Employees are the most valuable asset of any business. They help produce important business outcomes but they also cost money in terms of benefits. So if you were to invest money to improve the productivity and reduce the costs associated with your employees, would you do it if the benefit justified the cost?

Perhaps you believe that deploying wellness strategies makes sense for your company, but how can you determine whether doing so is really worth the investment? At Wellsteps, we've created a series of research-based tools called ROI calculators. ROI Calculators for health care costs, absenteeism, and productivity are available or are currently being developed. The ROI calculators will help you determine whether investing in wellness strategies makes sense for your company.

In order to use this ROI calculator for health care costs, you only need three pieces of information: 1) your company's total health care costs over the past 12 months, 2) the total number of benefited employees, and 3) the percentage change in health care costs each year for the past 5 years. It would also be helpful, but not necessary, if you knew the percentage of your employee population who were smokers and who were obese.

Once you have entered this information, you will get several projections. First, you will see the "Cost of Doing Nothing." In other words, what will happen to employee costs in the next several years if you do nothing? Remember that "Employee costs" include health care costs, employee absenteeism, or lost productivity, so the total cost of doing nothing is probably bigger than you think.

Second, because we have a very good idea of the independent costs of smoking and obesity, the ROI calculator can project about how much you would save if you decreased the percentage of employees who are either smokers or obese.

Third, the ROI calculator will project what you would save versus the cost of doing nothing on employee costs after implementing a low, medium, or high intensity HPM program.

We know that not all companies are created equal. We have done our best to consider possible differences as we have constructed these calculators. So while the ROI calculator will yield conservatively accurate forecasts given the operating assumptions, there is really no way to predict the future.

1. In order to determine the ROI for wellness programs, we completed an exhaustive search for reputable, published journal articles dealing with the economic returns of HPM programs. We identified 25 studies and grouped each according to the intensity of the intervention that was administered.
2. Wellness programs were considered low intensity if they included only an HRA, marketing campaigns, and/or printed materials. Programs that also included any type of intervention were considered medium intensity, and those that also included cultural or environmental components were considered high intensity.
3. We calculated the average ROI for each intensity level and made some conservative adjustments based on the approximate PEPY costs at each intensity level and on a few other factors. We used this adjusted ROI figure to project cost savings over time in three different scenarios.
4. To project the cost savings of reducing cigarette smoking or obesity, we assumed, unless you knew these figures, that the rates of smoking and obesity in your company were roughly the same as the national averages (22% and 33% respectively).

References

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We created the ROI calculator to help you better understand the impact of worksite wellness programs on health care costs. It's very easy to use. Enter your total health care costs for the past year and number of employees with benefits in the fields to the left. Your health care costs have probably increased over the past few years. If you can, also enter the average percentage increase your worksite has experienced. If you aren't sure, the national average is the default.

Next, enter the percentage of your employees who smoke or who are obese. We've entered the national average if you don't know. Lastly, estimate the impact your wellness program might have on employee obesity and tobacco use.

Then, click the calculate button. Your data are used to produce four outputs located at the top of this page. The first is projected costs. This is a 6-year projection of your health care cost trend. We call it the "Cost of Doing Nothing." You can also see the projected cost savings of reduced tobacco use and weight loss. Our favorite output is the impact of wellness programs. Here you can see health care cost projections if you start a low, medium or high impact wellness program.

This calculator is based on the best available science. Click the Science tab to get the scientific rationale. We believe that our calculator provides conservative estimates. From our experience, many companies actually have better outcomes than what we have projected here. Remember that all financial estimators can produce only estimates. We invite you to try some different calculations and see how your employee health can really impact the bottom line.