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Proving the ROI of wellness programs just got easier

by on
in Employee Benefits Program,HR Management,Human Resources

Every employer seems to be jumping on the wellness bandwagon in an effort to curb health care costs. But it’s always been hard for HR to prove its wellness investment is worth it. Reason: the inability to nail down a return on investment (ROI) on wellness programs.

To measure the health outcomes of wellness programs, employers typically use the results of health-risk assessments to divide employees into low-, medium- and high-risk groups, based on their number of risk factors, such as high cholesterol, obesity or tobacco use. They then track annual changes in risk status.

But it’s often hard to achieve a so-called “controlled environment” to accurately measure results over time. For example, an employee may register significant improvement, but was it truly due only to the wellness program?

Changing participation rates and employee turnover are two more factors that can affect ROI measures.

Frustrated by those facts, wellness advocates, researchers and employer groups are unveiling a host of new ROI tools. Among the most promising:

The Alliance for Wellness ROI, Inc., a nonprofit coalition of five large employers, is aiming to standardize how wellness benefits are defined. It currently counts 12 criteria. And it launched an ROI valuation methodology for wellness programs this summer.

Learn more at www.roiwellness.org (click on “Wellness ROI Modeler”).

The National Committee for Quality Assurance (NCQA), a nonprofit that certifies and accredits health care organizations, plans to roll out a new quality measure for the wellness industry by early 2009.

The group is establishing a grading system for providers. Many employers rely on providers to administer and analyze the results of their wellness strategies. Because NCQA intends to create standard definitions, wellness ROI may be easier to compare across organizations. Go to www.ncqa.org for details.

The Wellness Council of America (www.welcoa.org) recently launched “The ROI Calculator.” It’s a free online tool that uses published studies to project how much a company could save by decreasing the percentage of employees who smoke or who are obese.

The American Institute for Preventive Medicine
(www.healthylife.com) developed the “Wellness Wizard” to help employers identify how many of their employees have health risk factors, such as smoking, obesity, asthma or diabetes. Using government statistics, the tool calculates the extra health care costs a company faces annually due to the risky behaviors. It then estimates the potential savings an organization can achieve if it meets certain health goals by 2010.

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