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Returns on Investment in Workplace Wellbeing Programs
Presented by:Jeremy W. Bray, PhDDepartment of Economics
Bryan School of Business and EconomicsThe University of North Carolina at Greensboro
Georgia Karuntzos, PhDJesse Hinde
RTI International
Context
• Many researchers and program developers think workplace stakeholders require that wellbeing programs bring positive economic benefits to the workplace– While documenting economic benefits is a necessary part of the
adoption decision process for most workplaces, these benefits by themselves will seldom convince a workplace to adopt a program
– The economic benefit needed to support adoption of wellbeing programs by any given organization is critically dependent on the context and needs of each organization
• Concerns about overstating the economic benefits of workplace wellbeing efforts have generated a growing backlash among some commentators
Outline of Presentation
• The return on investment (ROI) potential: brief overview of the cost to employers of poor worker health
• The ROI evidence: the I, the R, and the ROI• An alternative approach: cost-effectiveness
analysis (CEA)
Costs of Poor Worker Health
Source: NIOSH [2012]. Research Compendium: The NIOSH Total Worker HealthTM Program: Seminal Research Papers 2012. Washington, DC: U.S. Department of Health and Human Services, Public Health Service, Centers for Disease Control and Prevention, National Institute for Occupational Safety and Health, DHHS (NIOSH) Publication No. 2012-146, 2012 May:1-214.
Opportunity For Savings
Source: NIOSH [2012]. Research Compendium: The NIOSH Total Worker HealthTM Program: Seminal Research Papers 2012. Washington, DC: U.S. Department of Health and Human Services, Public Health Service, Centers for Disease Control and Prevention, National Institute for Occupational Safety and Health, DHHS (NIOSH) Publication No. 2012-146, 2012 May:1-214.
Benefits of Workplace WellbeingTo the organization To the employee
a well-managed health and safety programme a safe and healthy work environment
a positive and caring image enhanced self-esteem
improved staff morale reduced stress
reduced staff turnover improved morale
reduced absenteeism increased job satisfaction
increased productivity increased skills for health protection
reduced health care/insurance costs improved health
reduced risk of fines and litigation improved sense of well-being
Source: http://www.who.int/occupational_health/topics/workplace/en/index1.html
The I
• Cost studies document the service delivery costs of workplace wellbeing programs
• Often misunderstood due to varying use of the term “cost”– Cost of the problem (lost productivity due to poor health)– Micro-costing studies of program costs
• To date, formal micro-costing-based cost studies are almost nonexistent in the workplace wellbeing literature
• Cost studies from the Work, Family, and Health Network (Barbosa et al., 2014; Dowd et al., 2015)
Work, Family, and Health Network (WFHN)
• Six teams of investigators conducting research in diverse workplaces
• Interdisciplinary across social, behavioral, and health sciences
• Two US partner employers– Telecommunications firm (Tomo)– Healthcare/long term care firm (Leef)
• Phase I: 2005-2008• Phase II: 2009-2015
WFHN Goals
• Conduct interdisciplinary evidence-based research in the area of work and family programs and policies to reduce work family conflict
• Introduce health and wellbeing as the primary outcomes of interest in this area of research
• Improve the health of workers, their families and employers by providing the scientific evidence necessary to effect change in the workplace
WFHN Funding• Eunice Kennedy Shriver National Institute of Child Health and
Human Development (Grants # U01HD051217, U01HD051218, U01HD051256, U01HD051276)
• National Institute on Aging (Grant # U01AG027669)• Office of Behavioral and Social Sciences Research• National Institute for Occupational Safety and Health (Grants #
U01OH008788, U01HD059773)• Additional funding from
– National Heart, Lung, and Blood Institute (Grant #R01HL107240)– William T. Grant Foundation– Alfred P. Sloan Foundation– US Department of Health and Human Services Administration for Children
and Families
Source: Barbosa, C, Bray, J, Brockwood, K, & Reeves, D. (2013). Costs of a Work-Family Intervention: Evidence From the Work, Family, and Health Network. American Journal of Health Promotion, 28(4): 209-217.
WFHN Intervention Costs in Tomo
WFHN Intervention Costs in LeefCategory Cost Type Resource(s) Cost (2011$)
Customization
Labor 146 hours 4,449
Non-labor - 0
Total - 4,449
Start-up
Labor 300 hours 11,381
Non-labor Participatory session contract, software licenses, iPods, travel 349,864
Total - 361,245
Implementation
Labor 1,956 hours 47,466
Non-labor Office space, handout materials 4,675
Total - 52,140
Total cost of START 417,834
Total cost of START per participant (n=545) 767
Source: Dowd, W.N., Bray, J.W., Barbosa, C., Brockwood, K., Kaiser, D., Mills, M., Hurtado, D.A., Wipfl, B. (2015). Cost and Return on Investment of a Work-Family Intervention in the Extended Care Industry: Evidence from the Work, Family, and Health Network.
