer the question: What kind of health improvement should we expect and how do those improvements translate to cost savings? So these kinds of desktop cost calculators can be useful in those situations. Reading a copy?

Download the original article at:http://www.welcoa.org/freeresources/

index.php?category=16

The Well Workplace Model Offers Results

The ultimate goal of WELCOA

membership is to help you suc-

cessfully design and implement

results-oriented wellness pro-

grams. Using the proven WEL-

COA Well Workplace Model and

patented Seven Benchmarks ap-

proach, your organization will get

an inside track to becoming one of

America’s Healthiest Companies.

Read more about WELCOA’s approach at: www.welcoa.org/wellworkplace

Page 10: De-Mystifying ROI

WELCOA Created The First Social-Networking Site For Workplace Wellness

SWELL—a social networking sys-

tem for the WELCOA Nation—is a

new member benefit for 2012!

Learn from the collective wisdom

of the WELCOA Nation when you

connect and share with other

WELCOA members. SWELL is a tool

that puts practitioners, profession-

als and organizations in touch—to

share their questions, challenges

and secrets for success.

Join WELCOA to ride the wave with SWELL—Visit: www.welcoa.org

10 ©2012 Wellness Council of America

W E L C O A N E W S & V I E W S

Reduce Unnecessary Health Care Use…You will likely get an ROI if you’re at it long enough and patient, but it may take years to achieve. If you want a very quick ROI, you should focus on modifying your medical benefits plan and your reimbursement structures. You can do a better job of managing the care delivery system by reducing unnecessary care, waste, and abuse. PAGE 4

Worksite Wellness Positively Impacts Risk Factors…Many ROI studies since the HERO study have posited that you can indeed save money from these programs. And in 2010, the American Journal of Preventive Medicine reviewed the work of the CDC Community Guide Task Force and concluded that worksite programs can positively impact specific behavioral and biometric risk factors in an employee population. PAGE 6

People Want To Know Their Numbers…If you’re launching a new program and you want to spark excitement, participation and engagement, it’s generally a good idea to include screenings as part of the program kickoff for a variety of reasons. Number one, you collect critical objective biometric data like cholesterol, glucose and blood pressure values. Moreover, people want to know what their numbers are; they want to know if they’re within normal range or not, and if not, what they should do about it. PAGE 8

The Importance Of Senior Level Support…I think one of the most important and magical ingredients leading to the success of worksite programs is senior management commitment to employee health and well-being and the communication of that commitment to workers. PAGE 8

Value Of Investment…The value that an organization may get from a health promotion program can include being viewed as caring about employees, being an employer of choice, and perhaps being deemed as one of the healthiest companies in the community. Those kinds of indicators are perhaps as important as a financial return on investment. PAGE 11

from Ron Goetzel

A T - A - G L A N C E S U M M A R Y

Notable &Quotable

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Page 11: De-Mystifying ROI

www.welcoa.org 11

W E L C O A N E W S & V I E W S

DH: Are there new developments on the horizon concerning ROI? What do you see happening in the next 5-10 years on this topic?

RG: Well, ROI certainly continues to be an important issue, but I’m also hearing quite a bit of discussion about VOI, or the value of the investment. So, the value that an organization may get from a health promotion program can include being viewed as caring about employees, being an employer of choice, and perhaps being deemed as one of the healthiest companies in the community. Those kinds of indicators are perhaps as important as a financial return on investment.

So, with that in mind, I think employers really need to evaluate what they want to achieve from health promotion programs. Is it simply, “I want to get money back like a mutual fund investment portfolio. I’m going to put $100 in and get $300 back in a couple of years.” Is that the only reason and purpose you’re doing these programs, or is there a broader purpose? I think that kind of discussion is important to have, not to minimize the importance of using your money efficiently and in a way that provides value to the organization. However, I think the more sophisticated employers, the more forward-leaning employers, are also the ones who are looking beyond pure dollar savings.

WELCOA Membership Is Just $1 A Day

Join the Nation’s premier re-

source for workplace wellness

and you’ll get all the training and

resources you need to build a suc-

cessful, results-oriented work-

place wellness program and im-

prove employee health!

Become a WELCOA member today! Visit:www.welcoa.org/member/benefits.php

about Madeline Jahn mol

Madeline Jahn is the Director of Communications for the Wellness

Council of America. Her role is to coordinate the develop-ment of new publications and pool existing resources for WELCOA members, serving the mission of health promo-tion through marketing and planning support. She has a Master’s Degree in Organizational Leadership from the College of Saint Mary. For questions about this publication, or to obtain permission for reprinting, please contact Maddy at [email protected].

