Three Reasons Why Your Corporate Wellness Program Won’t Deliver the ROI You’ve Been Promised.

By: Jon Cooper

The corporate wellness market today represents a triumph of faith over reason.  Large companies have been willing to try just about everything in hopes of stemming their ever-growing healthcare liability.  While done with the best intentions, employers have been truly challenged to demonstrate an “R” on their “I”, in other words a positive return…

So what went wrong?  Why are employers forking out, on average, $600 per employee for wellness, and not seeing results?

Oh “big” brothers, where art thou?
Let’s face it.  Just a few years ago you were probably offered pretty rich health benefits: low deductible, low co-pays, and an open network.  One recession and several years of health inflation later, it just is no longer economically feasible to offer those kinds of benefits.  So, like most companies, you probably had to scale back benefits.
At the same time, you want to offer your employees the very best within the scope of your budget, and a corporate wellness program seems like a win-win.  Your employees will be healthier and enjoy a better quality of life, and you will have lower costs and a more engaged workforce.
Here’s the rub.  For your corporate wellness program to be successful, you need your employees to adopt it…
Sadly, in the era of “Occupy Wall Street”, 8% unemployment, and political vitriol, mistrust is at an all-time high.  Rather than welcoming corporate wellness, workers perceive it as a cynical attempt to obfuscate the cuts made to their benefit packages and to exercise more control over their lives.
So what’s the solution?  Companies that want to see real results from their wellness program have to engage not just their employees, but also those whom their employees trust, their family and friends.

We’re all unique, so why aren’t our incentives?
Corporate wellness companies all claim to offer “personalized incentives”, but what they truly mean is that they will customize incentives for the employer based on a budget.  While this is important, this is a far cry from personalized incentives, tailored to the individual employee.  Anyone who’s taken an economics class, or just spent a few minutes thinking about it, knows that different people are motivated by different things – economists call this “risk tolerance”.
A perfect example is that people of lower incomes are far more likely you to play the lottery than those who earn higher incomes. Why?  After all, the odds of winning the lottery are the same irrespective of your income level.  The reason is that, in general, people of different income levels have different risk tolerances, and respond differently to incentive structures.
Indeed, if this is the case, then why do corporate wellness programs offer the same incentive to everyone in your workforce?  For example, who says that $200 is the right incentive for smoking cessation?  Is $200 enough to motivate Susan, a married executive in a dual income household earning hefty six figure salaries?  Would Stacey, a single mom who earns a quarter of what Susan earns be motivated to quit smoking for less?
A one-size-fits-all incentive program is kind of like a one-size-fits all t-shirt.  Everyone fits in it, but no one looks good in it…  A company is a dynamic organization comprised of unique individuals with different backgrounds, beliefs, and value systems.  An effective health incentives program must take that into account and be truly personalized at the individual level in order to drive adoption and behavior change across the diversity of your workforce.

Quit measuring steps and start measuring outcomes…
Unfortunately, “steps walked” is not a currency.  Health plans don’t underwrite based on “steps walked” and hospitals don’t accept “steps walked” as a form of payment, so why are you spending oodles of money rewarding people for logging a few extra steps on their pedometer, especially when they could be walking to KFC to double down on a Double Down?

Yes indeed, those are fried chickens in place of a bun.  What else would you expect from a KFC breakfast sandwich…

Don’t get me wrong, there is definitely a strong correlation between physical activity and health, but with limited resources and a healthcare crisis looming, we can’t afford to measure the noise, we have to go straight to the signal.

Fortunately, in healthcare, a few very important biometrics which are highly correlated to the leading chronic diseases, can very easily be  measured in a fast, low cost, and entirely non-invasive manner.  Moving the needle on these biometrics will indisputably lower an individual’s risk of developing chronic diseases such as heart disease, stroke, diabetes, COPD, etc…

Now, I’m the first person to admit that giving someone a nifty pedometer and telling them that they’ll get an iPod if they walk 10,000 steps a day is pretty nice and simple, but wouldn’t you rather tell them that as a result of their efforts, they’ve increased their life expectancy by 2 years and have their doctor back you?

If you incentivize true outcome-measures, you can give your employees much more tangible feedback on their progress and reward true reduction in health risks.  Furthermore, with volumes and volumes of epidemiological studies supporting the link between key biometrics and health risks, you can proudly promote the achievements of your program, and use this data to negotiate lower insurance premiums and a raise for yourself!

So what’s next?

Don’t be discouraged.  There is light at the end of this tunnel.  Wellness is an area of rapid innovation.  Increasingly, new and innovative companies are introducing novel concepts to shake-up this sleepy industry, and individuals, employers of all sizes, and even government organizations are embracing the change.

So what should you look for in your wellness program?  The following elements are must-haves if you want your wellness program to truly drive results:

Family and friend engagement
Changing bad habits is not easy, but when your loved-ones are aware and support your efforts, you are 50% more likely to succeed.[1]

Truly individualized incentives
Realistically, it  isn’t adequate to customize wellness incentives based solely on one’s budget.  Your wellness program must have the flexibility to allow incentives to be tailored down to the individual level.

Measure what matters
It is not enough to measure and reward compliance metrics such as “steps walked” or “visits to the gym”.  To really understand the impact that your wellness program is having, you have to measure more robust biometrics which are tied to health risks.  By doing this, you will be able to make a much stronger business case for your wellness program, and be able to leverage this information to negotiate lower premiums.  Not to mention, your employees will appreciate the candid and actionable feedback, and to see how their sweat translates directly to improved life expectancy.

[1]  (Michaela Kiernan, 10/2011)


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