Employer wellness programs can be a win-win for both business owners and employees, improving the health and productivity of employees, while slowing the growth of health care costs for the company. But how can you tell if your program is working? Should you calculate ROI (return on investment), VOI (value on investment) or both?
ROI measures the monetary return related to wellness programs. It may include overall health care cost savings and productivity increases from reduced absenteeism and sick leave. ROI is strictly a financial measure, reported in dollars.
VOI looks at the overall value received from a wellness program, taking into account recruitment, retention, employee morale, decreased use of sick days and increased productivity.
Is one better?
ROI and VOI are both useful — they simply measure different aspects of wellness.
But which is more suitable for your organization? That depends on the goals you developed and your organization’s culture. Employers should reexamine the reasons for starting a wellness program. Wellness programs are often implemented with goals of controlling health care costs and improving employee health and productivity. Does your program have more of a people focus, a productivity focus or perhaps a different focus that makes either ROI or VOI more appropriate?
Use measurements that assess the stated strategic goals of your wellness initiatives. Was your goal to improve specific aggregate health data such as tobacco-use rates, or was it to improve your employee health culture and employee engagement?
Also consider the style of your program. What type of activities do you offer? Do you focus on employee education? Do you have a results-oriented program with outcome-based incentives? The answers can help determine whether ROI or VOI is the most useful method of measuring progress.
For example, Advocate Aurora Health, one of the 10 largest not-for-profit, integrated health systems in the United States and a leading employer in the Midwest with more than 70,000 employees, focuses on overall employee well-being, rather than just physical health. Leaders at the organization, which has dual headquarters in Downers Grove, Ill., and Milwaukee, Wis., feel this wholistic approach is best evaluated by VOI to account for employees’ improved well-being.
Employee opinions matter
Determine the wellness goals of your employees by asking the following questions:
What are their core values?
What barriers do they face in meeting their wellness goals?
Are they satisfied with the current wellness offerings?
What are their perceptions of their total wellbeing – financial, spiritual, relational, emotional?
Measure their perceptions over time through surveys, meetings or focus groups. Use their feedback to make improvements.
It typically takes three to five years before you see tangible results, but observing steady improvements over time means your program is making a positive impact.
Keep score along the way
Common metrics easily measured include participation rates in wellness programs or activities. However, participation rates don’t always translate into improved outcomes. Health metrics to assess ROI or VOI should not be self-reported. Tie measures to external or national benchmarks to produce useful comparisons. Internal benchmarks (year-over-year comparisons) are another way to assess change.
Track the impact of your wellness programs using a wellness scorecard and monitoring it over time. Advocate Aurora, for example, tracks five categories on its wellness dashboard: cost, fitness, tobacco use, screening and behavioral health.
Consider a hybrid approach
Measuring ROI savings can help justify the cost of your wellness program, and VOI can capture the additional benefits achieved by improving employees' overall health and well-being. A robust wellness scorecard could include ROI metrics such as medical claims savings or decreases in sick days plus broader VOI measures, which can show returns in:
Engagement and improved morale,
A culture of wellness,
Recruitment and retention, and
Want to further explore a proven way to lower your medical costs and improve your employees’ health and well-being? Visit Advocate Aurora’s Employer Solutions for a solution customized to your company’s culture that could include employer clinics, wellness, occupational health, employee assistance programs (EAP), executive health programs and more.
Advocate Aurora Health is one of the 10 largest not-for-profit, integrated health system in the United States and a leading Midwest employer with more than 70,000 employees and the region’s largest employed medical staff and home health organization. The system serves nearly 3 million patients annually in Illinois and Wisconsin.