Workplace wellness programs can generate savings

Health Affairs

Volumn 29, Issue 2, 2010, Pages

  Baicker, Katherine ^a   Cutler, David ^b   Song, Zirui ^c  

^a HARVARD SCHOOL OF PUBLIC HEALTH   (United States)

^b HARVARD UNIVERSITY   (United States)

^c HARVARD MEDICAL SCHOOL   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ABSENTEEISM; ARTICLE; BUDGET; COST CONTROL; EMPLOYEE; HEALTH CARE COST; HEALTH CARE PERSONNEL; HEALTH CARE POLICY; HEALTH HAZARD; HEALTH PROGRAM; HEALTH PROMOTION; HUMAN; PRODUCTIVITY; RISK ASSESSMENT; WELLBEING; WORKER; WORKPLACE; ECONOMICS; META ANALYSIS; OCCUPATIONAL HEALTH SERVICE; STATISTICS; UNITED STATES;

ABSENTEEISM; COST SAVINGS; HEALTH CARE COSTS; HEALTH PROMOTION; HUMANS; OCCUPATIONAL HEALTH SERVICES; UNITED STATES;

EID: 77954118220     PISSN: 02782715     EISSN: 15445208     Source Type: Journal    
DOI: 10.1377/hlthaff.2009.0626     Document Type: Article

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18. Although in the case of random assignment "before" data would not be necessary for the construction of causal estimates (since difference between the treatment and control groups after the intervention would reflect the effects of the intervention), in practice all of the studies with randomized assignment reported both before and after data. In the case of non-randomly assigned comparison groups, the "before" data are necessary to net out any existing differences between the groups in estimating the effect of the intervention.
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21. An alternative metric to return on investment would be net present value. In this context we prefer return on investment because it allows us to compare normalized results across studies (as internally calculated ratios, rather than dollar figures) and allows us to compare our results to those of other studies (the majority of which calculate return on investment). There is unfortunately a paucity of information about the time path of investments and returns.
22. Fourteen studies reported their own return on investment, which did not always exactly match ours, because they were not always calculated over the same time period. The average of the fourteen reported returns on investment yields an almost identical 3.36.
23. As noted above, in nonexperimental settings, baseline comparisons are a useful way to gauge existing differences in non-randomly assigned treatment and comparison groups.
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25. The share of these costs borne by the firm in the form of increased replacement worker costs depends on how many sick days workers are entitled to and whether workers are able to convert unused sick days to other days of leave or pay.
26. In this case the average return on investment of 4.71 reported by these twelve studies is much higher than that we calculated directly using reported costs and benefits.
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29. Some insights can be gained from the magnitude of the return on investment seen in large firms, however. For the firms studied here, with roughly 50, 000 employees, on average, the benefits in lower medical costs are about 3:1. Even in the extreme case where all of the costs of wellness programs are fixed costs, those costs could be spread over only one-third the number of employees and still be cost-neutral.
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