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Beating the Dead Horse of Wellness ROI

by Dean Witherspoon   Dean's profile on LinkedIn  

“This document was posted in error and has been withdrawn pending completion of contractual obligations to the project sponsor.”

 

It’s not surprising the RAND report saying, essentially, workplace wellness doesn’t work reached that conclusion. What is surprising is how swiftly it was pulled from their website — and then reposted, presumably after an outcry from conspiracy nuts.

 

It’s unlikely the report will have any significant impact on workplace wellness, particularly since the Affordable Care Act is set to swing into full gear in just 6 months. The law makes wellness participation almost mandatory, or alternatively, nonparticipation punitive. It’s unfortunate. The Act’s wellness provisions were sold on the idea of a positive ROI for workplace wellness — a notion that was wishful thinking or sloppy science at best and hucksterism at worst. You can read a summary of the RAND report here.

 

But the report as well as the ongoing back and forth about clinical and financial implications misses the mark: Workplace wellness should never have been about ROI in the first place. Yes, organizations need to manage healthcare expense and consider health and productivity as an asset, just as they do equipment and buildings. But unlike bricks and mortar, people are not static, interchangeable parts that fit a neat mathematical formula. Some organizations have done an admirable job of attempting to honestly measure the true financial impact of wellness. The average workplace, however, doesn’t come remotely close to having the resources to measure ROI with any degree of confidence. Nor should they.

 

Let’s Focus on What Matters

Wellness consulting agencies and some vendors have done the industry a huge disservice in the last 15 years by focusing on something they will never be able to prove. And for what? What other workplace benefit has subjected itself to such dollars and cents scrutiny? When was the last time you saw the ROI for pensions, childcare, vacations, paid family leave, adoption assistance, long-term care insurance, casual days, contraception benefits, legal assistance, sports team sponsorship, retiree medical, etc., etc., etc.?

 

The point is organizations make these investments because they think it’s good for business, yet in almost all instances they have no proof-positive financial justification. They offer these benefits because they think they’ll attract and retain the best employees to make their organization successful. And that’s the rationale we need again for workplace wellness.

 

We must reset our thinking to the idea that a well conceived, expertly executed wellness program adds to the quality of work life. It’s another reason employees love to come to work. It’s crucial to a culture that values people for their contributions as part of a community working toward the same objectives — recognizing that those workers are more than the sum of their salaries and healthcare expense.

 

To get to that state of mind, we need to refocus our wellness programs on greatness. What can we do to make our services so compelling that people want to be part of them and don't have to be bribed or browbeaten into participating? Here are some immediate steps to get you headed in the right direction:

  • Stop paying people to get well. We’ve written often about why this is a terrible idea (read our white paper, How Financial Incentives/Disincentives Undermine Wellness). The bottom line is it makes it harder to create a culture where people value health for health’s sake, and therefore more difficult to achieve lasting health improvement.
  • Do less, but be amazing at it. Scrap the checklist mentality reinforced by the “best practice” notion that says for a wellness program to be effective you need this, and this, and this. Figure out what you have the resources to do extremely well that will have the greatest impact, and bet the farm on it.
  • Highlight people, not statistics. Yeah, the VP of Really Important Stuff will want to know how many people participated, completed, etc. But if you want the VPRIS and her boss’s boss to be impressed with your results, tell the stories of people whose lives you’ve changed and the gratitude they feel toward the company because you have this amazing wellness program.
  • Have some fun. Geez, can we all just get back to enjoying what we do and the lives we touch? Isn’t that why you got into this field in the first place?

For more on what we think wellness should be about, watch for our upcoming white paper Winning at Wellness: Why Quality of Life Matters… and ROI Doesn’t.


Comments   

 
Tony Nefouse 06/21/2013 10:33:40
I think it's good that we now see wellness cannot be sold on a ROI. In the past wellness has been sold on lowering your group health insurance claims and thus reducing cost. As we all know 80% of the claims come from just 10% of the group. Most of those claims are from acute care where wellness may not help. From a cost standpoint a true wellness program can be an costly employee benefit. So now the program can not be sold on a ROI basis you have to sell it as an employee morale booster. Get the employees working on a common goal together and that is better health. You can sell all the reason why a healthy employee is better employee.
Now you have to justify the cost of the program. The other obstacle can be is it the employers responsibility to make their employee healthier? With the ACA you now can charge an employee more premium if they do not participate in a wellness program. The group still has to sponsor the wellness. www.indianahealthinsurance.com
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Ron Burt 06/06/2013 11:22:12
Dean, I agree with 95% of your position and your article. It is important we change the perspective of employers so they look at the benefits of wellness beyond having an ROI. We still differ on the value of health incentives but i certainly understand your position.

