Demonstrating Wellness Program ROI

wellness program roi

PATTY MURPHY
HNI Health Care Consultant

Wellness programs have become prevalent in mid-sized to large organizations and are a critical component of strategies to improve the long-term health of your population. According to the Kaiser Family Foundation, 74% of employers who offer health benefits now have a wellness program.

Yet only 23% of companies report tracking the ROI of their programs. The result is a missed opportunity to leverage powerful data for improving employees' well being and your bottom line — not to mention making a case for expanded resources for your wellness program.

Why Aren’t More Employers Tracking ROI?

It’s pretty obvious that healthy employees cost you less. But the reason why more employers aren’t tracking ROI is simple: it’s really difficult to nail down hard dollar savings.

Wellness programs are designed to make employees healthier — so how do you quantify the value of something that DIDN’T happen as a result of your efforts? It’s hard to tout dollars saved because of that heart attack that never took place.

It’s also a challenge to claim a cause and effect relationship between the wellness program and the impact on health care costs. As a recent SHRM article put it, “Unlike lab rats, employees can’t be randomly assigned to treatment and control groups in a sterile environment where even the white-coated lab technicians don’t know which group the rat is in.”

When costs go down, do you thank the wellness program? Maybe. When costs go up, does that mean you didn’t drive the wellness message home? Not necessarily. These issues are even more challenging in companies and industries with high turnover rates — where the employee population a year later is largely different than the one you started with.

Why Quantifying the Impact of Your Wellness Program is Important

Although there are certainly barriers to tracking hard dollar savings of a wellness program, quantification is still vitally important. If you can use data to identify areas where your wellness program can have the greatest impact, you can tailor your plan accordingly and improve results. No measurements means you won't get better in any strategic way!

Being able to make a strong case for your wellness program can drive improved engagement — both in terms of buy-in from leadership and employees you’re asking to participate. Being able to tout dollars saved, or a wellness success story can go a long way to add credibility to your program.

5 Data-Driven Ways to Demonstrate the Return on Your Wellness Program

Even if you can’t pinpoint the value down to the penny of your efforts, you CAN use data for more focused decision making and to demonstrate bona fide, quantifiable results. The following are a few of the ways you can focus on the numbers you need to improve your program and make case case for continued investment in the program.

1) Put Biometric and Health Risk Assessments Data to Work

Many companies already use biometric and health risk assessments. Bring this data to the forefront, and chart your company’s progress as a whole with biometric numbers over time — and make this information highly visible to employees. Be transparent about what’s going on and how that impacts your company’s costs. For example, how much do you spend on:

Mental health care?
Chronic illness?
Acute (ER) care?
Other categories unique to your firm?

Quantifying the current state and overall trends takes away some of the fuzziness around WHY the program is important in the first place.

2) Focus on Time-Delimited Programming to Target Specific Health Conditions

Use the results of your biometric screenings to focus your wellness activities more effectively. Wellness activities should be tailored to urge employees to change their behavior in a way that impacts your risk factors. When implementing a new program/campaign:

Set a program goal
Set a timeline for completing the goal
Establish program activities and related benchmarks (with opportunities for measurement)
Communicate the program to targeted employees and execute
Track data points related to the program for ROI calculation

By clearly specifying the goal of a particular activity and assigning a fixed period of time, your results will have more credibility. For example, if your autumn walking program had the stated goal of driving employee weight loss, and the average participant lost 5 pounds, it can more easily be attributed to the program vs. external influences and factors.

3) Benchmark Overall Health Participants vs. Non-Participants

A very way to isolate the long term results of a wellness program is to compare the overall health of participants to non-participants. If participants are trending in a different or more positive direction than the larger group (both in terms of cost and biometric results) there is a strong indication that the wellness program is doing its job.

4) Benchmark Plan Performance Against Trend

Look at how your costs and the health metrics of your company compare to others in the broader marketplace. HNI uses the Kaiser Family Foundation and other sources to benchmark plan performance, but there are other studies as well that can help you see how you’re performing against others in your industry, others in your geography, and the market as a whole.

5) Ask Employees What They Got Out of the Program

Give employees actionable steps and tools for measuring their individual successes throughout the course of wellness program. Ask (or incentivize) them to share things like pounds lost, steps walked, chronic conditions they were able to manage, and the like.

Don’t underestimate the value of anecdotal ROI. Employee success stories can be invaluable in promoting the program to others and showing that what you’re doing is working. For example, if an employee quits smoking as the result of your program, it may not hit your bottom line immediately, but there is definitely a positive impact to their health — and that is a story worth sharing with other.

Use More Data to Show ROI … But Accept That Your Numbers Will Never Be Bulletproof

Just because you can’t claim unequivocally claim a hard dollar savings doesn’t mean that you can’t quantify and demonstrate the impact that your wellness program is having. Use data to demonstrate rationally to employees and leadership why wellness is worth the investment.

Using the data you do have the ability to track can help you uncover powerful indicators that your program is having a positive impact on employees’ lives and your company’s bottom line. Thoughtful record keeping, strategy, and tactics will let employers know — without a doubt — that there is a payoff for wellness programs!