what do we mean when we talk about employee wellness ROI?

March 5, 2013

in cohealth,incentives,wellness,wellness ROI

just this week i’ve read three thought-provoking articles on employee wellness return on investment (ROI):

a subscription is required for the last two from health affairs, but you can find reporting on at least the third article in US news.

each of these articles essentially concludes that historic reporting on wellness ROI is questionable. this point has been argued—well—by our march 6 cohealth checkup guest bob merberg. in a january 9, 2013 post, bob writes about what has been considered the potential ROI for workplace wellness: for every $1.00 spent on a wellness program, medical costs are reduced by $3.27. this ROI came from a harvard meta-analysis published in health affairs, the same journal that published two of the articles above.

in his post, bob summarizes the harvard meta-analysis’ findings and shares the flaws he sees in it:

“Here’s what the study came down to: The researchers identified 100 peer-reviewed studies that took place over the previous 30 years. Of these 100 studies, they narrowed it [sic] down to a sample of 36 studies that were unique and properly designed. Of these 36 studies, 22 evaluated employee health care costs. Of these 22 studies, only 15 reported program costs (essential for calculating ROI). Of these 15 studies, only 14 showed cost savings for the intervention group compared to a control group (i.e., in one study, health care costs grew faster for wellness participants than it did for nonparticipants).

“The study authors dutifully cite the potential of publication bias influencing their results. Publication bias—which recognizes that unfavorable findings are less likely to be published and therefore are omitted from this type of meta-analysis—likely has a dramatic effect on employee wellness ROI studies. Most ROI studies are conducted by wellness vendors seeking to create credibility for their products and/or large employers seeking to justify their programs (or, one might suspect, employers partnering with vendors on research projects in order to procure discounted pricing). Neither vendors nor employers publish their studies that prove their programs are ineffective or costly. Until there is a body of objective peer-reviewed ROI research, any meta-analysis is not worth the paper on which it is published.

“Baicker and her co-authors could have used the same exact data they used in their study, and concluded: ‘Employee wellness programs rarely lead to a positive ROI.’ This statement is wholly supported by the facts, and could even have served as the title for the very same article.

“Indeed, while the content of the article repeatedly hammers home the statement, ‘medical costs fall by about $3.27 for every dollar spent on wellness programs,’ the more accurate message is ‘hidden’ in the article … in the title! The title reads, ‘Workplace Wellness Programs Can Generate Savings.’ Can generate. Not wellness programs do generate. Not  are likely to generate. They can generate. It’s possible.”

the harvard meta-analysis, bob’s post, these three new articles, and others published in between come to a similar conclusion: we really don’t know the cost-savings ROI of workplace wellness across companies.

we do know that the majority of companies don’t measure ROI today.

we do know that companies are spending increasingly more to try to achieve it.

we do know that more companies are going to tie incentives to outcomes in an effort to achieve it (an approach considered seriously flawed by many health experts ).

we do know that getting ROI relies on an effectively designed and flawlessly implemented program design.

we do know that other countries implement workplace wellness for reasons unrelated to cost savings, and that a healthy, productive workforce is paramount for a healthy, productive economy.

and we do know one final thing: bob merberg is our cohealth checkup guest this wednesday, march 6 at noon EST. we’ll be wrestling with questions about ROI, among others. join us.

note: listen to the recording of today’s cohealth checkup with bob merberg to hear about ROI, evidence-based program design, and karoshi, death from overwork. 

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{ 2 comments… read them below or add one }

Rory Trotter March 6, 2013 at 1:02 am

Thanks for sharing.

There isn’t enough discussion in the HR community about how to design metrics around employee wellness and track the return on investment.

Very good read.

Best,

Rory

Reply

fran March 6, 2013 at 6:49 pm

thanks for your comment, and for reading. for more on this discussion, i recommend listening to the cohealth checkup with bob merberg i mention in the post. it was a rich and interesting conversation! here’s a quick link to it: http://bit.ly/WSQT5Y

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