Companies are investing more in health and productivity management (HPM) programs in an effort to stem rising health care costs, yet have found it difficult to evaluate their economic return, impact on employee health status and overall return on investment. Now there is an accurate way for employers, insurers and consultants to evaluate the return on investment of these employee health care initiatives. In a roundbreaking article published in the July/August 2006 issue of American Journal of Health Promotion - The Art of Health Promotion, Mercer Health & Benefits consultants Seth Serxner, Kristin Baker and Daniel Gold present a standardized process for the development of economic analysis guidelines for HPM programs.
Their article provides a workable approach to evaluation of HPM programs through the application of scientifically valid statistical models in the context of real-life limitations that are commonly associated with actual health care data bases. Peer reviewed by a cross-section of industry experts from insurance carriers, vendors, academia and non-profit organizations, the guidelines are now being tested by the RAND Corporation using data from a Mercer client. Final results of the RAND analysis are expected before the end of 2006.
"Actuaries, underwriters and consultants have long needed a credible approach to projecting trends for their clients with care management programs," said Dr. Serxner. "This research was in response to demand from Mercer clients who were asking us to negotiate performance guarantees with vendors and help determine expected savings from these programs."
Investments to foster employee health are widely regarded as one of the most promising cost management strategies available to employers today, and most have incorporated it, to at least some degree, into their health benefit programs. A recent Mercer survey of more than 600 for-profit and nonprofit US employers found that 19% of respondents with 5,000 or more employees offer a comprehensive health management
program with employee outreach, reinforced by a corporate culture that supports a healthy lifestyle. The cost of such programs vary along with their comprehensiveness; among all surveyed employers who provide at least one type of HPM program, the median total annual budget for the program was $25,000; among those with 5,000 or more employees, it was $200,000.
"Employers are under competitive pressure to enhance productivity and control headcount. By addressing the entire health continuum, health management seeks to keep healthy people healthy, to reduce lifestyle-related health risks that contribute to future costs, absences, and work-related injuries, and to help those affected to improve their health and better manage their condition," said Dr. Gold.
"Guidelines for Analysis of Economic Return from Health Management Programs," by Seth Serxner, Kristin Baker and Daniel Gold, appears in the July/August 2006 issue of American Journal of Health Promotion - The Art of Health Promotion. An electronic copy of the article may be requested from Stephanie Poe (Stephanie.Poe@mercer.com).
Mercer Health & Benefits is a business of Mercer Human Resource Consulting, a global leader for trusted HR and related financial advice and services, which has more than 15,000 employees serving
clients in over 180 cities and 40 countries and territories worldwide. The company is a wholly owned subsidiary of Marsh & McLennan Companies, Inc., which lists its stock (ticker symbol: MMC) on the New
York, Chicago, Pacific and London stock exchanges.
