Working At Wellness 

Companies Search for Ways to Show the Worth of Wellness Programs

Atlanta Business Chronicle - by Giannina Smith Contributing Writer

Many large companies have been steadily jumping on the wellness bandwagon, providing a myriad of health programs and offerings to their employees.  And while companies are encouraged by the participation, which they hope will lead to a healthier, happier and less costly workforce, concrete financial benefits from these programs are still a bit murky, leaving the question:  Do wellness programs work?

In a recent article, Harvard economics professor David Cutler estimates that medical costs could fall by about $3.27 for every dollar spent on wellness programs and that absenteeism costs fall by about $2.73 for every dollar spent. While many companies are using such data to justify wellness programs, their return on investment (ROI) is difficult to measure.

"Most companies aren't measuring exactly the ROI," said LuAnn Heinen, vice president of the National Business Group on Health (NBGH). "You need some big third-party research organization or university who can go in and look at the data and really use a rigorous methodology because there are all these things that effect the validity of the results."

According to a recent NBGH survey completed by 507 employers between November 2009 and January 2010, respondents spent an average of $7,700 per active employee on health care.  Heinen said the cost of a wellness program varies by company, but is usually well under 2 percent of claims cost per employee, bringing the average to about $100 to $150 per employee.

"If you have 10,000 employees, that is going to add up to look like a big number, $1.5 million," Heinen said.  "When you consider they are spending $70 million on sickness claims from health-care use, it is a very small investment."

Large employers are much more likely to offer comprehensive wellness programs than small or midsized ones, Heinen said.  "About 80 percent of Fortune 500 companies have good, comprehensive programs."

Kimberly Hard, founder and CEO of Be Well Atlanta, a company that provides corporations with wellness programs, said the success of programs could be measured by using a benchmark.

"Take the projected claim cost using the past three years as a benchmark and measure it against dollars invested in the first 12 to 24 months of the program," Hard said.  "These are the hard ROIs.  The soft ROIs are what percent of catastrophic claims did we stop based upon the diabetic losing weight and being in compliance, as an example."

Diane Tuccito, director of HR Solutions at Kinetix and past president of the Society of Human Resource Management (SHRM) in Atlanta, estimates the average cost in setting up a wellness program in 2009 at about $329 per employee.  "Some companies with as little as 200 employees are offering wellness incentives up to $1,400 per employee because they see the benefits of keeping their employees healthy," she said.

But despite the costs and difficult-to-measure results, large metro Atlanta employers are revving up their health initiatives.

When Jackson Healthcare was building its new headquarters in 2008, it wanted to create a workplace focused on mental, physical and emotional well-being.  From a game room and fitness center to a full-service restaurant, the new headquarters also features a golfing green, health-care center and natural spaces with waterfalls and streams. Since moving into the new facility in August of 2008, the company has taken its wellness offerings to a new level.

Along with free flu shots and health clinics, the company launched a program called Jackson Challenge, aimed at improving the lifestyle habits of employees. As part of the three- to six-month program, participating workers are teamed up with personal trainers at the on-site gym to develop exercise programs and have monthly meetings with nutritionists.

Although employees pay for the program as they participate, Jackson Healthcare foots the bill - which can be more than $1,000 - if the employee completes the program and achieves the goal they set with their trainer. Other programs include running and triathlon training teams.

"One of the reason's people aren't healthy is because they have a lot of misinformation or misunderstanding of what it takes to live a healthy lifestyle," said Shane Jackson, executive vice president of Jackson Healthcare.  "We've worked very carefully with our trainers to develop programs that are for the individual and are appropriate for where they are and are going to help get them to their goal."

Jackson said about 30 percent to 35 percent of the company has been through the Jackson Challenge and although he thinks it's too early to say what effect these wellness programs are having on health costs, recent participation is encouraging.

A survey showed that of the 70 percent of employees who are members of the gym, 50 percent use it at least three times per week and 90 percent say it has made a difference in their health and well-being.

"Our managers will tell you, from a qualitative standpoint, people have been out sick less than ever before.  I'm not personally 100 percent convinced that our health-care premiums are showing that yet, but that is probably a matter of opinion and probably a matter of time," Jackson said.  "From my perspective, even the qualitative benefits have been well worth it."

Najet Hawkins, senior contract accountant at Premier Anesthesia, a subsidiary of Jackson Healthcare, participated in the company's run team, gym challenge and is currently on the triathlon training team.

"They are basically funding your exercise program for however long you're involved with it," she said.  "It keeps the employees healthy and happy and it's a great stress reliever and it lets the employees know that their employer cares about them and their health, which is huge.  You don't really find that in a lot of places."

The Home Depot Inc.'s branded wellness program, Building Better Health (BBH), covers everything from nutrition and physical activity to tobacco cessation and preventive immunization.

Employee participation in wellness activities