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Finding value in wellness programs

Employers move away from ROI metrics

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BOSTON — As employers broaden the ways in which they measure the efficacy of their workplace wellness programs, many of them say they are beginning to recognize the total value those programs add to their companies.

Fifty-three percent of large employers polled in June and July 2015 by Towers Watson & Co. and the National Business Group on Health say they use a variety of financial and nonfinancial metrics to some extent to better gauge their wellness programs' net impact on their businesses, including overall employee productivity, absenteeism rates and short-term disability costs.

“This institute has spent a lot of time on the value-of-investment concept as well as return-on-investment, and what we're seeing from the survey results this year is that it's actually a little of both,” Shelly Wolff, New York-based senior health management consultant at Towers Watson, said earlier this month during the NBGH's 29th National Conference for Health, Productivity and Human Capital in Boston.

Unfortunately, Ms. Wolff said, the survey also revealed that far too many employers offering wellness initiatives and incentives to their employees do not use either model to evaluate their programs' overall worth.

“Measurement of wellness programs continues to be an issue,” Ms. Wolff said. “It's not being used nearly enough.”

In 2013, Richmond, Virginia-based auto retailer CarMax L.L.C. revamped its workplace wellness program to address a demonstrable link between elevated volumes, durations and medical expenses of short-term disability claims among employees who are at risk for metabolic syndrome, the indications of which are high blood pressure and other maladies linked to chronic conditions such as obesity, Type 2 diabetes and kidney disease.

Janet Bruington, CarMax's director of benefits in Richmond, said during a presentation that early results have been encouraging: CarMax's percentage of at-risk employees shrank to 28% in 2014 from 31% in 2013, generating between $90,000 and $140,000 in estimated savings on costs associated with employee absences and replacement labor.

Ms. Bruington said she and her staff will be watching closely in the coming months and years for an even more substantial reduction of metabolic syndrome indicators among CarMax's workforce, particularly as the company gradually adopts an activity-based rewards strategy that will require employees to complete certain health management activities — as opposed to merely participating in a health risk assessment — in order to receive the $600 annual health plan premium discount it currently offers.

“We're looking for incremental change in the right direction, Ms. Bruington said. “We continue to try to move the needle every year, but we have to balance that against the amount of change we ask our associates to go through from year to year.”

“So far the whole program has been geared toward awareness, but this year will be the first in which we say to the employees that they've got some skin in the game and you actually have to do something in order to maintain the incentive,” she said.

Reducing employee health risks

Newark, New Jersey-based Prudential Financial Inc. has shown similar success in its wellness program by tracking its employees' year-to-year migration along a spectrum of risk levels determined by self-reported health conditions and behaviors.

Prudential has reduced its percentage of high-risk and moderate-risk workers by 46.5% and 28.5% respectively since implementing the risk level methodology in 2010, while the percentage of low-risk employees grew by 8.5%. The result has been fewer employee absences and short-term disability claims, as well as fewer employees reporting presenteeism and lost productivity due to illness or injury.

“When we look at not only the frequency of short-term disability cases but also the duration of those cases, we do see pretty significant differences between the high-risk population and the low-risk population,” said Keith Winick, Prudential's wellness manager in Newark. “We're also seeing big differences between high-risk individuals and low-risk individuals in terms of their scores on our work limitations questionnaire, which measures presenteeism and lost productivity, and we think that if we can move the dial on our people's health risks, we can hopefully affect a lot of these other measures.”