In the era in which wellness vendors were still claiming an ROI on wellness (and more and more are not), I asked a number of them how they calculated the ROI. Not one calculated the ROI in a way that a steely-eyed CFO would endorse.
Below is a partial list of costs wellness vendors should be considering, but rarely if ever do consider. If you have a wellness program and want to look for an ROI please start with this list:
1. Wellness vendor fees
2. Communication costs
3. Investments in materials (i.e. Fitbit) and facilities (i.e. onsite fitness centers)
4. The cost of biometric tests and health assessments
5. The cost of program incentives (awards, premium reductions, etc.)
6. The wages and benefits of the company’s wellness team members
7. The wages and lost productivity for employees to sit through biometric tests, wellness meetings, to read wellness memos and other emails/communications, and the time to fill out health risk assessments*
8. The cost of following-up on false positives from asymptomatic employees going to doctors for ill-advised tests. This one is not uncommon – and can generate as much as $70,000** in additional cost and harm in a single episode.
Further, when wellness vendors claim improvements in productivity, they need only look at a client’s wages as a percentage of sales (with a few minor adjustments). If that ratio is not declining, employee productivity is not improving. That is a simple calculation, but most wellness vendors claim that employee productivity cannot be measured – a fallacy.
For an excellent discussion on failures of wellness productivity claims click here.
The same principles apply to VOI claims as well. Click here for an excellent review of what some call the VOI scam click here.
This post may be flogging a dead horse. So be it.
Tom’s latest book, “An Illustrated Guide to Personal Health“, is now available on Amazon.
*If ten thousand employees spend 8 hours per year in wellness meetings, reading wellness emails, filling out forms, etc, at an average wage of $20/hour, the cost is $1.6 million.
**I’ve personally witnessed people who’ve had false positives on wellness exams and spent thousands of plan dollars just to explore false positives. The largest one cost a shade under $70,000 to get an all clear. If you want to know the true cost of a wellness program, this impact can’t be ignored.