Case Study 2: A Cost-Benefit Analysis of Worksite Health Promotion Programs

K. Baicker, D. Cutler, and Z. Song, “Workplace Wellness Programs Can Generate Savings,” Health Affairs (2010) (see publication for references).

Introduction

Because of significant annual increases in healthcare costs and spending, multiple stakeholders, especially employers, have expressed growing interest in identifying HP-DP programs that improve worker health, reduce absenteeism, and lower employee healthcare costs. Systematic reviews revealed that most EHP evaluation studies lacked an adequate comparison or control group. They were not able to account for possible unobserved variables or alternative explanations responsible for observed differences in costs between participants and non-participants. Most employee health promotion (EHP) evaluations were not able to attribute observed differences to the HP program. The primary threat to internal validity was selection bias. The healthiest employees were most likely to enroll in voluntary wellness programs.

Reviews also confirm that most methods used by employers to calculate costs and benefits of health-related investments may not reflect valid estimates of program impact. Because of multiple deficiencies, past reviews have indicated that there is limited evidence of the efficacy of EHP programs (poor internal validity) and the reported results cannot be generalized to comparable worker settings (poor external validity).

Purposes

This study conducted a meta-analysis on effectiveness, costs, and savings associated with employer-based wellness promotion programs and policies. Eligible studies were screened for analytical rigor, and standardized estimates of ROI from those studies were calculated. This review included only evaluation studies for which there was a comparison group. Effectiveness of health program interventions and impact on healthcare costs and absenteeism were documented.

Methods

A literature search from peer-reviewed meta-analyses of employee wellness programs produced a sample of > 100 peer-reviewed studies of employee programs spanning the past three decades. Analyses were restricted to evaluations that met the following criteria: (1) well-defined intervention; (2) well-defined E and C group, even if the comparison (C) group was not randomly assigned; and (3) presented analysis of a distinct new intervention, rather than analysis of an intervention examined in one of the other studies. Applying these criteria reduced the sample to 32 original publications. These studies are listed in the report. A uniform wage rate was used to define comparable estimates of ROI associated with reduced workdays lost.

Results

This meta-analysis confirmed that 90% of the health promotion programs were implemented in large firms (> 1000 employees). Information in Table 6.5 identifies the typical methods provided to the employees and the primary risk factors: weight loss/fitness and smoking.

Table 6.6 presents a synthesis of the average impact on costs, average savings, and impact on absenteeism of the health promotion interventions, and average return on investment (ROI). Absenteeism was monetized using an average hourly wage for 2009 of $20.49.

Discussion

This systematic review and meta-analysis and cost and economic analysis of the 36 evaluation studies presented strong and consistent evidence for the cost-benefit of employee health promotion (EHP)

table 6.5 Characteristics of Worksite Wellness Programs Studied*

method of delivery

percent of FI rms

Health risk assessment

81%

Self-help education materials

42%

Individual counselling

39%

Classes, seminars, group activities

36%

Added incentives for participation Focus of intervention

31%

Weight loss and fitness

66%

Smoking cessation

50%

Multiple risk factors

75%

+ source: Author’s calculations based on studies in Appendix Table 1. Available online at http://content.healthaffairs.org/cgi/content/full/29/2/ hlthaff.2009.0626/DC2 Per employee/year, costs in 2009 dollars

table 6.6 Summary of Employee Wellness Studies Analyzed

FOCUS

NUMBER

oF

STUDIES

average sample

average

DURATION

average

SAVINGS

AVERAGE

COSTS

AVERAGE

ROI

E

c

Healthcare

Costs

22

3,201

4,547

3.0 years

$358

$144

2.49

Absenteeism

22

2,683

4,782

2.0 years

$294

$132

2.23

programs. EHP investments produced a $3.27 reduction in healthcare savings for each $ spent, and a $2.73 savings from reduced absenteeism for each dollar spent. The authors acknowledge that the size and characteristics of the company and employee workforce and employee risk status play salient roles in the potential for impact and cost savings. This report is an excellent methodological review of how to evaluate the impact and how to conduct economic evaluations of HP-DP programs for employees and worksites.

 
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