This document discusses strategies for maximizing the return on investment (ROI) of worksite wellness programs. It outlines how wellness programs can generate cost savings through pathways like high risk intervention and risk reduction. While traditional wellness programs often achieve a cost-benefit ratio around 1:6, newer programs that focus more on population health management and require activities can see higher ROIs. The document provides tips for measuring ROI to meet management expectations and strategies for increasing ROI such as expanding economic measures, enhancing risk reduction, and targeting benefit communications. It also addresses common objections to wellness programs and counterarguments.

1. Maximizing the ROI of Worksite
Wellness Programs
Larry S. Chapman MPH
President and CEO
Chapman Institute
Seattle, WA 98155
(206) 364‐3448
LChapman@ChapmanInstitute.net
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2. Agenda
• Potential ROI of worksite health promotion efforts
• Measuring ROI to meet management expectations
• Model of health care utilization
• Major pathways for health cost savings
• Strategies for maximizing ROI
• Objections to WW and counter-arguments
• Summary of main points
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3. Potential ROI of
Worksite
Wellness efforts
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4. Key Terms
Economic Return:
The monetary benefit (savings) associated with a program.
Return-on-investment (ROI):
The monetary benefit (savings) associated with a program
divided by the cost of that program expressed as a percent.
Cost/Benefit (C/B) Ratio:
The monetary benefit(savings) associated with a program
divided by the cost of that program expressed as an integer
and/or a decimal.
Net Present Value:
A commonly accepted way of estimating the time adjusted net
monetary benefit(savings) associated with a program expressed
as a dollar amount.
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5. New Meta-Analysis…
Source: Katherine Baicker, David Cutler, and Zirui Song,
Workplace Wellness Programs Can Generate Savings,
HEALTH AFFAIRS February,2010, 29(2) 1-8.
C/B = 1:6.0
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6. ROI Studies of Wellness Programs
C/B = 1:5.8
• Bank of America
• Blue Shield of CA
• Duke University Traditional
• Citibank
Newer Programs
• City of Birmingham
• Coors Outliers
• DuPont
C/B Ratio
• General Foods
• General Motors
• GlaxoSmithKline
• Indiana BCBS
• Johnson & Johnson
• Life Assurance
• Nortel
• Prudential
• Travelers
• Union Pacific
• Washoe County
Study Number
Source: Proof Positive: An Analysis of the Cost-Effectiveness of Worksite Wellness, Chapman Institute, Sixth Edition, 2007.
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7. Other Factors
• Limited economic scope of
studies
• Few programs use VBD
approaches
• Few direct healthcare
utilization interventions
• Few use “best practice”
incentives
• Few invest in good
evaluation techniques
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8. Measuring ROI
to meet
management
expectations
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9. Changing Management Expectations
• Platform for
integration
• Connect to benefits
• Becoming aware of
the “stakes”
• Expect higher ROI
• Expect measurement
validity
• Expect dashboard
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10. Tips for Measuring ROI
#1 Define economic measures
#2 Compare on “direct” only
#3 Plan on “multiple” time series
#4 Focus on growth rate trends
#5 Use same framework each year
#6 Look for other explanations
#7 Match methods to expectations
#8 Evaluate annually
#9 Compose annual evaluation report
#10 Ask for suggestions for improvement
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11. Model will Affect Outcomes
Population
Program Model Quality of Work Traditional
Health
Life Approach Approach
Management
• Fun activity focus • Mostly health focus • Add productivity
• No risk reduction • Some risk reduction • Strong risk reduction
• No high risk focus • Little high risk focus • Strong high risk focus
• Not HCM oriented • Limited HCM oriented • Strong HCM oriented
Main Features • All voluntary • All voluntary • Some required activity
• Site-based only • Site-based only • Site and virtual both
• No personalization • Weak personalization • Strongly personal
• Minimal Incentives • Modest Incentives • Major Incentives
• No spouses served • Few spouses served • Many spouses served
• No evaluation • Weak evaluation • Rigorous evaluation
Primary Focus Morale-Oriented Activity-Oriented Results-Oriented
Source: Chapman, Planning Wellness, Chapman Institute, 2008, p. 213. (available on Amazon.com)
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12. Reasonable Expectations?
