While most employers that implement wellness programs look for returns on their investment in the form of lower group health costs, far greater benefits may be realized in the form of higher productivity, reduced absenteeism and lower workers compensation and disability-related costs, experts say.

But because most employers do not track these costs in correlation to their wellness programs, they may not be aware of how great an impact such health promotion programs may be having on their employees' overall performance, experts say.

In fact, oftentimes the productivity impacts of wellness occur long before medical cost savings, according to Stephanie Pronk, senior vice president at Aon Hewitt based in Minneapolis.

“In general, you will see the indirect savings before you see the health care cost savings,” she said.

The San Francisco-based Integrated Benefits Institute, a nonprofit dedicated to helping employers improve their workforce health and productivity, has developed a tool that can help employers measure just how much impact wellness and health promotion programs are having throughout their organizations.

IBI's Full Cost Estimator calculates the total cost of employee health to an employer, explained IBI President Tom Parry. This includes not only group health care costs for employees and dependents, but also costs related to incidental absence or sick leave, short-term disability, long-term disability, workers compensation and even “presenteeism,” which is defined as when employees are not working to their full potential because of underlying health issues.

“Just two pieces of information — an employer's industry and number of employees — will give a general estimate of these costs,” Mr. Parry said. But when more information is added, such as unplanned absences and disability data, the Full Cost Estimator can be more precise, he said.

%%BREAK%%

Until recently, use of this tool had been slow to catch on because all too often “employers are still siloed in the way they structure their programs,” Mr. Parry said. “Individuals responsible for wellness or group health or workers comp may not know what other data is available or even who the other people are.”

But now that so many company chief financial officers are asking questions about how employee health may affect a company's profitability, employers are becoming more interested in using IBI's Full Cost Estimator “to facilitate that conversation and demonstrate how improvements in employee health could actually enhance business performance,” Mr. Parry said.

Demand for copies of an article describing the use of the tool that was published recently in Population Health Management is indicative of this trend, said Mr. Parry, who co-wrote the study with Bruce Sherman, medical director at Bentonville, Ark.-based Wal-Mart Stores Inc.

“We received over 550 requests for that article,” which is titled “A Pragmatic Approach for Employers to Improve Measurement in Workforce Health and Productivity,” Mr. Parry said. “What that tells me is the issue of measurement is becoming a big deal.”

Among other things, the article advocates that enlightened employers “focus their measurement efforts using a total-workforce and total-population-health-management lens, rather than focusing on a limited set of disease-specific strategies; include health dimensions that cut across all health-related benefits programs, including sick leave, disability and workers compensation; include business-relevant monetized outcomes; communicate results with sufficient operational metrics to guide action; and specify a limited set of dashboard metrics to provide a broad overview and effectively communicate population health status and trends, both within their organizations and with their external partners.”

%%BREAK%%

The Nashville, Tenn.-based Health Enhancement Research Organization also has studied the correlation between wellness and business performance, finding that employees with an unhealthy diet were 66% more likely to report having experienced a loss in productivity than those who regularly ate whole grains, fruits and vegetables.

HERO's study, a collaboration with researchers from Brigham Young University and the Center for Health Research at disease management provider Healthways, also found that employees who exercised only occasionally were 50% more likely to report having lower levels of productivity than employees who were regular exercisers. The report, to be published in the October issue of Population Health Management, also found that smokers were 28% more likely to report suffering from a drop in productivity than nonsmokers, according to HERO.

Another study, “Health and Productivity as a Business Strategy: A Multiemployer Study,” published in 2009 in the Journal of Occupational and Environmental Medicine, found that presenteeism — defined as when employees are present at their jobs but unable to perform at full capacity because of health issues — actually creates a greater drain on company productivity than employee absence. That study combined medical and pharmacy claims data with self-reported health-related employee absenteeism and presenteeism data collected using the Health and Work Performance Questionnaire, a tool developed by Harvard University researcher Ronald Kessler and the World Health Organization.

“Obesity and Workers Compensation,” a study published in 2007 by Duke University, found that employees who managed their weight to achieve a lower body mass index experienced fewer occupational injuries.

“That is why we try to integrate traditional wellness with existing safety programs,” said Brent Hartman, health risk management practice leader at broker IMA Inc. in Denver.

%%BREAK%%

Incorporating wellness into safety programs is having an even greater impact with the aging population, according to Joseph O'Brien, president and CEO of Interactive Health Solutions, a wellness program vendor based in Schaumburg, Ill.

“As we get older, a lot of the medical claims are showing up in workers comp and disability,” he said. “If I'm an uncontrolled diabetic and get hurt on the job, I could have gotten hurt because I'm dizzy or not concentrating. And if it's a wound issue, being a diabetic complicates things. The wounds will heal slower.”

In researching the impact of wellness on work comp and short-term disability claims, IHS found that workers participating in wellness programs reported fewer work-related incidents and the injuries sustained were generally less severe, resulting in less time off.

“The same health risks that generated health benefit costs all have an impact on absenteeism, presenteeism, workers comp and long-term disability,” said Alan Pollard, New York-based CEO of the Vitality Group Inc. Therefore, “if you've got two people and they're both being admitted for a workers comp-related illness or injury, you would expect the person engaged in wellness to have better outcomes.”