The R
• Numerous studies have demonstrated the effectiveness of workplace wellness/wellbeing programs on the target health behavior
• Studies also show effectiveness on workplace outcomes (e.g., productivity)
Source: NIOSH [2012]. Research Compendium: The NIOSH Total Worker Health TM Program: Seminal Research Papers 2012. Washington, DC: U.S. Department of Health and Human Services, Public Health Service, Centers for Disease Control and Prevention, National Institute for Occupational Safety and Health, DHHS (NIOSH) Publication No. 2012-146, 2012 May:1-214.
Source: NIOSH [2012]. Research Compendium: The NIOSH Total Worker Health TM Program: Seminal Research Papers 2012. Washington, DC: U.S. Department of Health and Human Services, Public Health Service, Centers for Disease Control and Prevention, National Institute for Occupational Safety and Health, DHHS (NIOSH) Publication No. 2012-146, 2012 May:1-214.
The ROI
• Meta-analyses (e.g., Chapman, 2005; Goetzel et al., 1999) suggest that workplace wellness programs save $3 for every $1 invested
• Despite this evidence, many doubts remain (National Institute for Health Care Management, 2011; DiNardo, Horwitz, & Kelly, 2013; Horwitz, Kelly, & DiNardo, 2013)
The ROI
“Three years after wellness was hailed as perhaps the only truly bipartisan component of the Affordable Care Act, both lay and trade commentators have begun observing that the assumptions behind it were incorrect while downsides were overlooked. As a predictable result, savings have proven elusive even in seemingly ideal baseline circumstances for health improvement.” – Al Lewis and Vik Khanna in the Health Affairs Blog, April 29, 2013
The ROI
Source: Caloyeras, J. P., Liu, H., Exum, E., Broderick, M., & Mattke, S. (2014). Managing manifest diseases, but not health risks, saved PepsiCo money over seven years. Health Affairs, 33(1), 124-131.
WFHN ROI in TomoCovariate Organizational Costs Intervention Costs
STAR participant -2,187.78 690.77***(4,207.03) (14.60)
Baseline costs to employer 2.08***(0.37)
Male 1,410.45 -17.36(3,537.30) (12.26)
Age -799.06*** 3.32**(196.27) (0.97)
Race: Indian 16,595.36* -17.79(6,572.22) (19.72)
Race: Non-white, non-Indian -376.71 -33.289(4,169.645) (17.02)
College graduate 272.09 9.64(2,592.68) (18.10)
Constant 80,198.54*** -72.44(21,140.43) (61.73)
ROI2.17
(4.85)
N=960; * p<0.05, ** p<0.01, *** p<0.001 Dependent variables expressed in U.S. dollars, 2011 prices; cluster-robust standard errors in parentheses. ROI standard error calculated using a cluster-robust bootstrap routine with 1,000 replications.Source: Barbosa, C., Bray, J.W., Dowd, W.N., Mills, M.J., Kelly, E.L., Moen, P., & Wipfli, B. (2015). Return on investment of a Work-Family Intervention: Evidence from the Work, Family, and Health Network. Journal of Occupational and Environmental Medicine. 57(9): 943–951.
WFHN ROI in LeefAdjusted Means‡
Control 9,965.18
(787.67)
STAR 10,345.57
(634.89)ROI§
Point Estimate -1.54Confidence Interval -4.90 – 2.49
U.S. dollars, 2011 prices.‡Adjusted means (standard errors) computed using recycled predictions.§ROI calculated as (∆E-C)/C, where ∆E is the marginal effect of STAR on organizational costs and C is the average intervention cost. Confidence intervals calculated using a cluster-robust bootstrap routine with 1,000 replications.
Source: Dowd, W.N., Bray, J.W., Barbosa, C., Brockwood, K., Kaiser, D., Mills, M., Hurtado, D.A., Wipfl, B. (2015). Cost and Return on Investment of a Work-Family Intervention in the Extended Care Industry: Evidence from the Work, Family, and Health Network.
An Alternative Approach: CEA
• Looks at value for money using the incremental cost effectiveness ratio (ICER)
• Helps chose among alternatives assuming something will be adopted, but does not give information on whether or not to adopt
• Different outcomes may have different effectiveness so that one program may not be cost-effective for all outcomes
European Wellness CEAs
• Nutrition and exercise (Robroek et al., 2012)• Cardiovascular disease prevention (Groeneveld
et al., 2011)• Depression (Phillips et al., 2013)• CEAs of interventions for musculoskeletal
disorders in reducing absenteeism are now so prolific that three separate systematic reviews have been published since 2010 (Carroll et al., 2010; Palmer et al., 2012; Squires et al. 2012)
Parting Thoughts
• Competing stakeholders and perspectives– Industry– Employee– Government
• Research is needed– Need more quality evaluations of workplace
wellbeing programs– Need better quality research on cost savings and
ROI
Questions?