Rebooting Workplace Wellness: Moving Beyond Lifestyle Management to Achieve Real Returns

CEOs are committed to workplace wellness. At the same time, an industry debate about the ROI of workplace wellness programs has called into question the hard returns companies can expect from their wellness investments, which critics claim are a waste of money and do little to lower claims and thus insurance premiums.

The ROI debate misses the real question, however, which is not whether well-designed wellness programs lower employer healthcare costs, but whether wellness programs can reduce claims, lower insurance premiums, and deliver many often overlooked benefits (such as increased productivity) from fostering greater workforce health and well-being.

The core issue centers around one-size-fits-all lifestyle management wellness programs, which seek to minimize employee health risks, primarily through exercise and diet. Though lifestyle management can boost employee morale and productivity and deliver other benefits, these programs do not lead to lower insurance premiums.

“Wellness programs in search of real ROI must go where the claims are.”

This idea is supported by a recent RAND study of almost 600,000 employees at seven companies that shows why disease management—not lifestyle management—is most effective at reducing claims and employer insurance costs. By helping employees with chronic diseases take better care of themselves—for example, by reminding them to take prescribed medications or avoiding missed lab tests—disease management delivered 86% of the hard healthcare cost savings.

When outlaw Willie Sutton was asked why he robbed banks, he replied “because that’s where the money is.” Similarly, wellness programs in search of real ROI must go where the claims are by preventing at-risk employees from becoming chronically ill, and helping chronically ill employees stabilize their conditions.

Because chronically ill employees can account for 50% of a company’s claims cost, wellness programs should enroll them in disease management programs with the goal of lowering unnecessary or avoidable claims. For example, pre-empting 25 unnecessary emergency department visits can easily save $50,000, and preventing four inpatient stays can save at least $100,000, which is not unrealistic for a 2,000-employee company.

Does this mean that employers should scrap lifestyle programs altogether? Absolutely not! Lifestyle management (think weight loss, exercise and quit-smoking programs) serves as the first step toward a workplace culture of wellbeing. And though employers shouldn’t expect lower insurance premiums, lifestyle management programs can boost employee engagements that measurably improve business performance.

Ultimately, companies must create a culture of workplace wellness that infuses every aspect of their organization. Employees must learn to trust the employer’s motives, which requires visible and persistent CEO leadership. Make the costs of coverage transparent, and show employees their projected trajectory in the future absentee change. To be clear, this is about the company’s health and their health.

Given the absence of viable alternatives, it’s time to correct course and double down on workplace wellness. When done right, workplace wellness offers both near and long-term returns and provides an alternative to today’s toxic, zero sum game of reducing health coverage and increasing employee insurance costs. This is an opportunity that cannot be missed, and CEOs must lead it.


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