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. Instead, there’s been a shift to considering the broader value of health systems (the influential report by the King’s Fund 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 on a plain contribution to Gross Domestic Product. It doesn’t reflect the value being generated for economies.
But most employers still see health and well-being in how they can demonstrate significance to the board in plain ROI. More accurately, how they can’t determine an ROI at all, and so health and wellbeing spending 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 were reducing 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, and attract and retain talented employees.
How to Invest With Impact
Some critical areas have a tangible 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);
- Better quality health screenings are essential. More accurate testing and diagnoses mean fewer complications and errors, less invasive testing after the initial screen, faster recovery and less aggressive treatments with early diagnosis;
- 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 with a value focus. Based on the importance of keeping costs low through efficient use of resources, meaning screening benefits are a viable option;
- health screenings are fundamental to organisations seeing tangible value in improving organisational health on a large scale.
Data and Development
To capture the whole picture in terms of real VOI, HR needs to look at the following:
- levels of participation in health checks/wellness programmes;
- health risk reduction (key annual trends; numbers of smokers, BMI, obesity, high blood pressure cases), levels of exercise;
- health checks and wellbeing programme satisfaction;
- employee engagement, satisfaction, and retention;
- if possible, any measures of productivity and innovation.
And you can map this added value 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 expenses.
The challenge remains in access to data and the will to make analyses over the long term. The data from employee health screenings will make the difference in seeing and recognising value over time.