Return on Investment is the elephant in the room for anyone in HR trying to get backing from the board for a health and wellbeing initiative. The evidence hasn’t been there. But maybe it’s only been a case of looking in the wrong place?
The way the world sees healthcare, in general, has changed. Thinking in terms of financial returns has never been very helpful, and instead there’s been a shift to taking into account the wider ’value’ of health systems (there’s been the influential report by the King’s Fund in 2015 on ‘Better Value in the NHS’ for example). The same’s true in the global manufacturing sector, which is trying to get away from being judged in terms of plain contribution to Gross Domestic Product, as again, it just doesn’t reflect the value being generated for economies.
But most employers still see health and wellbeing in the context of how they can demonstrate significance to the board in plain ROI – or more accurately, how they can’t determine an ROI at all, and so health and wellbeing spend continues to be just one of those ‘good-to-have’ costs.
So what is ‘value’ when it comes to employee health and wellbeing? Optum & National Business Group on Health in the USA undertook research among 275 employers to see whether employers were offering health and wellness programmes for reasons beyond simple ROI, and why. The top reasons given were the reduction in employee health risks and used as a basis for improving employee productivity. Other reasons were to manage or reduce disability claims, improve job satisfaction, reduce sick days, reduce presenteeism, improve morale, attract and retain talented employees.
Digging down beneath these kinds of headline business performance areas, there are some critical areas that have a real impact across workforces and aren’t considered or accounted for:
– using a preventative approach (health screenings and education) over a reactive approach (health insurance) matters to long-term organisational health and performance (and reduces costs);
– so, better quality health screenings are important. More accurate testing and diagnoses means fewer complications and errors, less invasive testing after the initial screen, faster recovery and less aggressive treatments when a condition is picked up earlier;
– and ‘quality’ is not just about the most expensive – again, going back to the issue of value – the best value health checks are those which lead to improved outcomes for employees, are based on solid research evidence, and by avoiding the underuse, overuse and misuse of tests and gimmicky ’innovations’;
– Bluecrest is an example of a provider focused on value, based on the importance of keeping costs low through more efficient use of resources so that screening benefits are a viable option for larger numbers of employees;
– lower cost and higher value health screenings are fundamental to organisations in seeing tangible value in improving organisational health at a large-scale, universal level.
To capture the full picture in terms of real VOI, HR need to look at the following kinds of data and development of metrics:
– levels of participation in health checks/wellness programmes;
– health risk reduction (evidenced by key annual trends, such as numbers of smokers, BMI, and obesity, high blood pressure cases), levels of exercise;
– health checks and wellness programme satisfaction;
– employee engagement, satisfaction, and retention;
– if possible, any measures of productivity and innovation.
And this added value can be mapped against costs:
– specific reactive health care costs (private insurance etc);
– levels of absence and perceived presenteeism (including long-term absence and management costs);
– health and safety issues and costs.
The challenge remains of access to data, and the will to make analyses over the long-term, but it’ll be the data from employee health screenings that will make the difference in seeing and recognising value over time.