When Larry Chapman and I developed a health incentive program at a hospital some 20 years ago we wanted to do something outside the box to motive employees extrinsically to participate in our criteria based Wellness Challenge. However, we were very focused on having a strategy to improve health and poor health habits that would shift employees motivation to more of an intrinsic motive force. We did evaluate the financial impact of the program over a 10 year period and found a positive ROI but the primary focus and interest by leadership was the health improvement and changes in employees satisfaction about the organization. The ROI became an after thought in relation to the investment.
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Fred Goldstein 06/05/2013 15:15:30
The report was pulled not because of some conspiracy, but because RAND inadvertently posted it on their website before they had approval from the study funders (the Feds) to release it. In fact the study demonstrates that these programs do reduce health risks and many other successes. According to RAND it appears these programs achieve budget neutrality at year 5 if one considers that the average program costs are about $150 per year, and thats just on medical claims, but to be certain requires a longer study and/or more data. I do agree that there are other things that need to be considered and perhaps better ways to achieve results, but that is the purpose of studies, always trying to determine what does and what doesn't work.

Most people are now looking at total value of the program, not ROI which is very hard to quantify.
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Bob Merberg 06/05/2013 21:55:36
I agree, Fred, that the RAND study presents employee wellness in a relatively positive light, contrary to media reports and subsequent online discussions. I plan to publish a post soon detailing how *most* of the information in the initial media report was either distorted or completely false. Importantly, the study, as you know, found that employee wellness programs lead to "statistically significant and meaningful improvements in exercise frequency, smoking behavior, and weight control," and "confirms that workplace wellness programs can help contain the current
epidemic of lifestyle-related disease." I believe that the cost-savings findings were not quite as optimistic as you've presented them in your comment, but -- and this is where I was agreeing with Dean -- cost-saving is not a sensible standard for wellness program measurement. I would like to agree that "most people are looking at total value, not ROI" ... but, at this point, I can't.
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Karen Mastroianni 06/05/2013 13:23:24
Perhaps we can reach the tipping point and change the direction of wellness programs. I hope that Jon is correct and we can turn things around before further damage is done. How to keep this momentum going in the right direction? Sometimes I feel that I am alone and swimming upstream. This is very encouraging!
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Dave Rearick 06/04/2013 21:09:23
Agree! I've been saying for years that asking for the wellness ROI is asking the wrong question. My reply has always been, "What is the ROI on offering benefits? I've never had a CFO/HR director give me an answer. Disease Management mostly has a negative ROI, but like wellness it is just the right thing to do.
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Jon Robison 06/04/2013 20:33:43
Hey Dean and Bob - I think this report could have a significant and perhaps major impact on the industry - I have just begun working with a large group of companies and after presenting the information from Rand - which I actually did before it was leaked - because it is the same thing I have been saying for a decade and a half - many are thinking of doing things differently - many of these companies had been looking for a way to do something different because they had been sensing that things were not okay - others were just beginning and feeling that they did not want to go down that route - - I am hopeful that we can turn this nonsense around before we do more damage - Jon
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Bob Merberg 06/04/2013 17:37:39
This is an inspired post, Dean. Essential reading for all of us in the wellness industry. As you may know, I 100% agree with everything you say about ROI.

One point you made, however, did leave me scratching my head. You wrote, "The law makes wellness participation almost mandatory, or alternatively, nonparticipation punitive." Can you say more about this? I, personally, believe that the law's impact on employee wellness programs has been dramatically overstated. But I am open to other viewpoints and would certainly value yours.
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Dean Witherspoon 06/05/2013 13:02:17
Hey, Bob. If only one point made you scratch your head, I must not be trying hard enough. What I meant was that in organizations that embrace the incentive/disincentive provisions of the ACA, their employees could feel they have no choice but to participate/comply -- which we know is counter productive to long-term behavior change.

I really don't know what impact the ACA will have in the short term, but I expect you're right -- not a great deal. But the runaway train of incentives/disincentives has gotten us way off track and is the biggest threat to the industry's viability.

I'm hoping Jon is right, that leading companies will rethink their approach and we get on a more sensible path.
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