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Corporate wellness programs help shape a better bottom line

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Employers with longstanding wellness programs that identify and target at-risk employees are reporting a positive return on their investment.

Data is not yet available, however, for many employers who launched such programs in the past three years, when interest in wellness programs began to surge, employers and consultants say.

A recent PricewaterhouseCoopers L.L.P. report based on information from multinational employers and a review of case studies found that wellness programs can result in a 3-1 return on investment.

However, because of lack of standardization, "it is impossible to make generalizations" about the financial impact of a specific wellness program or a company's experience, said Sandy Lutz, a co-author of the report and director of PwC's Health Research Institute in Dallas.

"Most programs we saw" realized a positive return on their investment in three to five years, Ms. Lutz said.

"Employers that do a very good job of selecting vendors and implementing the right programs that meet the needs of their populations should start to see a positive ROI sometime in the second year" of a wellness program, said Joe Marlowe, senior vp with the health and benefits practice of Aon Consulting in Philadelphia.

Consultants cite numerous peer-reviewed studies that have found a reduction in costs as a result of wellness programs in the United States. That research prompted Unilever to conduct a wellness pilot in the United Kingdom in 2004 and 2005, which, "to our astonishment," produced a 3.7-1 return on investment, said Dr. John Cooper, head of corporate occupational health for Unilever P.L.C. in London.

Based on those peer-reviewed results, soon to be published, Unilever rolled out a wellness program globally late last year that includes a health risk assessment and a personal coaching program for exercise, nutrition and "mental resilience," he said.

Five years ago, Microsoft Corp., which was spending about 40% more in medical claims for obese employees than other workers, implemented a weight loss program at a cost of $6,000 per participant, said Cecily Hall, director of U.S. benefits in Redmond, Wash. Today, Microsoft is seeing a return on investment for participants entering the program five years ago.

"It does take about five years to get ROI, but beyond that it's pure savings," Ms. Hall said.

Microsoft has a longstanding comprehensive wellness and prevention program including onsite health screenings and has begun providing a screening in a hospital setting--once reserved only for high-level executives--for all employees. "We anticipate full cost recovery over time," Ms. Hall said.

American Standard Cos. Inc.'s comprehensive wellness and prevention program has resulted in a trend of reduced medical claims, said Heidi A. Lattig, LifeSteps program manager in Piscataway, N.J. One site's medical claims dropped 2.2% even though employees' risk profile deteriorated, she said. Reduction in work days lost to illness "recently allowed the company to estimate a 4% productivity gain in budgeting," she said.

At General Mills Inc., comprehensive wellness programs dating back 20 years have resulted in medical claims that "track below national trends and other major employers" and show "dramatic" reductions in heart disease, said Dr. Timothy Crimmins, vp-health, safety, and environment, in Golden Valley, Minn. Results "are hard to attribute to a single program-- it's all about the overall culture of wellness, starting with our CEO. We found out that what really matters is senior leadership modeling."

Consultants concur. "To be effective in wellness, you need the support of management--ideally senior management and certainly the supervisor--who needs to let employees take the time to engage in the program," said Bruce Kelley, leader of evidence-based consulting with Watson Wyatt Worldwide in Minneapolis.

"A wellness culture means living it every day," said Mike Miele, president of Apex Management Group in Princeton, N.J. "That means not serving Danish at the meeting, having skim milk in coffee machines and the CEO not having steak at dinner," he said.

While Apex's studies of eight companies found no savings as a result of wellness programs, it did find "a moderate reduction in health risk," Mr. Miele said.

Employers should hold wellness program providers accountable for their ROI predictions, Mr. Miele said.

Watson Wyatt's Mr. Kelley added, "We recommend employers use one of the leading vendors" who can integrate all components of a wellness program around a health coach.

Another key to implementing an effective wellness program is the health risk assessment.

"Many employers are not focusing on the top risk factors of their employees. They're probably not doing (health risk assessments) and just deciding on a wellness program based on what their neighbor offers," Mr. Kelley said.

As an employer, Aetna Inc. last year moved all of its employees into Aetna Integrated Health Solution, a program that begins with a health risk assessment, followed by wellness counseling and direction to appropriate wellness and medical programs, said Timothy Blevins, head of clinical products and integration in Hartford, Conn.

Data that Aetna tracked last year on 6,092 employees who took a health risk assessment showed the value of that tool.

For example, 2,560 employees identified on the assessment as having five or more health risks incurred average costs of $37.05 per month for inpatient care--which was an unspecified amount lower than the inpatient costs of 1,039 employees with four health risks. "That shows that people who are motivated enough to take a health risk assessment, even with five or more health risks, are probably doing a pretty good job of staying out of the hospital, using ambulatory services, taking their medicine" and participating in wellness activities, said Mr. Blevins.

On the other hand, Aetna's data showed that not taking a health risk assessment correlates with high medical claims. Of 206 employees who incurred more than $50,000 in medical claims, 199 did not take a health risk assessment.

Employers are continually modifying their wellness programs, "which is what makes it hard to evaluate them," said Helen Darling, president of the National Business Group on Health in Washington.

For example, some companies are increasing the cash or other incentives employees receive--such as Virgin Life Care Inc.'s HealthMiles program, which allows employees who track wellness efforts to redeem points for free products from retailers--while others focus on new ways to make wellness part of the company culture.

Now that more employers have data mining capabilities and can track results, "we will have more answers than we had five years ago," Ms. Darling said.