|Projected Health Care Costs|
|Savings In Health Care Costs Per Year|
|Year||Do Nothing||Reduced Cost||Estimated Savings|
|Savings In Health Care Costs Per Year|
|Year||Do Nothing||Reduced Cost||Estimated Savings|
|Projected After Cost Health Care Savings|
|Year||Do Nothing||High Impact Wellness||Savings|
Employees are the most valuable asset of any business. They help produce important business outcomes but they also cost money in terms of benefits. You may believe that deploying wellness strategies makes sense for your company, but 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, and lowers health risks, reduces chronic disease,
and helps worksites create a culture of health. The design of the WellSteps turnkey wellness solution was based partly on this body of evidence.
In order to use any of the ROI calculators,
you need just 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 average percentage change in health care costs each year
for the past 5 years. If you don't have these data for 5 years, consider using the national average which has already been entered for you, It would also be helpful, but not necessary, if
you knew the percentage of your employee population who were smokers,
who were obese, and who 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 any wellness programming, what will your
employee related expenses look like in the next few years. Remember
that our 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, because we have a very good
idea of the independent costs of smoking and obesity on health care
costs, absenteeism and presenteeism, 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 if you implemented a high impact wellness program.
A high impact wellness program helps create a worksite culture of health.
Program participants adopt and maintain healthy behaviors, lower health
risks and have fewer chronic diseases. The programs typically
include a health risk appraisal, specific wellness campaigns and activities,
strong leadership support, incentives, and meaningful changes in worksite
policies and environments. Participants in these programs become
healthier, more productive employees.
We know that not all companies are
created equal and 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. In essence, the calculators
are as accurate as we can possibly make them and they are based on the
best published research but at their best, they are estimates.
In order to determine the ROI of wellness
programs, we completed an exhaustive search for reputable, published
studies dealing with the economic returns of wellness programs and
we systematically reviewed these studies. We included those studies that provided
the financial metrics necessary to be included in our prediction model and that met research quality standards. The studies are listed here.1-31
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 34% 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. 32-36 We therefore 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. 37 Third, we used two national
datasets to estimate the impact of reducing smoking 38 and
obesity 39 on presenteeism costs. Because there is
no literature on the impact of wellness programs on presenteeism, we
based our projections on the impact of wellness programs on risk reduction
40-41, the documented presenteeism associated cost differences
between high and low risk employees, 42-43
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 Med1985; 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 Med1991; 33(3):338-348.
- Golaszewski T, et al. A benefit-to-cost analysis of a work-site health promotion program, J Occup Med1992; 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. J Occup Environ Med. 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. J Occup Environ Med. 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. J Occup Environ Med. 2003 Feb;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.
- Nyman JA, Abraham JM, Jeffery MM, Barleen NA, The Effectiveness of Health Promotion After 3 Years: Evidence From the University of Minnesota. Medical Care: 2012;59(10):772-778.
- Edington DW, Burton WN. Health and productivity. In: McCunney, RJ: A Practical Approach to Occupational and Environmental Medicine. Philadelphia: Lippincott Williams, Wilkins. 3rd ed. 2003:140-152.
- 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.
- Annual Smoking Attributable Mortality, Years of Potential Life Lost, and Productivity Losses - United States, 1997-2001, JAMA, 2005;54:625-628.
- Ricci JA, Chee E. Lost productive time associated with excess weight in the U.S. workforce. J Occup Environ Med. 2005:1227-1234
- Aldana S, Barlow M, Smith R, Yanowitz F, Adams T, Loveday L, Merrill RM. A worksite diabetes prevention program: two-year impact on employee health. AAOHN J. 2006 Sep;54(9):389-95.
- Aldana SG, Greenlaw RL, Diehl HA, Salberg A, Merrill RM, Ohmine S. The effects of a worksite chronic disease prevention program. J Occup Environ Med. 2005 Jun;47(6):558-64.
- Burton WN, Chen C, Conti DJ, Schultz A, Pransky G, Edington DE. The association of health risks with on-the-job productivity. J Occup Environ Med. 47(8):769-777.
- Tsai, SP, Wendt JK, Ahmed FS, Donnelly RP, Strawmyer TR. Illness absence patterns among employees in a petrochemical facility: Impact of selected health risk factors. J Occup Environ Med. 47(8):838-846.
We created the WellSteps ROI calculators
to help you better understand the impact of worksite wellness programs
on health care costs, absenteeism, and presenteeism. Health care costs
include all expenses associated with the provision of health insurance
to employees. Absenteeism costs include payroll costs during the time in
which no production occurred plus the cost of temporary replacement
workers. Presenteeism costs include reduced and lost productivity on
the job due to any number of factors. Poor health is one of the
major drivers in each of these three employee related costs.
These calculators are easy to use. Just
start by entering 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
over the past few years. If you aren't sure, the national average is
the default. For the presenteeism calculator, also enter the percentage
of your employee population with at least one chronic disease risk factor
including things like smoking, physical inactivity, poor diet, high
cholesterol, high blood pressure, etc. If you don't know, a default
value (60%) based on two very good sources of data, is already entered
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. A reduction of 10% is a realistic
number for both. So for example, a wellness program could reduce obesity
from 33% to 30% - a 10% reduction.
Finally, click the calculate button.
Your data are used to produce outputs located at the top of this page.
The first is projected costs. This is a 6-year projection of your cost
trend. We call it the "Cost of Doing Nothing." You can also
see the projected cost savings of weight loss and reduced tobacco use.
Our favorite output is the impact of wellness programs. Here you can
see the potential impact on your cost trend if you start a wellness
This calculator is based on the best available science. Click the Science tab to get the scientific rationale. We believe that each 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 each calculator and see how your employee health can really impact the bottom line.