Usual Outcomes:
• 45% to 95% participation
• 10% to 35% increase in
behavior change
• 2% to 12% reduction in risk
prevalence
• 17% - 28% reduction in sick
leave
• 0% to 47% reduction in per
capita health costs
• 15% to 25% reduction in per
capita health cost trends
• ROI = 1:1.7 to 1:7.4
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13. Model of health
care utilization
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14. Factors that Healthcare Utilization
Demand-Side Factors Supply-Side Factors
Supply-Side Factors (inside the individual) (outside the individual)
(outside the individual)
Age* Regional or local
Extent and scope of Gender practice patterns
insurance coverage*
Provider incentives
Point-of-use cost Sense of affecting diagnosis
Personal
sharing* responsibility health and treatment
for personal behavior* decisions*
Geographic access
health*
to services
Clinical risk Attitudes
factors* about
Current personal
morbidity* health and
* = Potentially modifiable. health
Self-efficacy* care
use*
Source: L. Chapman, 2008
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15. Major pathways
for health cost
savings
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16. Pathways to Health Cost Savings
• High risk intervention
• Medical self-care
• Consumer health skills
• Early detection
• Risk reduction
• Targeted follow-up
• Disease/condition management
• Injury prevention
• Treatment decision support
• Point-of-use cost sharing
• Comparative price information
• Comparative provider information
• Avoiding iatrogenic risk
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17. Strategies for
maximizing
ROI
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18. Key Strategies for Increasing ROI
#1 Expand economic measures
#2 Enhance risk reduction/mitigation
#3 Move to PHM program model
#4 Include spouses
#5 Require an annual HRA
#6 Target benefit communications
#7 Provide medical self-care and
Consumer health education
#8 Address injury prevention
#9 Use coaching intervention
#10 Use multiple Wellness criteria
Source: Chapman, L., Health Cost Management Strategies for Health
Promotion Programs, TAHP, 2002, Jan/Feb 5(6), p. 12.
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19. Key Strategies for Program Effectiveness
• Ongoing methods for raising
awareness
• Ability to enhance motivation
• Opportunity to learn new skills
associated with new behavior
• Opportunity to practice those
new behavioral skills
Source: O’Donnell, M., A Simple Framework to Describe What Works Best: Improving Awareness, Enhancing Motivation, Building Skills and
Providing Opportunity, The Art of Health Promotion, American Journal of Health Promotion, September/October, 2005, 20(1):1-12
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20. Issues Effecting Wellness Program ROI
“Situation-related” Issues “Implementation-related” Issues
• High risk prevalence • Behavioral targets selected
• Older work force • Program interventions used
• Turnover profile • Number of “touches”
• Greater occupational risks • Quality of implementation efforts
• Measurement methods used • Plan design compatibility
• Economic variables measured • Degree of HCM focus
• Quality of baseline • Incentives used
• Intensity of intervention • Senior management support
• “Generosity” of health plan • Degree of integration
• Years of operation
• Attitudes of employees
• Extent of reach to spouses
• Capital investment level
• Balance of virtual vs. site-based
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21. Use of a “Virtual” Program Infrastructure
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22. Wellness Should be Well Integrated
Management Strategies
Periodic
Unified Regular Staff Prospective
Function and Integration
Administrative Planning Integration
Operational Focused Review
Structure Meetings Points
Review
Before After
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23. Objections to
WW and
counter-
arguments
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24. Worksite Wellness
“Objections” “Counters”
• Too much work • Depends…
• Don’t have the money • How much are you spending?
• How much will you be pending?
• PL 111-148?
• ROI not guaranteed • What is?
• Do nothing and it will get worse!
• Its not our core • Aren’t people part of your core
business business?
• We are too busy • Are your competitors too busy?
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25. Summary of
Key Points
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26. Summary of Key Points
• Wellness is not “rocket science!”
• Wellness just needs the same level of attention that
anything else of value deserves
• You need to spend money to make money
• There are a variety of ways that the economic return
from Wellness programs can be increased
• Determine what you want from Wellness and then do
your homework
• Get ready to have fun!
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27. Larry S. Chapman MPH
(206) 364-3448
Lchapman@ChapmanInstitute.net
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© Chapman Institute, 2010. All rights reserved.