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Health Affairs is the leading journal of health policy thought and research. The peer-reviewed journal was founded in 1981 under the sponsorship of Project HOPE, a nonprofit international health education organization. Health Affairs explores health policy issues of current concern in both domestic and international spheres.
In the February 2010 edition, research relating to the savings associated with worksite wellness programs was published. The research in question was conducted by Catherine Baicker, a professor of Health Economics at the School of Public Health, Harvard University; David Cutler, a professor of Economics at Harvard University; and Zirui Song, a doctoral candidate at Harvard Medical School. The significance of this research is that it was conducted at Harvard University, one of North American’s great centres of learning and research. Secondly, the researchers confirmed that for every dollar invested in wellness programming, a $2.73 US return on investment was realized as a result of reduced absenteeism.
Though the effects of employee wellness programs on health benefit cost savings differ depending on health-care system and calculation methodology, absenteeism and presenteeism remain significant cost factors that are common to all organizations regardless of size, industry or whether or not the business is in Canada or the United States. Research has shown that the costs of presenteeism surpass those of absenteeism. In addition, the combined costs of absenteeism and presenteeism are thought to be approximately double the total costs of health benefits. The ROI figures related to absenteeism in the Baicker et al. article are simply based on the product of days lost and average hourly rate and indicate noteworthy ROI figures.
The Canadian experience with regard to ROI has been more difficult to quantify due to the obvious differences between U.S and Canadian health-care design. In addition, the workplace does not typically provide an optimal controlled environment in which to implement a quasi-experimental study. For instance, there are several factors that are difficult to control (e.g. turnover, participation, motivation, benefit plan design). It is also challenging to confirm internal validity or the specific impact that wellness has on cost changes and health improvements without reliable tracking methods or use of a control group (treatment vs. non-treatment). Despite these challenges however, the article by Baicker et al. demonstrates that achieving positive ROI is feasible, despite study design elements. For instance, publications outlining non-random designs with unmatched pre and post data resulted in outcomes that are just as persuasive as those with random group assignment with matched pre and post data; a design that typically holds more water than others (ROI’s of $2.38 and $3.36 for these two designs respectively).
The way in which ROI is calculated is dependent on program design and data collection methods. Since these variables are not consistent for every organization, it is difficult to apply a common methodology for calculating ROI. Additionally, the reality of rising health-care claims makes ROI a moving target. However, if the focus is shifted to slowing the growth of expenses (curbing upward trending), reducing employee health risks, robust absenteeism and productivity measurement, and implementing comprehensive wellness programs, organizations will be better able to calculate ROI figures that are realistic.
Written by Ed Buffett,President & CEO, Buffett & Company
& Sarah Abdelnour, Research & Quality Control
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