By BLR Founder and CEO Bob Brady
Do workplace wellness programs really pay their way in terms of profit and loss? And, if so, how can we convince corporate management that they do?
This was the question addressed by speakers at the 16th Annual Art and Science of Health Promotion Conference in Las Vegas, which I attended. The answer--once again-- is a case of “good news, bad news.”
On the positive side, it doesn’t take much improvement to make wellness initiatives pay off (less than a 1% reduction in risk factors.) On the negative side, people with the most severe problems have little interest in lifestyle changes, and even those that are interested find making the changes very difficult.
In general, employers can earn back the cost of programs over the course of 5 years if they can reduce risk factors by less than .2% (yes, that is point 2 percent, not 2%).
This is the conclusion of research delivered by Dr. Ron Goetzel of Cornell University.
In a study funded by the Centers for Disease Control (CDC), Goetzel looked at a wide range of factors, including healthcare costs, age of workforce, and smoking and other lifestyle factors. Goetzel then created an ROI calculator that allowed him to figure out the minimum improvement required to break even on an investment, as well as the projected ROI that a specific set of improvement assumptions would yield.
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Looking at specific companies, he found that Dow Chemical would have to achieve a .17% improvement to break even. A 1% improvement would yield a return of $3 for every $1 spent … a 300% ROI. At Dow, that means huge dollars. The company has 26,000 employees, so a 1% improvement saves $50 million over 5 years.
Other companies had different breakevens. Union Pacific’s was about .49%; Motorola’s .67%.
Goetzel has urged CDC to make the calculator he invented, which is web-based, available to the public, but has no timetable for when this would happen.
A number of the speakers at the conference focused on the nuts and bolts of what employers have to do to improve lifestyles and reduce risk factors. Some of the insights:
* Aim at the top. Goetzel has a program called “leading by example” in which he goes to the top of the corporate structure and works with “C” level people on their personal health and fitness agendas. Another speaker, William Baun, works with the CEO of a hospital, who has adopted a practice of “walking meetings” which lets him exercise as he confers with his staff. The objective: Get high level support and commitment and to effect a change in culture.
* Take programs to the people. Baun has created innovative, low-budget practices that take programs directly to people at their jobs. He offers “wellness on wheels,” a cart filled with wellness materials. He puts up a sign in office corridors reading “Wellness Coach on Duty” and provides materials and advice during “ASAP” meetings in the hallways under the slogan, “If you have 5 to 10 minutes, we will advance your knowledge.”
* Budgets are required—but not enormous ones. One member of the audience asked. Goetzel how much employers must spend to have an impact. His response: “You can get things done for $100 to $250 per employee, per year.”
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* If you leave things alone, they are going to get worse. One depressing fact is that most people gain weight over time. So, even if your employee population is reasonably healthy now, it probably won’t be in the future—unless we take steps to alter behavior.
* Involve family. It will be very difficult for employees to change if their families do not. Consider an employee who wants to quit smoking, but whose spouse has no such desire. Furthermore, company healthcare costs are hugely affected by dependent care costs.
* Bribery doesn’t really work. Some employers have fashioned incentives to get employees to quite smoking, lose weight, etc. These get attention, but their long-term impact is pretty limited. “Intrinsic” rewards, such as improved life experience, are what really motivate people to stay committed, the conference experts said.
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