Wellness as a business strategy takes proper planning

According to the 2010 National Survey of Employer-Sponsored Health Plans by Mercer, growth in the average total health benefit cost per employee picked up steam in 2010, rising 6.9% to $9,562, the largest increase since 2004. While employers attempted to hold down cost increases by dropping more expensive health maintenance organizations and adding low-cost consumer directed heath plans and dropping retiree medical plans, they have also looked to providing programs and incentives to employees to take better care of their health.

The challenge to employers is determining the right mix of wellness program offerings and incentives. An effective wellness program develops from data gathering, needs and interest assessment and risk identification. Whereas a strategy focusing on condition management and education makes sense for an employer with a workforce that has particular chronic diseases or illnesses, a strategy focusing on lifestyle modifications would be a better fit for a healthy, but aging workforce.

In addition to identifying risks and needs, employers should identify desired outcomes before embarking on a program. Often the wellness program responsibility lies with HR and common Workers’ Comp injuries may be overlooked; therefore it’s important to involve risk managers and supervisors in the formulation of goals for the wellness program.

A recent study of mid-and-large size companies by Fidelity in conjunction with the National Business Group on Health found that companies ranked outcome measurement as their No. 1 challenge, followed by employee engagement and participation. To encourage participation, over half (57%) of companies surveyed use incentives that have a cash value. The most common incentives by an employer are reductions in the employee's health care premium, cash and contributions to a health reimbursement arrangement or a health savings account. One out of five companies (20%) spends more than $400 per employee a year on incentives alone. Almost one-third (29%) spend less than $100 per employee.

Companies are spending almost the same amount of money on programs aimed at prevention and lifestyle wellness (45%) as on programs that manage conditions after the onset of disease or illness (43%). Popular programs in the prevention and lifestyle categories are on-site flu shots (90% of companies offer them), preventive-care reminders related to screenings or annual exams (68%), employee assistance programs (92%), stress management (68%) and smoking cessation (66%). The top condition-management programs are nurse hotlines where nurses are available to answer questions via telephone (79%), diabetes disease management (74%), coronary artery disease, congestive heart failure and asthma disease management (69%).

While wellness programs are quickly becoming a standard employee benefit, the formulation and measurement of objectives and ROI is in its infancy. Those employers that can articulate desired and measurable outcomes will reap the benefits of fewer injuries and a healthier, more productive workforce.