Work Site Health Promotion Return on Investment

Maximizing the ROI of Worksite Wellness Programs

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Larry S. Chapman MPHPresident and CEOChapman InstituteSeattle, WA 98155

(206) 364‐[email protected]

Agenda

• Potential ROI of worksite health promotion efforts• Measuring ROI to meet management expectations• Model of health care utilization• Major pathways for health cost savings• Strategies for maximizing ROI• Objections to WW and counter-arguments• Summary of main points

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© Chapman Institute, 2010. All rights reserved.

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Potential ROI of Worksite Wellness efforts


Key Terms

Economic Return: The monetary benefit (savings) associated with a program.

Return-on-investment (ROI): The monetary benefit (savings) associated with a program divided by the cost of that program expressed as a percent.

Cost/Benefit (C/B) Ratio:The monetary benefit(savings) associated with a program divided by the cost of that program expressed as an integer and/or a decimal.

Net Present Value:A commonly accepted way of estimating the time adjusted net monetary benefit(savings) associated with a program expressed as a dollar amount.

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New Meta-Analysis…

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Source: Katherine Baicker, David Cutler, and Zirui Song, Workplace Wellness Programs Can Generate Savings, HEALTH AFFAIRS February,2010, 29(2) 1-8.

C/B = 1:6.0


ROI Studies of Wellness Programs

• Bank of America• Blue Shield of CA• Duke University• Citibank• City of Birmingham• Coors• DuPont• General Foods• General Motors• GlaxoSmithKline• Indiana BCBS• Johnson & Johnson• Life Assurance• Nortel• Prudential• Travelers• Union Pacific• Washoe County

6Source: Proof Positive: An Analysis of the Cost-Effectiveness of Worksite Wellness, Chapman Institute, Sixth Edition, 2007.

Traditional

Newer Programs

OutliersC/

B Ra

tio

Study Number

C/B = 1:5.8


Other Factors

• Limited economic scope of studies

• Few programs use VBD approaches

• Few direct healthcare utilization interventions

• Few use “best practice” incentives

• Few invest in good evaluation techniques

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Measuring ROI to meet management expectations


Changing Management Expectations

• Platform for integration

• Connect to benefits• Becoming aware of

the “stakes”• Expect higher ROI• Expect measurement

validity• Expect dashboard

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Tips for Measuring ROI

#1 Define economic measures#2 Compare on “direct” only#3 Plan on “multiple” time series#4 Focus on growth rate trends#5 Use same framework each year#6 Look for other explanations#7 Match methods to expectations#8 Evaluate annually#9 Compose annual evaluation report#10 Ask for suggestions for improvement

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Model will Affect Outcomes

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Quality of Work Life Approach

Program Model

• Fun activity focus• No risk reduction• No high risk focus• Not HCM oriented• All voluntary• Site-based only• No personalization• Minimal Incentives• No spouses served• No evaluation

Morale-Oriented

Main Features

Primary Focus

Traditional Approach

• Mostly health focus• Some risk reduction• Little high risk focus• Limited HCM oriented• All voluntary• Site-based only• Weak personalization• Modest Incentives• Few spouses served• Weak evaluation

Activity-Oriented

Population Health Management

• Add productivity• Strong risk reduction• Strong high risk focus• Strong HCM oriented• Some required activity• Site and virtual both• Strongly personal• Major Incentives• Many spouses served• Rigorous evaluation

Results-Oriented

Source: Chapman, Planning Wellness, Chapman Institute, 2008, p. 213. (available on Amazon.com)


Reasonable Expectations?

Usual Outcomes:• 45% to 95% participation• 10% to 35% increase in

behavior change• 2% to 12% reduction in risk

prevalence• 17% - 28% reduction in sick

leave• 0% to 47% reduction in per

capita health costs• 15% to 25% reduction in per

capita health cost trends• ROI = 1:1.7 to 1:7.4

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Model of health care utilization


Factors that Healthcare Utilization

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Supply-Side Factors (outside the individual)

Extent and scope of insurance coverage*

Point-of-use cost sharing*

Geographic access to services

Supply-Side Factors (outside the individual)

Regional or local practice patterns

Provider incentives affecting diagnosis and treatment decisions*

Demand-Side Factors (inside the individual)

Age*

Sense of responsibility for personal

health*

Clinical risk factors*

Current morbidity*

Self-efficacy*

Gender

Personal health

behavior*

Attitudes about

personal health and

health care use*

* = Potentially modifiable.

Source: L. Chapman, 2008


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Major pathways for health cost savings


Pathways to Health Cost Savings

• High risk intervention• Medical self-care• Consumer health skills• Early detection• Risk reduction• Targeted follow-up• Disease/condition management• Injury prevention• Treatment decision support• Point-of-use cost sharing• Comparative price information• Comparative provider information• Avoiding iatrogenic risk


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Strategies for maximizing ROI


Key Strategies for Increasing ROI

#1 Expand economic measures#2 Enhance risk reduction/mitigation#3 Move to PHM program model#4 Include spouses#5 Require an annual HRA#6 Target benefit communications#7 Provide medical self-care and

Consumer health education#8 Address injury prevention#9 Use coaching intervention#10 Use multiple Wellness criteria

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Source: Chapman, L., Health Cost Management Strategies for Health Promotion Programs, TAHP, 2002, Jan/Feb 5(6), p. 12.


Key Strategies for Program Effectiveness

• Ongoing methods for raising awareness

• Ability to enhance motivation

• Opportunity to learn new skillsassociated with new behavior

• Opportunity to practice those new behavioral skills

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Source: O’Donnell, M., A Simple Framework to Describe What Works Best: Improving Awareness, Enhancing Motivation, Building Skills and Providing Opportunity, The Art of Health Promotion, American Journal of Health Promotion, September/October, 2005, 20(1):1-12


Issues Effecting Wellness Program ROI

“Situation-related” Issues• High risk prevalence• Older work force• Turnover profile• Greater occupational risks• Measurement methods used• Economic variables measured• Quality of baseline• Intensity of intervention• “Generosity” of health plan• Years of operation• Attitudes of employees• Extent of reach to spouses• Capital investment level• Balance of virtual vs. site-based

“Implementation-related” Issues• Behavioral targets selected• Program interventions used• Number of “touches”• Quality of implementation efforts• Plan design compatibility• Degree of HCM focus• Incentives used• Senior management support• Degree of integration


Use of a “Virtual” Program Infrastructure

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Before After

Unified Administrative

Structure

Regular Staff Planning Meetings

Periodic Function and Operational

Review

Prospective Integration

Points

Integration Focused Review

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Wellness Should be Well Integrated

Management Strategies


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Objections to WW and counter-arguments


Worksite Wellness

“Objections”• Too much work• Don’t have the money

• ROI not guaranteed

• Its not our core business

• We are too busy

“Counters”• Depends…• How much are you spending?• How much will you be pending?• PL 111-148?• What is?• Do nothing and it will get worse!• Aren’t people part of your core

business?• Are your competitors too busy?

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Summary of Key Points


Summary of Key Points

• Wellness is not “rocket science!”• Wellness just needs the same level of attention that

anything else of value deserves• You need to spend money to make money• There are a variety of ways that the economic return

from Wellness programs can be increased• Determine what you want from Wellness and then do

your homework• Get ready to have fun!

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Larry S. Chapman MPH(206) [email protected]


Education

Work Site Health Promotion Return on Investment