The Importance of Measurement: Never Mind the Cost, Is Your Health Care Plan Even Working?

SeanGallivanBy Sean Gallivan, COO of Healthentic

Wellness programs are quickly becoming a necessary component for many U.S. organizations, but the American Journal of Health Promotion has raised a red flag questioning whether these programs deliver the intended effect of lowering health care costs. Companies have been implementing wellness programs because it seems like the right thing to do, yet programs are implemented prior to any basic knowledge of company population and their ailments. It’s no wonder these programs aren’t making a noticeable impact on overall health!

Wellness has grown into a $6 billion industry in the U.S. alone, but the jury is still out when it comes to claims of cost savings, effectiveness, and overall value to companies. Even still, wellness programs are growing ever more popular among employers. A RAND Corporation analysis discovered half of all organizations with 50 or more employees have them. According to the 2013 Kaiser Family Foundation Survey of Employer Health Benefits, 99 percent of employers with 200 employees or more offer at least one health promotion program to their employees, but less than 30 percent measure the actual health outcomes or return on that investment. This lack of outcome measurement is remarkable given how much (in time, money and opportunities lost) illness and injury cost American businesses.

The benefits of wellness programs seem obvious. They have the potential to improve employee health, decrease missed workdays due to illness, and reduce overall company health care costs. Other indirect benefits include increased employee engagement, happiness, and a boost to office morale. While the benefits these programs can provide are great, some organizations have developed an obsession with program participation and incentives as a means to achieve the desired results of lower health costs. Few, if any, achieve decreased health costs.

That’s because many companies simply aren’t implementing effective programs for their business, based on the specific health challenges of their people. Participation means nothing if organizations aren’t addressing the most important issues for their unique workforce. For example, say a company spends $3 million on a large health promotion program designed to promote walking with biometric devices. This kind of program might not have any effect if the workforce has a disproportionate amount of chronic disease. Or employees might not be interested in walking more, and so don’t participate. Companies spend millions upon millions on specialized disease management programs for populations that are predominantly young and healthy. Only later do they attempt to measure efficacy. And it’s no surprise the outcomes don’t look good; the programs weren’t a good fit in the first place. This is simply because companies don’t have insight into their own population. They don’t start with measurement.

Organizations often come into the world of workforce health and wellness without the tools needed to start off on the right foot. Most of the time organizations are still determining if implementing a wellness program is a smart idea in the first place. Companies are unable to measure or even estimate the economic value or return. If the top health issues faced by a company are unknown, there’s no reason to start a program. What can it be measured against?

Cultural fit matters as well. If a yoga program is introduced to a brewing company in Milwaukee, there’s a problem! While this is admittedly a stereotype—there are plenty of big, burly guys and gals who love to roll out a yoga mat too—the idea is an old one. Companies should know what types of health and wellbeing programs their workforce is willing to engage in before spending any money. 

Companies clearly have a unique interest in controlling their own health related costs, and there are a range of options for addressing those costs, but any effective management strategy needs to include population data AND a viable way of analyzing that data. Combined, this information can identify which strategies are likely to pay off, both in cost-effectiveness and in actual employee health benefits.

The fact is most companies struggle to understand the health of their population. And not just any wellness program – or even the same wellness program – will work for all companies. Wellness programs alone do not necessarily reduce overall spending. There are upfront investments and startup costs. To boot, the goal is a long term one. Population health doesn’t change overnight so a measurement program has to understand this and be able to consistently follow company efforts year after year. Without the help of population health management tools, it is impossible to know if health promotion programs are working how they should be.

Companies have limited time, resources, and budgets for already skyrocketing health costs. So for many, it will come down to priorities. How can we get the most out of our precious health, wellness, and wellbeing spending? The ability to find opportunities that can truly make a difference for each individual population group is the first step.

Big data is being folded into every aspect of corporations, and leveraging big data for healthcare can solve the current industry issue of measuring and managing healthcare costs. By using big data, companies can gain an understanding of the underlying health issues for their unique population. This understanding allows companies to make smart health, program, and economic decisions when deciding how to approach population health management.

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