Wellness programs on the rise, employers fail to measure outcomes

February 1, 2011

There are no signs that economic recession is slowing the growth of wellness programs with 74% of employers offering them

NATIONAL REPORTS-There are no signs that economic recession is slowing the growth of wellness programs-74% of employers now offer them. At some firms, incentives have climbed as high as $3,000 per employee per year, according to new data from Buck Consultants.

Many plan sponsors spent $220 more on each employee who participated compared with the previous year, yet most employers have not calculated their return on investment. In the United States, only 40% of plan sponsors have measured program outcomes.

"There is no lack of interest in measuring return," says Barry Hall, FSA, principal of Clinical Healthcare Consulting and Global Technology Solutions at Buck Consultants.

Leading indicators include reduction of known risk factors that affect productivity, absenteeism and safety, such as tobacco use, poor nutrition and stress.

Hall says that there are various levels of evidence. To determine whether health promotion has an overall impact on an employee population is not the same thing as demonstrating that, for example, reducing tobacco use by 10% results in a specific amount of healthcare dollars saved.

"I don't think we need that level of proof for most employers," says Hall.

Small firms can see changes quickly, and large employers that shave two to five percentage points off their trend can save millions of dollars and slow increases in costs.

Among firms that don't measure return on their investment, more than half cite insufficient resources as the primary reason. Some don't understand how to measure the outcomes or are not facing pressure from top management to do so. A smaller percentage either does not think returns are measurable or that the cost of measurement is justifiable.

"Unless you measure results, it's throwing money out the window," says Larry Boress, president and CEO of Midwest Business Group on Health.

He cites separate silos of programs, data and operations as major challenges.

Vendors are "coming out of the woodwork and making broad promises," to try to meet this need, according to Hall. Many are former employee assistance plan providers that have retooled themselves as wellness companies to capitalize on the growth. Employers are anxious to find solutions, and their expectations are high.

"It really is a shared responsibility. You can't just buy wellness from a vendor, and there are no real standards yet. Leadership and company culture are important components," says Hall.