Health Care Costs

ROI CALCULATOR

ENTER CURRENT DATA

Annual Health Care Costs

Annual % Cost Increase

Number of Employees

% Employees that are Obese

% Employees that are Smokers

ENTER TARGET DATA

Obese Employees
Enter Target Percent

Employees Who Smoke
Enter Target Percent

The Science

Details
References

Employees are the most valuable asset of any business. They help produce important business outcomes, but they also cost money in terms of benefits. While deploying wellness strategies might sound like a simple solution for your company, you may not be convinced that it's really worth the investment.

At WellSteps, we've created a series of research-based ROI calculators to help you estimate the effect of well-designed wellness programs on health care costs, absenteeism, and presenteeism. Each of the three ROI calculators will examine a different employee expense and will help you determine whether investing in wellness strategies makes sense for your company. A well-designed wellness program is one that changes the health behaviors of employees, spouses, and dependents, thus lowering health risks, reducing chronic disease, and helping worksites create a culture of health. The design of the WellSteps wellness solution was based on this body of evidence.

In order to use any of the ROI calculators, you need just three pieces of information:

Your company's total health care costs over the past 12 months
The total number of benefited employees
The average percent change in health care costs each year for the past 5 years

In cases where you do not have 5 years of data, consider using the national average which has already been entered for you. It will also be helpful, but not necessary, if you know the percentage of your employee population who are smokers, obese, and have at least one chronic disease risk.

Once you have entered this information, several projections will be produced. First, you will see the "Cost of Doing Nothing." In other words, if you continue doing business as usual without implementing a well-designed wellness program, what will your employee-related expenses look like in the next few years? Remember that these calculators only look at changes in health care costs, absenteeism, and presenteeism. The "Cost of Doing Nothing" projections do not include any estimates of worker's compensation, disability, EAP, or other common employee-related expenses.

Second, the ROI calculator projects an estimate of how much you would save if you decreased the percentage of employees who are either smokers or obese.

Third, the ROI calculator projects what savings would experience if you implemented a wellness program that helped create a worksite culture of health. A well-designed program includes: a personal health assessment, useful wellness campaigns and activities, strong leadership support, smart incentives, and meaningful changes in worksite policies and environments. Engaged participants adopt and maintain healthy behaviors, lower their health risks, have fewer chronic diseases and increase productivity.

We know that not all companies are created equal, but we designed our ROI calculator to consider these unique differentiators. It is important to remember that although the calculators are based on the best published research and are as accurate as possible, they are only capable of producing estimates.

To determine the ROI of wellness programs, we completed an exhaustive search for and systematically reviewed, reputable, published studies dealing with the economic returns of wellness programs. We incorporated those studies that provided the financial metrics necessary to be included in our prediction model and that met research quality standards. These references were updated at the end of 2018, but no additional studies were published in 2017 or 2018. The studies are listed here.^1-38

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 (20% and 33%, respectively). National data also suggest that approximately 60% of employees have at least one risk factor.

For the Presenteeism Calculator, we made several science-based assumptions. First, research indicates that the value of lost productivity is about 3 times greater than health care costs.^39-43 Thus, we conservatively projected the cost of lost health-related productivity to be 2 times health care costs. Second, based on the American Productivity Audit, we estimated that 71% of these costs were associated with reduced performance at work. ⁴⁴ Third, we used two national datasets to estimate the impact of reduced smoking ⁴⁵ and obesity ⁴⁶ on presenteeism costs. Because there is limited literature on the impact of wellness programs on presenteeism, we based our projections on the impact of wellness programs on risk reduction ^47-48, the documented presenteeism associated cost differences between high and low risk employees,^49-50 and salary and benefit data from the U.S. Department of Labor.

