What’s The Return On Investment Of Employee Wellness Programs?

yoga_businessmanHave you ever wondered what the return on investment is for employee wellness programs?  You’re not the only one! The Department of Labor and Health and Human Services also wanted to look at the impact of employer sponsored wellness plans and those results created a stir in the wellness community.

The first report was performed by the Rand Corporation and commissioned by the Department of Labor and Health and Human Services.  As more employers begin to implement wellness programs, the government entities wanted to determine the impact of employer wellness programs on the employee’s health and ultimately lowering health care cost.  This government sponsored study focused on the “lifestyle” (exercise, nutrition, stress, tobacco use) of employees.  Based on their results, the Rand study determined those employees that participated in employer wellness programs can reduce risk factors; however, the Rand Corporation did not see a cost reduction that was statistically significant.

PepsiCo has since released a different study examining their wellness programs performed by the same Rand Corporation.  PepsiCo’s study had a different twist. In addition to “lifestyle management”, PepsiCo’s also reviewed the impact of their “disease management programs” (programs focused on chronic conditions).  Both the lifestyle and disease management programs provided health coaching to those 67,000 employees identified at risk.  Based on seven years of data, the PepsiCo report concluded there was little return on investment on “lifestyle” programs.  However, the results were very different for the “disease management” programs, which showed health care savings of $3.78 for every dollar spent.  If you’re interested in the PepsiCo wellness study results they are available online.

As technology, such as Verisk becomes more sophisticated in being able to 1) identify members with chronic conditions and 2) predict members that will experience high future medical expenses, employers will be focusing on those individuals driving a significant amount of the expenses. Helping those individuals manage their chronic conditions will be a critical component in controlling cost.