Wellness works: well-designed wellness programs are proving to help not only employee waistlines but company bottom lines. Here is a look at some innovative programs that are working.

• Author: Bolch, Matt
• Position: Benefits

Health risk assessments. Biometric screenings. Weight loss challenges. Lunch-and-learns. Healthy offerings in break-room vending machines. Wellness programs are all the rage these days among employers large and small.

While this focus on healthier lifestyles certainly sounds like a logical way to improve productivity, reduce absenteeism and save on health care costs, does it work?

Nearly eight in 10 respondents to Mercer's National Survey of Employer-Sponsored Health Plans 2011 say that wellness is the key strategy to address rising health care costs in their organizations, says Steven Noeldner, a partner at Mercer.

"We're seeing the prevalence of wellness programs increase time after time in surveys and in the numbers of employers trying to measure the health improvement, the financial impact and the ROI," says Noeldner. "Companies are interested in results."

As wellness moves beyond a warm and fuzzy benefit to one that has great potential to lower employee health risks and save money, the question of how to measure success becomes vital to the C-suite. Not all analysis is created equal.

Consultants such as Mercer and vendors are engaging in a national dialogue to try to reach consensus on standard ways to design and measure wellness efforts "so clients really can compare," Noeldner says.

Following the same group of people over time as they (hopefully) lower their health risks, their body mass index scores, blood pressure and other measures is one way to demonstrate results. But companies need to be confident in the design of each wellness initiative and understand how their return on investment will be determined. The Mercer survey shows that incentives should be an important part of any lifestyle program. Participation in health assessments and programming nearly doubles when incentives are offered.

Using rigorous methodology, Noeldner says Mercer clients' average return from wellness programs is $2 and $3 for each dollar expended, beginning three to five years after a program is started. If a provider makes more ambitious claims, it's wise to double up on the due diligence to make sure those figures can be validated.

And if the company takes a more global view of wellness as part of a total rewards strategy, maybe hard-dollar ROI isn't a goal. For companies with more than 3,000 employees, most leading vendors include analysis for wellness programming as part of their fee structure.

Wellness in Action

The following are vignettes from four companies that take wellness--and ROI measurement--seriously.

NATIONWIDE MUTUAL INSURANCE CO.

Health plan costs for Columbus, Ohio-based Nationwide Mutual Insurance Co. are 27 percent lower than other financial and insurance services companies and 36 percents lower than other clients of its health plan.

Kathleen Herath, associate vice president of health and productivity, attributes a large part of the company's low health care costs to robust wellness and disease management programs that are reducing...