Wellness Programs Showing Their Worth
Indianapolis Business Journal
Schoettle, Anthony
February 17,
2003
Corporate wellness, once perceived as a
warm-and-fuzzy feel-good business practice, is now considered a
bottom-line driver, according to industry experts.
Dramatic growth in corporate-wellness
programs began in the early to mid-1990s when the economy was booming.
Employers struggling to land good workers used the programs as perks to
create a more attractive work environment.
But as the economy began to sag, corporate
wellness gurus found it more difficult to convince businesses they had a
financial interest in preventing their workers' bellies from sagging, too.
"With the recent economy, corporate
wellness did slow a little bit," said Tom Farrington, corporate
wellness consultant for Community Health Network. "It was almost a
knee-jerk reaction. But the spirit now is, 'How can we afford to do
without corporate wellness?...
"The key for companies' decisions
regarding these programs quickly became return-on-investment," agreed
Patty Hollingsworth, director of health promotions for St. Vincent
Hospitals and Health Services.
Though Hollingsworth said the positive
effects could "be seen on the faces" of workers and in their
performance, many corporate chiefs wanted quantifiable proof.
Industry experts said several factors,
including productivity and reduced absenteeism, show the monetary benefit
of corporate wellness. But escalating health care costs are giving those
selling corporate wellness plans a hammer to drive home their point.
"For many companies, employee health
care costs were going up two, three, four times as much as the year
before," said Sally Stephens, president of Indianapolis based wellness
program provider Spectrum Health Systems LLC. "Employers realized
they needed to be proactive."
Stephens said workers need guidance on how
to access their health care plan properly and better manage chronic
conditions or reduce risk factors by altering lifestyles.
Early corporate-wellness programs often
offered blood pressure and cholesterol screenings and flu shots, usually
at the workplace.
As the field matured, more services were
added, including help with medical selfcare, fitness and exercise seminars
and programs, nutrition education, and smoking-cessation programs.
"You have to get people to look at the
bigger picture and you have to offer them a complete wellness
program," said Bill Burgman, National Institute for Fitness and Sport
director of corporate fitness management. "You have to have regular
contact with a work force for these programs to work and you have to get
people to buy into them."
The buy-in is the tricky part.
"You have to look at the psychology of
behavior change," Burgman said. "It's easy to get fit people to
participate. You have to have incentives to get the other people to
participate."
Incentives can be anything from paid time
off to free sporting- or entertainment-event tickets to gift certificates
for participating and achieving stated goals. There is an up-front
investment for employers, including payment to corporate wellness experts,
giving employees time off to participate, and providing incentives.
But corporate wellness experts across the
board said the return on investment is significant. A broadening body of
statistics demonstrates the programs' effectiveness.
According to a study published by the
American Journal of Health Promotions, for every $1 spent on wellness
programs, employers can expect a return of $2.30 to $10.10 through lower
medical claims, reduced absenteeism, improved productivity and other
factors.
"Granted, the return on investment is
a wide range," Farrington said. "But, in almost every instance
when a wellness program is put in place, a return can be demonstrated.
It's critical to give employers monthly, quarterly and annual
reports."
Spectrum's Stevens said her clients
generally see a $3.30 return for every $1 spent within the first year.
"Some programs take three to five
years to fully realize the return," she said.
St. Vincent's Hollingsworth said her
company's clients show at least a 2-to-1 return initially.
Companies in various industries nationwide
report saving millions of dollars due to corporate wellness programs.
* Everett, Wash.-based Providence Health
System showed a company savings of $1.5 million, with $4.24 saved for
every $1 spent over three years, according to company officials.
* Officials for Wilmington, Del.-based
DuPont Co. cited a 47.5- percent drop in absenteeism over a six-year
period for participants in their wellness program.
* Medical claims were 55 percent lower over
six years for employees participating in a wellness program compared with
those not in the program at Grand Rapids, Mich.-based Steelcase Inc.,
according to company officials. That statistic, however, could be
explained by the tendency for healthy people to more readily participate
in the plans.
* Omaha, Neb.-based Union Pacific Railroad,
with mostly union and blue-collar employees, introduced an employee
wellness program after its medical costs soared to $6,000 per employee.
After Union Pacific officials instituted what they called "a modest
wellness program," they reported saving $1.26 million in health care
costs in just one year, more than 50 percent more than they invested in
the program.
* Superior Coffee and Foods, a subsidiary
of Chicago-based Sara Lee, reported the wellness program for its 1,200
employees showed 22 percent fewer hospital admissions, 29-percent shorter
hospital stays and 42-percent lower expenses per admission when compared
with other divisions. Long-term disability costs dropped 40 percent.
* The Canadian Life Assurance Co. found
turnover among wellness- program participants was reduced 32.4 percent
over a seven-year period.
As the proof of corporate wellness
program's effectiveness rises, Stephens said, more Fortune 500 companies
are developing in-house departments to take care of it, while smaller
companies are turning to outside agencies in growing numbers to administer
their programs.
"Even in light of the recent economic
downturn, corporate wellness hasn't really been a difficult sell,"
NIF's Burgman said. "Very good and accurate methods of measuring the
benefits of these programs have been developed. A CEO can see for himself
what's achieved."
(C) 2003 Indianapolis Business Journal. via ProQuest Information and
Learning Company; All Rights Reserved
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