Shephard RJ, et al. The influence of an employee fitness and lifestyle modification program upon medical care costs. Can J Public Health 1982;73:259-263.
Bowne DW, Russell ML, Morgan JL, Optenberg SA, Clarke AE. Reduced disability and health care costs in an industrial fitness program. J Occup Med 1984;26(11):809-16.
Gibbs, JO, et al. Work-site health promotion; Five year trend in employee health care costs, J Occup Med 1985;27(11):826-830.
Henritze J, Brammell HL. Phase II cardiac wellness at the Adolph Coors Company. Am J Health Promot 1989;4(1):25- 31.
Wood FA, et al. An evaluation of lifestyle risk factors and absenteeism after two years in a worksite health promotion program. Am J Health Promot 1989;4(2):128-133.
Bertera, RL. The effects of workplace health promotion on absenteeism and employment costs in a large industrial population, Am J Pub Health 1990;80(9):1101-1105.
Dalton, BA, Harris J. A comprehensive approach to corporate health management, J Occup Med 1991;33(3):338-348.
Golaszewski T, et al. A benefit-to-cost analysis of a work-site health promotion program, J Occup Med 1992;34(12):1164-1172.
Leigh, JP et al. Randomized controlled study of a retiree health promotion program: The Bank of America study, Arch Int Med 1992;152:1201- 1206.
Aldana SG, Jacobson BH, Harris CJ, Kelley PL, Stone WJ. Influence of a mobile worksite health promotion program on health care costs. Am J Prev Med 1993;9(6):378-83.
Fries JF, et al. Two-year results of a randomized controlled trial of a health promotion program in a retiree population: the Bank of America study, Am J Med 1993;94:455-462.
Harvey MR et al. The impact of a comprehensive medical benefits cost management program for the city of Birmingham: results at five years. Am J Health Promot 1993;7(4):296-303.
Shi L. Health promotion, medical care use, and costs in a sample of worksite employees, Evaluation Review 1993;17(5):475-487.
Leutzinger J, Hawes C, Hunnicutt D, Richling D. Predicting the ratio of benefit to cost in a cardiovascular disease prevention program. Manag Employee Health Benefits 1995:1-10.
Chapman L, et al. Ten-year economic evaluation of an incentive-based worksite health promotion program, Unpublished data.
Fries JF, McShane D. Reducing need and demand for medical services in high risk persons. West J Med 1998;169(4):201-207.
Maniscalco P, Lane R, Welke M, Mitchell J, Husting L. Decreased rate of back injuries through a wellness program for offshore petroleum employees. JOEM 1999;41:813-820.
Ozminkowski, Ronald J., et al. A return on investment evaluation of the Citibank, N.A., Health Management Program. Am J Health Promot 1999;14(1):31-43.
Hall-Barrow J, Hodges LC, Brown P. A collaborative model for employee health and nursing education. AAOHN J 2001;49(9):429-36.
Schultz ALC, Barnett T, et al. Influence of participation in a worksite health promotion program on disability days. JOEM 2002;44:776-780.
Stave GM, Muchmore L, Gardner H. Quantifiable impact of the contract for health and wellness: Health behaviors, health care costs, disability, and workers compensation. JOEM 2003;45(2):109-17.
Berg GD, Thomas E, Silverstein S, Neel CL, Mireles M. Reducing medical service utilization by encouraging vaccines: Randomized controlled trial. Am J Prev Med 2004;27(4):284-8.
Thorsen N, Khalil L. Cost savings associated with smoking cessation for low-income pregnant women. WMJ 2004;103(5):67-9, 73.
Aldana SG, Merrill RM, Price K, Hardy A, Hager R. Financial impact of a comprehensive multisite workplace health promotion program. Prev Med 2005;40(2):131-137.
Mills PR, Kessler RC, Cooper J, Sullivan S. Impact of a health promotion program on employee health risks and work productivity. Am J Health Promot 2007;22(1):45-53.
Baker KM, Goetzel RZ, Pei X, Weiss AJ, Bowen J, Tabrizi MJ, Nelson CF, Metz RD, Pelletier KR, Thompson E. Using a Return-On-Investment Estimation Model to Evaluate Outcomes From an Obesity Management Worksite Health Promotion Program. JOEM 2008;50(9):981-990.
Naydeck, BL, Pearson JA, Ozminkowski RJ, Day BT, Goetzel RZ. The Impact of the Highmark Employee Wellness Programs on 4-Year Healthcare Costs. JOEM 2008;50(2):146-156.
Davis L, Loyo K, Glowka A, Schwertfeger R, Danielson L, Brea C, et al. A comprehensive worksite wellness program in Austin, Texas: Steps to a Healthier Austin and Capital Metropolitan Transportation Authority. Prev Chronic Dis 2009;6(2).