Page 12: De-Mystifying ROI

WEBINARS

12 ©2012 Wellness Council of America

APRILTitle: 10 Simple Solutions to Stress: How to Help Your

Employees Tame Tension and Stress In The WorkplaceDate: Thursday, April 26 Time: 9:30 - 11:00 AM Central Time

JUNETitle: Bonus Webinar: EconoHealth ROI: A Revolutionary

Way To Calculate ROI and Establish Strategic Priorities For Your Organization’s Wellness Initiative

Date: Thursday, June 28Time: 9:30 - 11:00 AM Central Time

JULYTitle: The Anatomy Of A Business Plan: A Step-By-Step

Guide To Developing A Great Wellness Operating Plan That Will Improve Employee Health And Change Your Company’s Culture

Date: Thursday, July 26Time: 9:30 - 11:00 AM Central Time

”“…it is comforting to know that…WELCOA exists, and that they are pushing us in the right direction. ”

“WELCOA offers valuable information that is greatly appreciated.

WELCOA 2012 Webinar SeriesWe are pleased to announce our dynamic 2012 WELCOA Webinar Series. This year, we are focusing on a number of exciting topics that will help you in your quest to build and sustain a results-oriented wellness program. Each Webinar is

*The Webinar series is free to WELCOA members. If you are a current WELCOA member and would like to register, please visit http://infopoint.welcoa.org/.

If you’re not a WELCOA member, you should be! Visit: http://www.welcoa.org/member/benefits.php

JANUARYTitle: An Examination Of The Health Habits of

Americans: Who’s Doing What And What It’s Going To Take To Change The Way We Do Business in America

Registrationfor this webinar is now closed.

FEBRUARY Title: Creating A Culture of Health: Breakthrough

Strategies To Change The Way Your Organization Does Business

Date: Thursday, February 23 Time: 9:30 – 11:00 AM Central

MARCHTitle: Bonus Webinar: Introducing SWELL: Harnessing

Social Media To Improve Your Health and Wellness Programs

Date: Thursday, March 1 Time: 9:30 - 11:00 AM Central Time

OCTOBERTitle: Fitness That Works: Simple Moves To Make

Exercise Happen Between 9 And 5Date: Thursday, October 25Time: 9:30 - 11:00 AM Central Time

NOVEMBERTitle: Evaluating Health And Wellness Programs: A

Practical Approach To Determining The Impact Of Your Programming Efforts

Date: Thursday, November 29Time: 9:30 - 11:00 AM Central Time

conducted by a nationally-recognized expert in the field of workplace wellness. And perhaps best of all, each session is offered in a Webinar format which allows you to access the information without having to leave your office.

U pCOm I n g TR AI n I n g E vE nTS

Become a WELCOA member for only $365/yr and attend all these webinars for free!

CLOSED

Page 13: De-Mystifying ROI

CERTIFICATION

www.welcoa.org 13”

WELCOA 2012 CertificationOpportunitiesWELCOA has certified more than a thousand of the best and bright-est health and business leaders in the U.S. through its comprehensive and

*To learn more about the certification series, be sure to visit http://www.welcoa.org/consulttrain/certifications.php.

To become a WELCOA member simply visit http://www.welcoa.org/store/product-landing/membership.

JANUARYTitle: Well Workplace University—Building A Results-

Oriented Workplace Wellness Program Using WELCOA’s Seven Benchmarks

Registrationfor this certification is now closed.

MARCHTitle: Well Workplace University—Linking Wellness

Initiatives To Employee Benefit Design: The Missing Link In Creating Best-In-Class Wellness Programs

Dates:Wednesdays 3/7, 3/14, 3/21, 3/28Time: 9:30 - 11:00 AM Central Time

MAYTitle: Well Workplace University—The Art And Science

Of Changing Unhealthy BehaviorsDates:Wednesdays 5/9, 5/16, 5/23, 5/30Time: 9:30 - 11:00 AM Central Time

dynamic online courses. Here are the opportunities now available for 2012—all certification opportunities are FREE to WELCOA members.

U pCOm I n g CE RTI fI C ATI O n E vE nTS

Become a WELCOA member for only $365/yr and attend all these webinars. These webinars are open only to WELCOA members

AUGUSTTitle: Well Workplace University—How To Effectively

Utilize Health Coaching To Improve Employee Health

Dates:Wednesdays 8/8, 8/15, 8/22, 8/29Time: 9:30 - 11:00 AM Central Time

OCTOBERTitle: Well Workplace University—How To

Demonstrate A Return-On-InvestmentDates:Wednesdays 10/10, 10/17, 10/24, 10/31Time: 9:30 - 11:00 AM Central TimeCLOSED

Page 14: De-Mystifying ROI

Wellness Council of America [WELCOA]

17002 Marcy Street, Suite 140

Omaha, NE 68118-2933

Phone: 402.827.3590 | Fax: 402.827.3594

www.welcoa.org