Most organizations have come to understand the value of investing in workplace wellness. Intuitively, integrated health and productivity programs make sense. But with the continuing need to control expenses—including benefits—employers are under pressure to demonstrate how these programs directly contribute to organizational health. Or, in other words, how they show a positive return on investment (ROI).

The first step is establishing ROI metrics to measure and monitor health and productivity. Equally important, however, is articulating how wellness programs deliver ROI across four key organizational priorities: financial management, operational efficiencies, employee health and engagement and risk management.

Financial management
Financial management is often seen as a way to reduce the costs of increasing healthcare and HR expenses. Health and productivity programs help organizations manage and mitigate financial risks by improving the predictability around absences, managing disability and Workers’ Compensation Board (WCB) claims, and controlling benefits costs.

Absenteeism – Each day of absence can result in direct costs for an organization, such as loss of revenue and productivity, but early intervention can help. The sooner the employee receives guidance and support, the faster he or she can return to work.

Casual absences are costly but often overlooked. Underlying health issues (and the associated costs) can go unnoticed, which could lead to further absences. In addition, patterned or cyclical absences (e.g., four incidents in four months) are often difficult to identify if they are not tracked formally. These are more likely to be symptomatic of underlying issues and may lead to prolonged leaves of absence or short-term disability (STD).

There is significant opportunity for organizations to control costs and reduce the health risks of employees downstream by managing such absences through structured intervention. Support for the root cause of absence, whether performance- or health-related, can be offered before the condition becomes more complicated and more costly.

Disability management – Employees who have been ill or injured need help in returning to productive and meaningful work in a safe and timely manner. But as the costs of employee illnesses and injuries increase, so does the need to control these costs.

Early intervention can take many forms: timely claim referral or reporting of incidents, immediate outreach to disabled employees, modified or progressive return-to-work planning being set in motion before a claim is adjudicated and identifying modified work opportunities. These tactics can significantly improve outcomes by reducing delays and keeping employees connected to the workplace.

Key metrics to monitor include the decrease in the duration of closed cases for STD and the decrease in incidence of STD cases and new long-term disability cases.

WCB claims – Managing Workers’ Compensation claims is complex and time-consuming. When accidents occur and claims are not managed carefully, costs can escalate dramatically.
Strategic programs let organizations contain costs through appeal or other strategies, such as reviewing claims for cost reduction and recovery potential. Promptly reporting Workers’ Compensation claims has a dramatic impact on the overall cost of the claims, whereas delaying them can push treatment and result in the need for much more intensive care. If an injured employee feels victimized by an unjust litigation process, this can lead to mental health conditions, such as depression, which can further complicate the employee’s recovery.

Overall benefits – The total cost of delivering employee benefits—including everything from dental plans to massage therapy—is on the rise. According to a Conference Board of Canada report, Benefits Benchmarking 2009: Balancing Competitiveness and Cost, the downloading of health costs from cash-strapped hospitals and governments, an aging population that’s boosting utilization rates and new and expensive drugs mean employers are paying more.

Prescription drug coverage is the largest cost—ranging from 25% to 40% of a typical employer’s total benefits cost. The Canadian Institute for Health Information reports that over the past 10 years, spending on pharmaceuticals has more than doubled.

When unhealthy behaviour is identified early and support is provided, it is far more likely the behaviour can change before it worsens or results in a serious but preventable chronic condition requiring ongoing medication. Preventative measures, including the use of an employee assistance program (EAP) and health coaching, can help mitigate downstream costs.

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