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Fluff-Free Return on Investment

Demystifying the ROI that matters most

Let’s start by being downright blunt. Wellness ROI can be a bit fluffy and mystifying. Most wellness buffs squirm their way through ROI discussions, tossing around spurious “best guesses” derived from pseudo-scientific-predictive-modeling algorithms. The truth is that if you ever hear a vendor throw out a promise such as, “We deliver an ROI of 12:1” then perhaps they also have some nice credit default swaps to sell you. It’s time for an anti-smoke-and-mirrors approach.

Wellness return on investment (ROI) – certainly a squishy, nebulous concept that drives CFO’s crazy. How do you define it? How do you measure it? The short answer: It depends on what you’re seeking. If you’re seeking the greatest improvement in daily health habits for the greatest number of people, we applaud you. If you want participants who evangelize the program and recruit new members into it, now you’re talking. If you seek visibly increased morale (people interacting better, smiling more, exclaiming “Thank you!” to HR), read on. If you think ROI relates only to reduced health care costs or reducing risk factors, you may be missing the ROI that matters most.

Real ROI

Hopefully, after perusing our site you’ll need no further convincing that healthier employees are more productive, happier, and far less costly than their unhealthy brethren. We hope we’ve got you leaning in the direction that the only way to get employees healthier is to improve their daily health habits. Therefore, just two main questions remain for you to answer:

1. Which vendor will inspire the greatest sustained engagement (60% or more)?

2. Which vendor will best improve daily health habits for those who engage?

Focus on leading indicators (not lagging indicators)

From there, the results take care of themselves, and here’s why. Healthy habits are leading indicators of improved health, while biometrics are lagging indicators of previously practiced health habits. Let us explain. If a person is obese, they didn’t go to bed one evening rail-thin and then wake up obese – the health habits they practiced, often over a lifetime, crept up on them and caused the obesity. There is only one way we know to permanently reverse obesity – deliberately practice better health habits.

Health care costs are a further lagging indicator, trailing further behind biometric changes. Using our obesity example, a person who gradually becomes obese eventually creates a greater health care burden. But, health care costs are the LAST thing to change. First, the person practices sub-optimal habits, THEN they gradually become obese and develop other risk factors (e.g. BMI > 30, high BP, elevated glucose, etc.), and THEN their health care costs typically increase as they seek to treat the symptoms.

The ROI sequence

Maximizing the intensity and sustainability of employee engagement is therefore the first, and necessary, condition before you can ever hope to achieve reduced health care costs. True wellness ROI materializes only when the steps below are followed in order, without leap-frogging any steps (there are no short cuts):

Productivity prevails

This may be a shocker, but ROI materializes fastest, and most prominently, not in terms of reduced health care costs, but in terms of gains in productivity. Although health care costs are spiraling cataclysmically out of control, payroll costs are 5 to 6 times greater than even the richest of benefit plans. That means that preventing lost productivity, AND amplifying productivity, has a far greater impact on your bottom line than reducing health care costs! NASA reports that increasing exercise by just ½ hour per day can double employee productivity in the final 2 hours of the day!

Notice from our flowchart that productivity improves BEFORE anything else. This should be obvious but it’s not. That’s because productivity is hard to measure, and therefore most clinically oriented, binary-thinking pundits can’t wrap their heads around the supreme intuitiveness of the notion that fit, nutrition-minded, non-smoking employees are more productive than lethargic, chubby, junk-food junkies who take 3 smoking breaks per day.

Closing argument

Going back to our flowchart, if you’re serious about hype-free ROI, you should always go with the program (whether ours or someone else’s) that you feel will:

1. Generate the greatest long-term engagement

2. Inspire the greatest improvement in daily health habits for those who engage

3. Supercharge productivity as a result of #1 and #2 above

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