September 16, 2014
Preventative care costs employers significantly less than treatment: think about the relative cost of helping employees lose weight compared to managing a chronic illness such as type 2 diabetes. As a result, an increasing number of employers are implementing wellness programs that engage employees and get results.
However, creating a successful wellness program often entails a trial-and-error process to find the optimal combination of programs and services, which takes time. And getting employees to participate in the programs and track their progress can be challenging.
Of the options employers have, “outcome-based incentives,” or rewarding employees based on specific benchmarks or goals, have been generally well received by employees. In contrast, penalties such as higher insurance premiums for not meeting fitness goals or continuing a risk-factor behavior such as smoking, have not. Simply put, while employees seem to like carrots, they don’t like sticks.
It’s no surprise then, that by 2017 as many as 76% of employers could have outcome-based incentives programs in place, according to the 2014 Towers Watson Health Care Changes Ahead Survey of 379 midsize to large U.S. employers. Today, 18% of respondents already have them in place, 10% plan to implement them in 2015, and 48% are considering them for either 2016 or 2017.
Still, even though wellness programs are becoming more widespread and more sophisticated, they still have a long way to go.
According to the 2013/2014 Towers Watson Staying@Work Survey, less than half of employers surveyed describe any specific aspect of their health and productivity programs as successful. Employers report little success in achieving goals such as lower cost, fewer employee sick days, and reduced chronic disease and lifestyle-related risks in employee and dependent populations.
One obstacle to quantifying the success of wellness programs is that it takes a long time for a change in behavior to pay off in the form of an employee’s improved health and wellness.
Also, some people are simply healthier than others, meaning the most successful wellness program in the world won’t necessarily help an employee who for example, is genetically predisposed to have heart disease or arthritis.
And finally, wellness programs that target some behaviors work better than others. For example, studies have shown that participants in programs targeting exercise frequency or smoking cessation saw marked improvement, but participants in programs that focus on managing cholesterol levels did not.
So while pinning down ROI for wellness programs is tough in the short term, the potential for long-term health benefits is worth the time investment. For best results, employers are advised to select wellness programs that target behaviors where such programs have proven effective – and implement them with care and patience in equal measure.