Public companies that invest in their people have three times’ the return on their stock price of those that don’t, making a clear case for investing in plan members’ health needs and disability prevention strategies, said Tyler Amell, adjunct faculty at Pacific Coast University for Workplace Health Sciences, during Benefits Canada’s 2021 Chronic Disease at Work conference in late February.
The 2016 study in the Journal of Occupational and Environmental Medicine tracked S&P 500 index companies over a 14-year period. It found companies that had won the C. Everett Koop Award for organizations that “demonstrably move the needle” in improving the health of their people had a 325 per cent return on their stock, in comparison to a 105 per cent return for the broader index. “This is fascinating. I’ve had more success in using this to sway [chief financial officers] on the concept of investing in the health of people than anything else.”
There’s a clear business case for addressing chronic health issues, he said. Some of the most common chronic conditions affecting the Canadian workplace — including anxiety, arthritis, asthma, back problems, cancer, diabetes, migraines and mood disorders — result in between five and nine lost days of productivity per year each. Looking at key risk factors for chronic illness, alcohol use resulted in a 66-per cent additional increase in health-care claims costs, followed by drug use (54 per cent), depression (41 per cent), stress (16 per cent), smoking (15 per cent), lack of exercise (11 per cent) and poor nutrition (10 per cent).
Amell highlighted evidence-informed strategies that workplaces could adopt to help prevent plan members from developing chronic diseases or taking disability leave. Health-risk assessments and biometric-screening tools from a chronic-disease perspective have evidence backing them, he said, and can be particularly valuable to distributed workforces and those with a large number of employees working from home. He also highlighted digital and live virtual coaching, as well as condition management programs, possibly integrated with internet-based cognitive behavioural therapy programs. “Engaging people in their health conversation is crucial, because that can actually help sustainable behaviour change around risk profiling.”
However, Amell cautioned employers to think critically about solutions that purported to have astronomical rates of return in short periods of time. He said when he’d been invited by employers to speak with various vendors, they’ve touted returns on investment between eight and 15 times the amount of money the plan sponsor invests.
“It doesn’t reflect the reality of the science and it doesn’t reflect most likely your own intimations and biases,” he said. “Take off your benefits hat for a moment and put your own personal investment hat on. If you’re meeting with a mutual-fund salesperson or a financial-services advisor and they told you you’d be earning eight or 10 or 15 times your [investment], would you treat that with skepticism or not? And usually the answer is yes.”
He pointed to return on investment numbers from Harvard University, the International Social Security Administration and Rand Corp. that showed work-reintegration programs tend to have an ROI of 3.7, followed by well-being programs (3.3), disease-management solutions (3.8), prevention efforts (2.2) and lifestyle management programs (0.5) while the absenteeism savings tend to be 2.7 times what was invested.
“The highest return is still less than four times [what was invested] and this has to be looked at from a very broad lens and a long time horizon. You’re not going to realize any significant savings until three or four years, probably five years down the line, which is extremely important when it comes to defining your strategy.”
Chronic and episodic health conditions don’t develop overnight and likewise, employers shouldn’t expect their prevention strategies to pay dividends immediately. Amell encouraged employers to avoid what he called random acts of wellness and instead turn to data on the conditions driving claims experience. “Going out and buying gym memberships instead of looking at the overarching philosophy and strategy around health doesn’t make a lot of sense and in fact is one of the reasons why there’s skepticism . . . around what may actually move the needle on workplace prevention strategies. Your best effort is really to target your chronic and episodic conditions based on experience.”
Employers should look for efficiencies in their chronic-disease processes while decreasing touchpoints, streamlining workflows and focusing on the employee experience. He said plan sponsors should meet members where they’re at by leveraging technology and “dynamic” virtual solutions.