Common sense suggests that sprawling out on the sofa andbinge-watching “The Walking Dead” while plowing through endlessbags of potato chips and super-sized, sugar-laden sodas has got tobe less healthy than, say, knocking off a couple of miles on atreadmill. For administrators of corporate wellness programs,however, proving the link between good health and lower corporatemedical bills has proved, well, elusive.

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Which is a problem, because according to a report published lastyear by the RAND Corp.—“The Workplace Wellness ProgramsStudy”—slightly more than half of U.S. companies with more than 50employees offer workers some sort of wellness program. And whilemost of these companies were certain that their wellness plans“reduced medical costs, absenteeism and health-related productivitylosses,” only about half the organizations had ever formallyevaluated their wellness plans. Of those that had, only 2 percentreported actual cost savings.

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Return on investment, of course, is what gets obsessed over bothto justify and to reject implementation of corporate wellnessprograms. Citing a number of peer-reviewed studies, the Society forHuman Resource Management found that wellness programs returned anROI ranging from 3.27:1 to 6:1 over a three- to five-yearperiod.

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The formula to calculate ROI is easy, notes SHRM. Simply dividethe amount saved as a result of the program by the total costs ofimplementing the plan. The savings are expressed as a ratio. An ROIof 3.27:1 means that for every dollar spent there's a savings of$3.27.

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Simple, right? Well, not exactly.

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A 2012 study of Pepsico's wellness program found that afterthree years, the company's disease-management efforts (aimed attreating chronic illnesses vs. encouraging healthier lifestyles)returned an ROI of 3.78:1. Meanwhile, incentives offered by thecompany to encourage employee lifestyle changes did not result inlower corporate medical bills. A 2010 study of the University ofMinnesota's wellness program revealed similar findings, andconcluded that the overall savings were lower than the costs of theprograms.

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All of this explains, as the RAND report noted, why “manyexperts even question whether an organization should look atROI.”

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Total Wellness, a health care consultant based in Omaha, Neb.,agrees, advising clients to consider the following criteria beyondhard cost savings alone when evaluating the success of a wellnessplan:

  • Utilization by employees;

  • positive feedback from employees;

  • reduction of overall health insurance costs;

  • overall improvement in employee satisfaction;

  • requests for additional programs;

  • reduction in sick days and absenteeism;

  • employees likely to recommend the program.

Initial challenges

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Of course, whatever does get measured demands a warm bodywilling to be scrutinized. Persuading employees to engage in awellness program is always the first challenge of any plan. Mostprograms generally start with a health-risk assessment that seeksto isolate particular medical issues: body fat, high bloodpressure, diet, exercise, cholesterol and smoking, for example.

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And that's where the resistance usually begins. Many employeesare concerned about privacy and deeply suspicious about how theirpersonal medical information might be used—usually againstthem.

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There's no shortage of example of this.

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In 2012, Citizens Medical Center, a Texas hospital, had a policyof not hiring anyone with a body fat index (BMI) of more than 35,meaning that a 5-foot-10 individual weighing 245 pounds need notapply. (BMI measures body fat using a person's height and weight,and experts have concluded that it's not a particularly accurategauge.)

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In 2006, the CEO of Scotts Co. hoped to reduce corporate healthcare costs by instituting a strict policy forbidding employees fromsmoking—on or off the job. Scott Rodrigues, a new hire of the lawncare company and still on probation, was fired when a routine drugtest revealed nicotine in his urine.

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Countless stories like these over the years have left manyemployees to wonder whether wellness is being done “for them, or tothem.”

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“Employers must be clear that personal data will be keptconfidential,” stresses Joan Benz, founder of Benz Communications,an employee benefits specialist. “By really addressing thishead-on, companies can get over one of the barriers that stopspeople from participating.”

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Addressing the question head-on might include informingemployees of their privacy rights under the federal HealthInsurance Portability and Accountability Act, which governs the waymedical information can be used and disseminated.

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Money talks

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Many companies approach the task of softening employeeresistance in a more old-fashioned way—with money.

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Nearly 70 percent of U.S. companies that offer wellness plansresort to cash, the RAND study found. Employers dangle monetaryincentives for filling out health assessments, losing weight,quitting smoking, reducing blood pressure, exercising, even eatingmore fruits and vegetables. Reductions in insurance co-pay premiumsare also common. Besides money, there are a host of “novelty” andcreative approaches such as gym memberships, massages, yogaclasses, T-shirts, coffee mugs, tickets to local events and giftcards.

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Ralph Harik and his brother Georges, for instance, co-foundersof imo, a 20-employee Silicon Valley social networking company,offer employees treadmill desks, custom Nike running shoes, evenmembership in a concierge physician's group that makes housecalls.

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While incentives, monetary and otherwise, certainly add to theoverall cost of a wellness program, their use naturally raises thequestion of ROI.

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But there may be better metrics to watch.

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Wellness perks show that we care about our employees, says imo'sRalph Harik. And healthier employees, he's convinced, tend to bemore energetic and enjoy coming to work, which translates intogreater company loyalty and higher productivity.

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While this might seem a touch touchy-feely, consultant TotalWellness also encourages companies to consider some of the lessconcrete, though equally significant, benefits of a wellnessplan.

  • Healthier employees are more productive: Obese employeesexperience higher levels of absenteeism due to illness than normalweight employees.

  • Attracts the best employees: Corporate wellness programsshow a company's commitment to its employees, and can be a draw fortop talent to join or stay.

  • Increases life expectancy: On average, every minute ofexercise can extend a person's life by 1.5 to 2 minutes.

  • Keeps employees emotionally healthy: Regular exercise isa great way to reduce stress and feelings of depression andanxiety, which very likely increases productivity.

  • Boosts energy levels: Employees that exercise regularlyare more alert during work hours and they are less likely to gettired during the workday.

And that, perhaps, may be the way to embrace wellness programsbeyond ROI.

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Employees who are healthier, who are mentally and physicallyresilient, who stay out of the medical system because they don'tneed hospitals and doctors, are simply going to be more productiveworkers—and, for those who still that ROI booster shot, probablycheaper to insure over the long term.

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As the RAND survey concluded, “Whereas significant reductions inhealth care cost may take time to materialize … well-executedprograms appear to improve employee health meaningfully.”

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