The Willis Health and Productivity Survey Report, published last October, indicates that for the first time in the nine years the study has been conducted, the majority of firms with wellness plans (64%), say their objectives for these plans are "Value of Investment" (VOI)-based, rather than "Return on Investment" (ROI)-based. In ROI-based wellness programs, as defined in the Willis study, 90% of respondents listed "reducing or containing costs" as their top priority. VOI-based programs listed their top priority as "improving the health and well-being of employees" (90%).

Specific goals for VOI-focused plans are tied to a wide range of productivity criteria, many of which are long-term focused and subjectively measured. These include boosting teamwork and morale, enhancing safety, reducing absenteeism and presenteeism, and building a culture of health.

"The current study results represent a maturing?of the marketplace and a change in expectations for wellness," says Dr. Ronald S. Leopold, Willis practice leader in health outcomes. "Companies are saying 'We do want to lower medical costs, but we recognize that medical cost reductions don't happen overnight. It's a marathon, not a sprint.' Companies that adopt a true culture of health better position themselves for increased profitability in the long run.

"By moving from ROI to VOI, they are starting to see their investment produce a positive effect on morale, employee loyalty and performance," Leopold says.

A long-term wellness culture also can pay dividends in recruitment, Leopold adds. "Notably for companies that hire a lot of Millennials or those in their 20s, wellness programs are known in many industries to be an effective way to attract desirable workers. We see it in Silicon Valley and cities like Austin, Texas, or others with a concentration of technology businesses."

The shift away from an ROI view of wellness objectives doesn't mean that employers' concern about healthcare costs has gone away. In fact, the study showed that roughly half of all employers are more concerned about medical costs over the next three years than they were in the most recent three years. And virtually all the remaining participants said they were "equally concerned."

The survey suggests that employers are attacking these cost concerns by broadening the scope of health data analytics.

"The delivery of wellness programs requires a very structured approach," says Leopold. "It's both a science and an art and requires setting up goals and strategies and agreeing on what metrics are going to be tracked over time. It's a three- or five-year journey for most employers to go from zero to 60.

"At Willis we study medical and pharmaceutical claims using data tools and doing cost stratification … We look at utilization patterns and benchmark those against what we would expect, given the client's industry and demographics. It enables us to get to the root causes of what's going on with an employer's workforce."

The Willis study, available free at www.willis.com, is based on data from more than 700 firms ranging in size from fewer than 100 employees to more than 10,000. It also includes data from some employers without wellness programs to provide a broader view of health management trends and challenges.

The study contains exhaustive data on the various components of firms' wellness plans, costs, participation incentives and how they measure success. Most participating firms in the study (58.5%) have had their wellness programs in effect for three years or longer. The VOI-focused firms reported higher satisfaction with their plans (26% satisfied or very satisfied) than the ROI-focused firms (19.4%).

"We found that the very small companies among the sample firms are every bit as oriented toward value of investment as the very large companies," Leopold notes. "The smaller firms may not have all the discrete metrics to measure cause and effect between their wellness programs and medical cost reductions. But with their smaller workforces, they can have a better sense of what's going on from person to person. They can see that this stuff really does matter to their people."

The most commonly utilized clinical interventions and solutions for the entire sample of wellness programs were Employee Assistance Programs (used by 88%); 24-hour Nurse or Clinical Line (69%); Case Management (59%); Disease Management (55%); and Third-Party Wellness Vendor (41%).

The interventions/solutions category that is likely to grow the fastest, according to the study, is Telemedicine. Currently 30% of respondents have telemedicine capabilities in place, and another 16% are considering doing so.
The leading policies and cultural initiatives among the wellness plan respondents were: Safety and Emergency Policy (84%); Alcohol and Drug Abuse Policy (82%); Tobacco-Free Workplace (66%); and Flexible Work Arrangements (45%).

Among behavioral change initiatives, the leading intervention/solution was Annual On-Site Flu Vaccinations (83%). Three behavioral change initiatives that appear to be strong growth candidates-since they rank highest in the number of firms "considering" implementing them-are Financial Well-Being (currently utilized by 47%); Stress Management (currently 45%) and Emotional Well-Being (currently 38%).

The study covers the use of wellness program incentives, the most popular being general participation-based (used by 72% of firms). Next most utilized are those based on specific health activities, such as physical activities programs (41%); and those contingent on specific health outcomes, such as meeting biometric measures (30%).

Dr. Leopold, a physician with a certification in preventative medicine, says, "The use of incentives is a complicated issue. Do they work in getting people to participate? Absolutely. What we see, though, is that often the incentives attract people who don't need the intervention as much, and don't attract the people who are more resistant to these programs.

"Sometimes too, employers build a system of incentives that is overly complicated and it falls on its own weight. Incentives aren't going away, but employers are looking for ways to use them in a more streamlined and creative way."

Leopold's team of wellness advisors at Willis concentrates on serving firms with 500 to 5,000 employees. "When tailoring a wellness program for clients," Leopold says, "knowing the playing field and the players is important-what you can expect or not expect from a carrier, and what to expect from third-party vendors that are delivering wellness solutions. Every employer has different and distinct needs, and a wellness program involves you deeply in the way a company is run."

The trend toward a VOI-based view of wellness can be good news for brokers who do a thorough job of handling property/casualty and benefits for their clients. Helping clients succeed over the long run is always good business.

The author
Thomas A. McCoy, CLU, retired in 2013 as editor-in-chief of Rough Notes magazine.