Can wellness programs be cost-effective? It depends on what you value.
Let’s start with what everyone who can access the Internet can find out: there are quite a number of independent articles, analyses, and white papers that say wellness programs have a positive ROI. Most range in the $1.50 to $3.00 (per $1 invested) range. A lot of the papers say, “It depends on the program.” I believe that it depends on your faith in people.
The problem with firm predictive analytics is that based on results you make an investment to reduce the likelihood of a statistically possible (but not guaranteed) future occurrence. Depending upon which side of the line you fall on as it relates to statistical predictive models and how many lives your health plan covers, these models for your potential ROI may mean a lot to you, or they may mean very little.
If you’re paying $48,000 for a program that supports 1,000 people and one less person has a heart attack (statistically, you should have two heart attacks per year in a group of 1,000), the heart attack alone has an average cost of $38,501. The program essentially pays for itself with a single incidence. It’s common sense.
But the “common sense” argument is a bit of a leap of faith, in that you have to trust that some conditions that can be avoided by cleaner living and healthier activity will be avoided. You have to trust, because you’ll never actually see the “bullets” your people dodge as a result of a good program. You have to have a common sense rudder that being active and health-conscious is inherently the right thing to do for your employees. And if you have that basic faith, then independent ROI studies make a lot of sense and will be helpful.
A healthy employee uses fewer insurance dollars, is at work more often, and is more focused and productive than his or her unhealthy counterpart. And other than genetics (and bad cosmic luck), health is derived from our behaviors. Change a person’s behavior, change his or her health. Change a person’s health, change the frequency and quality of their output. As an employer that adds up, and you have a reason to care more about that from a financial point of view than do your employees (although they may still care for personal reasons).
We don’t typically hire based on fitness levels or capabilities. Healthy people don’t automatically make higher salaries than unhealthy people. Yet, the healthy version of any of us will be more productive and less burdensome to employ over time than the unhealthy version.
So the burden falls to you, employer. Financially speaking, an investment in good individual health most meaningfully benefits the entity that pays people for their time.
Mike Tinney is founder and CEO of Fitness Interactive Experience, a health and fitness platform used by companies like Coca-Cola, Methodist Health Systems, and Service Foods.