Henke RM, Goetzel RZ, McHugh J, Isaac F. Recent experience in health promotion at Johnson & Johnson: Lower health spending, strong return on investment. Health Aff (Millwood). 2011;30(3):490-9.
Merrill RM, Hyatt B, Aldana SG, Kinnersley D. Lowering employee health care costs through the Healthy Lifestyle Incentive Program. J Public Health Manag Pract. 2011;17(3):225-32.
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Grossmeier J, Seaverson EL, Mangen DJ, Wright S, Dalal K, Phalen C, Gold DB. Impact of a comprehensive population health management program on health care costs. JOEM 2013;55(6):634-43.
Maeng DD, Pitcavage JM, Tomcavage J, Steinhubl SR. Can health insurance improve employee health outcome and reduce cost? An evaluation of Geisinger's employee health and wellness program. JOEM 2013;55(11):1271-5.
Schwartz SM, Mason ST, Wang C, Pomana L, Hyde-Nolan ME, Carter EW. Sustained economic value of a wellness and disease prevention program: an 8-year longitudinal evaluation. Popul Health Manag. 2014;17(2):90-9.
Goetzel RZ, Tabrizi M, Henke RM, Benevent R, Brockbank CV, Stinson K, Trotter M, Newman LS. Estimating the return on investment from a health risk management program offered to small Colorado-based employers. JOEM 2014;56(5):554-60.
Eckermann S, Dawber J, Yeatman H, Quinsey K, Morris D. Evaluating return on investment in a school based health promotion and prevention program: the investment multiplier for the Stephanie Alexander Kitchen Garden National Program. Soc Sci Med. 2014;114:103-12.
Light EM, Kline AS, Drosky MA, Chapman LS. Economic Analysis of the Return-on-Investment of a Worksite Wellness Program for a Large Multi-state Retail Grocery Organization. JOEM 2015;57(8):882-92.
Merrill RM, LeCheminant JD. Medical cost analysis of a school district worksite wellness program. Prev Med Rep. 2016 26;3:159-65.
Kudel I, Alves JS, de Menezes Goncalves T, Kull K, Nørtoft E. The association between body mass index and health and economic outcomes in Brazil. Diabetology & Metabolic Syndrome 2018;10:20.
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Burton WN, Pransky G, Conti DJ, Chen CY, Edington DW. The association of medical conditions and presenteeism. J Occup Environ Med. 2004;46(6) suppl:S38-S45.
Pelletier B, Boles M, Lynch W. Change in health risks and work productivity over time. J Occup Environ Med. 2004;46(7):746-754.
Goetzel RZ, Long SR, Ozminkowski RJ, Hawkins K, Wang S, Lynch W. Health, absence, disability, and presenteeism cost estimates of certain physical and mental health conditions affecting U.S. Employers. J Occup Environ Med. 2004;46(4):398-412.
Collins JJ, Baase CM, Sharda CE. The assessment of chronic health conditions on work performance, absence, and total economic impact for employers. J Occup Environ Med. 2005;47(6):547-557.
Stewart WF, Ricci JA, Chee E, Morganstein D. Lost productive work time costs from health conditions in the United States: Results from the American productivity audit. J Occup Environ Med. 2003:1234--1246.
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INSTRUCTIONS:

Enter your current data.
Click on the links below to view a full-size graph of your entered data.
Modify your inputs to view cost changes.

Costs

The graph below represents projected costs for a group with no wellness program. If the trends continue, with no evidence-based strategies applied, the costs of health care, absenteeism and lost productivity will increase.

Obesity is increasing and it is costly.

About 9% of all health care costs and a large burden of lost productivity are associated with obesity. Reduce obesity and you can expect to lower health care costs, less absenteeism and increased productivity.

Smoking

Smoking remains one of the most expensive behaviors in terms of money and lives lost. Generally, 8% of all health care costs are associated with smoking. It also causes a large burden of lost productivity.

Effect of a great wellness program.

Projected health care costs of a wellness program. Compare the data with the cost of not having a wellness program.

PROJECTED
COSTS
SAVINGS FROM
REDUCING OBESITY
SAVINGS FROM
REDUCING SMOKING
SAVINGS FROM
WELLNESS PROGRAMS