Challenged in Creating Your Wellness ROI?

the calculation of a true ROI


Have you been challenged to produce a wellness Return on Investment (ROI); or, has a vendor produced a generic one that didn’t meet or was irrelevant to your expectations? The assumptions related to calculating ROI or Value of Investment (VOI) for health and wellness programs in the workplace have been generally flawed for several years now.  Take into consideration a variety of research studies that have emerged over the last eight years, either touting the value of wellness programs (Harvard Business Review, “What’s The Hard Return on Employee Wellness Programs?”, 2010) or, conversely, those that have brought some hardline challenges (Rand, “Do Workplace Wellness Programs Save Employers Money”, 2014).  Though the findings vary widely, there is a common theme that has emerged—individualizing your strategy, plan, and metrics are critical factors in delivering and measuring the success of your health and wellness program.


This is a key difference because the prevailing approach to calculating ROI/ROV has been to use evidence gained through research studies or, similarly, from what consultants and carriers have collected at their book-of-business levels. Unique data collection and analysis has been further impeded by the accompanying approach of mass-program-design driven through various vendor technologies, which do not account for differences in business goals/objectives, cultural distinctions, and a host of other nuanced requirements to build program strategy and tactics that reflect the uniqueness of each plan sponsor. To have a wellness program that functions and achieves value for your organization, it has to be 100% of your making; and that is where the problem comes in.

Generic data cannot not be construed in any way to approximate a return on each particular customer’s investment because of several contributing factors. In order to have any meaningful determination, the data has to come from your sources, not those of others.

Next, comes an entire discussion about your overall corporate wellness plan design —why do you want to offer the program; and what type do you have (because that is going to have a major bearing on the type(s) of data that you need and/or are able to collect)? Plan designs fall within three categories:

1) “Nice to have”, which allows organizations to compete for top employer lists and awards while also serving as a recruitment tool and morale-booster for employees;

2) Wellbeing/voluntary participation, which provides a modest level of accountability and focus on performance;

3) Outcome/Results driven, which provides the highest degree of engagement, focus on outcomes, and metrics collection for evaluation with the intent of risk mitigation.

With this in perspective–have you set goals and objectives for your wellness program; what are the programs that you want to offer based on the above strategy; how long have these been in place and what is the culture of health and wellbeing within your organization? Based on those answers, have you mapped a path for data collection and maturation; etc.? Consider this analogy, which captures the approach many individuals and organizations have to health and wellness—Simply stated, do you want to ride a tour bus and be driven to your destinations; or, do you want to be the driver and take charge of where you go?

Yes, there are a lot of variables to consider in formulating ROI; but, that shows the complexity of the question and why a valid result can’t be easily determined. In short, no one carrier or consultant can provide you with a definitive figure that will be relevant to your results until your data collection methodology has reached maturity.  “How does that happen,” you may ask?  The answer is, “Through a series of steps.”

Step One—You need to plan. Do you have a true strategic, multi-year plan for your wellness program?  If you had to pause for even a second before responding to that question, the answer is likely no.  Planning involves the involvement of multiple stakeholder groups within your organization, from the C-Suite to those who will be your day-to-day champions, as supported by the Harvard Business Review article, “Meet the Programs That Save Companies Money”, 2016.  These individuals need to provide input on what is needed for the program to be a success from each of their vantage points.  These expressed needs have to be synthesized into goals and distilled into a multi-year plan.  This will allow you to structure your data collection in a consistent manner.  That leads us to our next step.

Step Two—You need to measure, as supported by the Optum/NBGH whitepaper, “Beyond ROI: Building an Employee Wellness Value on Investment”, 2015.  Typically, there are two main data segments that can be viewed, data collected from surveys and data collected from member participation (HRA, biometrics, etc.) and claims.  Surveys will gather the qualitative components you want to measure from a member process satisfaction perspective, along with some self-reported outcomes data, e.g. presenteeism, absenteeism, general health and wellbeing improvements, etc.   Member participation and claims present the most meaningful quantitative data to support your wellness goals, as this is where the ultimate efficacy of a health and wellness program will be proven—investing on the “front end” should drive down costs through better health and wellbeing.  You will need to ensure you have measured appropriate baselines for trending comparisons that match to the parameter of each wellness plan.  You should have a baseline that begins at the inception of your program—the claims before you started, as well as, any self-reported data.  In order for this step to work properly, you will need to ensure that the wellness vendor you have chosen has the capacity to fully deliver on your plan design

Step Three—You need to review and adjust. While an annual analysis of collected data provides a natural review touchpoint, you should be reviewing data on a quarterly or monthly basis so that necessary adjustments and course-corrections can be made in a more immediate format. Not only can the program be adjusted based on the data, e.g. having program features that are correctly aligned to your strategic plan, it also provides you with the ability to determine whether you are collecting the correct data or data in the correct way.


With all three steps in perspective, you will most likely need at least a three year timeline over which to collect and measure data. If you haven’t had time to comply with this approach, then, your data hasn’t reached a level of maturity necessary to accurately and individually measure your performance benchmarks.  In closing, the calculation of a true ROI/ROV isn’t something that can be projected until your data is collected and analyzed.  Anyone providing forecasts to the contrary is doing you and your wellness program a huge disservice.