In our previous post, we discussed the importance of measuring the ROI of wellness programs. Now, we will be focusing on some ways CFOs can manage this measurement process. Here are some specific ways to get started.
Know what you can and cannot do. Employee health and wellness are very personal things. Although many employees appreciate a company’s efforts to help them improve their health, there are limits to what a company can do from an employee relations standpoint and from a legal and regulatory standpoint. Therefore, it is a good idea to tailor employee surveys and data gathering to the comfort level of the employee population.
In addition, the Health Insurance Portability and Accountability Act (HIPAA) limits employers’ access to employee health data and information. While companies can request aggregate data, they generally cannot access individual data. However, health insurance carriers, third-party administrators and other vendors have more leeway under the law and can help create data sets that are HIPAA compliant.
Decide what to measure. Once you know what data is available, you can focus on multiple measures among the overall workforce or among specific populations, including overall healthcare costs, absenteeism, disability rates, workers compensation claims, productivity and employee turnover/retention.
To be sure, financial ROI metrics are important ways for companies to gauge the effectiveness of their wellness programs. This can be as simple as comparing the cost of the program against changes to total healthcare claims for a given year. However, this measurement process can also be an opportunity to identify specific demographic trends or disease patterns within the employee population that warrant attention and even dedicated wellness programs.
For example, if health claims data indicate a large population of diabetics or asthmatics in the covered population, a company can work with its insurance carrier or a disease management vendor to get those individuals enrolled in a disease management program. In that case, appropriate metrics could focus on the rate of hospitalizations among the population and overall claims costs.
Understand that wellness is also about avoiding illness and health problems. In many cases, wellness is about avoiding costs and events. For example, premature births and the subsequent intensive care for mothers and infants can cost hundreds of thousands or even millions of dollars. If a company has a significant population of female employees or female partners of employees who are of childbearing age, it is a good idea to check past aggregate claims data to identify the number of premature births and other pregnancy complications within that population. If the number is significant enough, the company may opt to implement a program that goes above and beyond usual prenatal care to increase the chances of healthy full-term pregnancies.
In addition to tracking pregnancy claims costs, insurance carriers and other vendors may be able to provide data on the number of weeks the average pregnancy in this population lasts. The closer that average moves toward the full-term 39 to 40 weeks, the more effective the program.
These are just a few of the different ways employers can measure the impact of their wellness programs. The specific metrics used tend to be as unique as the company and the population covered under its health plan.