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Wellness ROI Survey: Mixed Results

Posted Sep 11 2008 10:04am
A new survey of 376 employers in Southeast Michigan found that while many companies see value in employee wellness programs, they can’t always put a dollar figure on it.

According to the report from McGraw Wentworth, a Troy-based employee benefits firm,
  • 43 percent of companies felt wellness programs offered some value
  • 14 percent said they could identify a specific ROI of their wellness programs
  • 4 percent of employers felt costs exceeded savings.
Still, a related article in Crain’s Detroit Business highlighted some very nice examples of local employers who have achieved positive, quantifiable results from wellness programs.

Take St. John Health in Warren, whose wellness program initially worked with 1,000 employees who were identified as having high-risk medical conditions, and saved the seven-hospital system 62 percent on medical costs—a whopping 3-to-1 wellness ROI. (The program was later expanded to all employees, with similarly great returns.)

On the other side of the coin, however, the article notes that some companies are scared off by the fact that the financial payoff from a wellness program can take at least three years.

It also cites a statistic that claims 10 to 20 percent of companies drop such initiatives during the first year, because they don't get immediate benefits.

But there’s also a great reminder in the article not to be penny-wise and pound-foolish:
During the first year of its wellness program in 2004, Co-op Network, a Southfield-based credit union service organization, saved $22,833 in health care costs for a 162 percent ROI," said Michele Langley, Co-op's manager of human resources…
While the program saved money and was popular among employees, Langley said, the company terminated the program in 2006 for budgetary reasons.

“We noticed absenteeism and health plan costs went up in 2007. I would like to bring the wellness program back,” she said.
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