Survey: More Employers Are Embracing Value on Investment for Wellness Programs But Medical Cost Concerns Loom Greater Than Ever

Health and Wellness Survey: ROI vs VOI

According to the recently-released 2015 Willis Health and Productivity Survey, this year will be remembered as a watershed year for employer-sponsored health and wellness programs. Organizations continue to evaluate the need to implement and/or enhance their health and wellness programs as the business demand for such programs grows.

In previous years, organizations have focused on determining program return on investment (ROI): How many medical dollars were saved for every dollar spent on wellness. What is emerging this year are two very distinct mindsets with regard to how organizations approach the measurement of wellness program success.

Value of Investment

ROI vs. VOI

Return on Investment Based (ROI) organizations looked to justify investment in health management and wellness programs purely based on medical cost reduction.

Value of Investment Based (VOI) organizations looked to justify investment in health management and wellness programs based on many factors, including employee morale, worksite productivity, employee absence and workplace safety, in addition to medical cost reduction.

In 2015, survey results indicate for the first time that more organizations are increasingly focusing on the value of investment (VOI) of health management and wellness programs. Employers are recognizing that there is considerable value to a healthier workforce beyond the value of lower medical costs.

VOI-focused organizations embrace a wider set of metrics that include:

  • Absenteeism
  • Worker morale
  • Employee turnover
  • Presenteeism costs
  • Workers compensation
  • Short- and long-term disability
  • Employee loyalty
  • Tenure

Nearly two-thirds (64%) of employers with wellness programs were more “value-of-investment-focused versus 28% of respondents who were more “return-on-investment”-focused.

More organizations are realizing that the expectation of an immediate return on investment (ROI) for their wellness programs through medical cost reduction may be unlikely. Worksite wellness requires a sustained effort, including annual program review and long-term program management. Companies who adopt a true culture of health are better positioned for increased profitability in the long run.

How VOI Employers Differ from ROI Employers

Employers who described themselves as more VOI-focused were:

  • More likely to value “building a culture of health” (66%) than organizations with an ROI focus (51%);
  • More likely to value building teamwork and morale (48%) than organizations with an ROI focus (25%);
  • More likely to be concerned about improving productivity with their health management programs (51%) than respondents from organizations with an ROI focus (40%).

Wellness programs across the board appear to be more entrenched in employer strategies.

  • Most organizations with wellness programs (58.5%) have had their program in place for three or more years;
  • Forty-three percent (43%) of organizations with wellness programs view their program as “Comprehensive” or ”Intermediate” in terms of program maturity.

Increased Concern About Medical Costs

Willis_Health-and-Productivity_2015

Read the entire Willis Health and Productivity Survey Report

This year, half of employer respondents (50%) said that they were “more concerned about medical costs in the next three years, than in the last three years.” Only 2% said that they were less concerned about medical costs.

With a projected increase in medical trend in 2016, and the looming Cadillac Tax in 2018, the business imperative to lower medical costs will continue to be a top priority. In fact, the 2015 Willis Health and Productivity Survey suggests more employers are broadening their strategies beyond the scope of traditional wellness, and are using more focused, data-driven solutions to achieve sustained cost reduction. Some of these solutions include telemedicine, patient advocacy, specialty case management, expert opinions and cost/quality transparency.

Some other notable findings include:

  • 27% of respondents reported their wellness program was “Partly” or “Entirely” funded by their medical carrier;
  • Only 35% were satisfied with participation in their wellness programs;
  • Only 25% were satisfied with the business impact of their wellness programs.

Methodology

Willis conducted its ninth annual Health and Productivity Survey from May through June 2015. The study asked employer organizations about health management and wellness program design, challenges, priorities, incentives, medical costs, and health and program evaluation.

The survey was delivered to employer-based respondents electronically. All United States-based organizations were eligible to participate, regardless of employee size. Participating organizations ranged from fewer than 100 to more than 10,000 employees. Survey respondents included organizations from various industries and geographic regions, which provided a comprehensive sample of responses.

The study also tracked many of the fundamentals of employer-based wellness programs, including senior management buy-in, efficacy of communications, utilization of biometric screening and health risk assessments, use and activity of wellness committees and what metrics are being utilized to track success.

 

About Ron Leopold

Ronald S. Leopold, MD, MBA, MPH, is National Practice Leader, Health Outcomes at Willis' Human Capital Practice. He…
Categories: Employee Wellbeing, Health and Group Benefits | Tags: , ,

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