The role of incentives in wellness programs

In the never-ending and uphill battle against unhealthy living and bad habits, one method that proves to be a worthy contender time and time again is the corporate wellness program. Employers, government agencies and individuals are all looking for ways to quit smoking; to eat healthy (or healthier) foods; to drink less; to take their medicine and vitamins; and to exercise more. The IRF has a brand new study out that reveals a number of positive cases that have benefit from the institution of an incentives-based, corporate sponsored wellness program. The upcoming implementation of the PPACA in 2014 makes this research that much more relevant. The PPACA (Patient Protection and Affordable Care Act) offers the possibility of up to a 50% per worker increase in wellness program spending. It’s kind of a big deal.

The paper, titled “Energizing Workplace Wellness Programs: The role of incentives, Rewards & Recognition” examines the ability of corporate wellness programs to improve the health and reduce the preventable conditions and sicknesses that have plagued our healthcare system. These preventable conditions could help to cause the US healthcare cost to as much as 25% of GDP by as early as 2025.

The paper does its best to sort through the available research and case studies to be able to provide a clear picture of the Incentive Industry and its ROI data. The paper goes on to make recommendations for and against certain practices so as to be able to hopefully help mold standards and best practices at many US organizations. It also discusses the ramifications of different reward/program combinations and which rewards are most effective in what area. This is very useful stuff.

Rodger Stotz, the Chief Research officer of the IRF says, “The U.S. is spending about $2.5 trillion per year on health care. As much as 75 percent of that is spent on preventable conditions, so the potential savings through preventative health care measures that include workplace wellness programs could be as high as $1.9 trillion per year. And this doesn’t even consider productivity gains or worker quality of life improvements.” He also says that, “Less than one in five employees will participate in wellness programs that do not offer rewards. This changes dramatically when incentives are offered — four in five will participate. Clearly all businesses should consider this when looking at their wellness efforts.”

The study shows that many programs provide a ROI value of up to an average of $3 saved for every dollar spent. IRF President Melissa Van Dyke makes special note of companies like Johnson & Johnson who saved between $9-10 million per year as a direct result of their wellness programs.

They’re healthy and they help the bottom line. If you don’t think that a corporate wellness program isn’t beneficially good for everybody involved, there may just be no cure for you yet.