A recent study in JAMA showed that a large workplace wellness at BJ’s Wholesale Club failed to improve employee health and deliver ROI. The study looked at the 32,000-plus employees of BJ’s Wholesale Club and concluded that while the company’s worksite wellness program did lead to higher rates of exercise and weight management, it did not have an impact on health behaviors, clinical markers of health, health spending or absenteeism.

In short, the program and others like it was found to be nice, but not cost-saving. This study doesn’t conclude wellness doesn’t work, just that it hasn’t (so far) in this example. Yet most managers shouldn’t be surprised by that when you look at the entire picture.

ASIS and TOBE matter

As a CEO, I know that any change initiative designed without an understanding of the current process, its risks and costs, and poorly defined improvement goals, is doomed. Successful programs use data upfront to understand the “As Is” (ASIS), and set change goals (the To Be, or “TOBE”) based on what the data shows (analytics), and then build a program to meet those goals. This way a business case can be developed before the project begins, to determine its justification. The initiative should then always be measured along the way, so, if necessary, changes can be made to reach the goals. Only then can a final measurement, like the one presented in the JAMA study, then be conducted to conclude if the project was a success.

It’s not clear whether the BJ’s Wholesale Club wellness program skipped the all important first step — the JAMA study just measured the outcome of a program already in place. Unfortunately, this is exactly how most companies have set up their wellness programs. But they can do better by following these steps.

Know your cost drivers

You wouldn’t expect a computer company to do an excellent job saving money on making computers if they didn’t know the full cost of the components they used. You can’t improve what doesn’t get measured. And yet, so many companies embark on a worksite wellness program hoping to improve their health care spending by helping their employees with diet and exercise. This is always a laudable goal, but it may not be a lever to reduce health care spending. For example, the employer who sees most of their health care costs come from spending on cancer care won’t see savings and ROI from a wellness program focused on enhancing exercise; earlier detection may be the best course of action.

Get to the root cause of the health problem

Such an employer needs to recognize their population’s health risks and actions it can take to reduce them. Then the wellness program can be designed to address those root causes with programs like free cancer screenings or incentives to join a smoking cessation program. Identify the real cost driver and focus on solutions that specifically address it — that’s how you can get real ROI.

Let’s look at a similar example. I’ve known employers concerned about their workforce with a high rate of diabetes. The answer may seem like it is essential to push lifestyle changes on these employees. But maybe if we peel back another layer of the onion at some of these companies, we will find poor medication or checkup and testing adherence among their diabetic employees. They may be eating better but not taking their much-needed insulin or getting regular checkups. In this case, a comprehensive wellness program should also consider a redesign of the prescription drug benefit, and encouragement for routine testing to actively encourage medication adherence.

Keep measuring

Here is another inside tip: the best worksite wellness programs don’t stop when they see results. They measure, measure, and then measure again. Over time, they track data – are more diabetic employees taking their insulin, getting their A1C tests? What other programmatic changes/incentives can be provided to continue to boost the adherence rate?

Focus on “moving the middle”

But even those programs that identify their employees’ health risks, measure and focus on the root causes don’t always see ROI or improved employee health. A key component of successful worksite wellness programs is a deeper understanding of the behavior you can change, and the behavior you can’t. As a general rule in an employee population, 20 percent of employees are already evangelical about their health. They eat healthily and see their primary care physician regularly. Twenty percent will never change. This is the group that may end up with multiple chronic conditions and massive impact on your spending. Worksite wellness programs probably won’t move this crowd; you are better off working with chronic disease management programs.

So the key is focusing on the health risks and opportunities among the 60 percent of the members who fall in the middle. What are their major health care spending drivers? What are the root causes of these health issues? Then you can tailor your wellness program accordingly. For this “middle of the bell curve” crowd, I’ve found that additional support – like health coaches — can drive behavior change.

Don’t neglect the silent members

Finally, it is important to note that in any employee population, there is often a subset of members who are frequently overlooked. We call these the “silent members.” They have had no significant health costs over the last few years because they have not been in to see a doctor. That also makes some of them a ticking time bomb. Without that annual mammogram, they are dangerously close to a late-stage breast cancer diagnosis, for example.

When we look at the ROI of worksite wellness programs, we often don’t calculate the long-term cost of these “silent members.” We assume that because they cost nothing last year, they don’t warrant investing in this year. We have to look at the statistical probability they will have significant health care costs in the coming years, and then tailor programs that address their risks. This also means that the ROI calculation is a long term game. It isn’t something that we can measure well year to year.

The JAMA study was no surprise—far too many worksite wellness programs don’t deliver ROI, which is why this “debate” continues. But wellness programs can deliver on their promises when employers start by analyzing their costs and get smart about their wellness program construction. They must then measure it on a regular basis, and meticulously recalibrate the program mid-stream, for the long term.

Jim Pritchett is CEO of DHS Group.

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