Friday, January 7, 2011

Does Your Wellness Program Measure Up?

A survey by Buck Consultants shows that only 37% of employers measure the effectiveness of their wellness programs. In the US, 40% say they have looked at how their wellness program affects their cost of delivering health care benefits. From that group, 45% say that their wellness programs have reduced health care costs, most typically slowing the increases in health care costs by two to five percentage points.

If we look at this from a contrarian standpoint, that means that 63% don't seem to care about the effectiveness of their programs, but I guess they are glad that they have them. Do they have them because everybody else does? Are they just certain that they generate cost savings, but don't care how much the savings are? Do the savings outweigh the cost of the program?

Perhaps the problem is that they don't know how to measure the effect on costs. In the alternative, there may still be many who categorize a wellness program differently than others do. For example, do you have a wellness program if it consists solely of smoking cessation assistance? If that's it, how do you measure the savings as compared to the costs? Aren't you really trading short-term costs for longer term savings as it seems to me that more of the additional costs for smokers appear down the road. I guess I could also say the same things about other initiatives.

I've spoken to consultants at several major firms about measuring the savings from wellness initiatives. It's interesting; there is no standard method. Could it be that each firm has a measurement methodology that gives preference to its own style of wellness initiative?

Don't get me wrong. I'm not intending to belittle the value of wellness programs, but the dollars that an employer spends may result largely in savings ... for some other employer. A well-conceived wellness program should probably change the longer-term behaviors, and therefore the longer-term health of covered employees. Look at any large employer. On average, what is the tenure of their employees? Less than it used to be? Long enough for the savings from the wellness program to exceed its costs? Or are they simply passing their savings on to other employers?

I don't know. I don't really believe that anyone else does either. But, I'd like to see some thoughtful people figure this one out.

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