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A New Trend in Wellness

When it comes to determining the return-on-investment from wellness, a growing number of companies appear to be looking at factors other than medical-cost reduction.

Monday, September 8, 2014
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Determining the return-on-investment from wellness programs has never been easy. One of the trickiest tasks is deciding what, precisely, to measure: Should it be reductions in medical costs, lowered health risks for employees or reduced absences and increased productivity?

The results of the latest Working Well survey from consulting firm Buck Consultants at Xerox suggests the latter category is ascendant.

"We're seeing spikes of 15 percent to 30 percent, globally, in the number of companies that are measuring [wellness] outcomes in areas such as safety, productivity and reduced absences," says Dave Ratcliffe, a principal at Buck Consultants. "There's more to wellness than just risk reduction -- you get increases in morale, engagement and productivity."

The survey is based on responses from approximately 1,000 organizations in 37 countries. It finds that 65 percent say wellness programs are extremely or very important for attracting and retaining employees.

"Workers' wellness is now viewed as a state of well-being across the spectrum of health, wealth and career" compared to 2007, when New York-based Buck Consultants first began the annual survey, says Ratcliffe. The 2007 survey found that wellness programs were focused mostly on basic health-promotion activities, he says.

Even companies located in countries that haven't experienced the jump in healthcare costs over the last two decades that the United States has are investing heavily in wellness programs, says Ratcliffe. Those companies tend to be more interested in boosting productivity and reducing absences than their U.S. counterparts, although American companies are showing increased interest in those measures, he says.

"A majority of companies still feel they have to speak to medical-cost trend, but I think there are a growing number of companies that feel focusing principally on the cost trend is missing the point," says LuAnn Heinen, vice president of the Washington-based National Business Group on Health. "A few companies -- the brave and the profitable -- are saying they're no longer going to be looking at cost trend at all."

Companies with multiple locations have found that those with the highest adoption rate of wellness programs tend to have fewer and less-costly workers' compensation claims, she says. Organizations that operate multiple call centers have found that the ones with the strongest health-and-productivity programs have fewer dropped calls and better customer-service outcomes, adds Heinen.

Assessing employees' "well-being," a more holistic view of wellness than just the traditional measures of physical health and medical-cost reductions, will give organizations greater insight into the overall health of their workforce, says Janet Calhoun, senior vice president of strategy, innovations and solutions at Franklin, Tenn.-based disease-management firm Healthways.

"Factors such as social health and financial health are major contributors to peoples' utilization of healthcare," says Calhoun.

Since 2008, Healthways has partnered with research firm Gallup Inc. on the Gallup-Healthways Well-Being Index, which collects and assesses data from all 50 U.S. states to shed light on what contributes to peoples' ability to be productive and have low medical-claims costs.

The data that's been collected since then shows that well-being is comprised of five components, says Calhoun: Purpose, financial, physical well-being, social and community.

"Purpose" refers to whatever motivates people to get up in the morning, while "social" refers to the connections a person has within and outside the workplace, says Calhoun. "Community" is the extent to which a person feels connected to where they live and whether they have safe places in which to exercise, good access to healthcare and other factors, she says.

The WBI data reveals that people who score well in areas such as social and financial are more likely to be healthy and productive than those who do not, says Calhoun.

A study titled "Comparing the Contributions of Well-Being and Disease Status to Employee Productivity," co-authored by Healthways' chief science officer and published earlier this year in the Journal of Occupational and Environmental Medicine, finds that employees' well-being is a "more important contributor to on-the-job productivity than their chronic disease status."

The two-year study tracked the well-being of approximately 2,600 employees at three different companies. Researchers divided the employees into two groups: Those who had no chronic conditions and those with diabetes. Over time, employees who scored highly on the well-being index demonstrated higher levels of productivity, regardless of whether or not they had the disease. The study also found that changes in well-being had a greater impact on productivity than could be explained by individual factors such as disease status, age, gender or socioeconomic status.

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Although an employer's role in addressing factors such as social and community well-being and purpose may not be apparent, there are actually many things it can do, says Calhoun.

"Companies can boost employees' community well-being by letting them take paid time-off to volunteer at their children's school or at a local charity," she says.

HR can help employees improve their social well-being by letting them invite friends and family to participate in online challenges aimed at improving physical health, such as walking programs or healthy eating.

This sort of approach can lead to progress on multiple fronts, says Calhoun.

"Two-thirds of health-claims costs come from dependents, not employees," she says.

However, messaging will greatly affect a program's chances of success, says Steve Samples, Healthways' vice president of market operations.

"Employees have to feel that their company has a positive intent in doing this -- that it's actually concerned about employee health and well-being rather than just cost-reduction," he says.

Having company leaders deliver a consistent message around the importance of well-being via town-hall meetings and newsletters and modeling the behavior themselves will go a long way in overcoming potential distrust, says Samples.

"It's probably not sustainable for employers to keep paying people to take health-risk assessments," says Calhoun. "But when you move the conversation to, 'This is about the well-being of our organization and the sustainability of our business,' there's some real intrinsic motivation there for employees."

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