Welcome to Wellness 2.0

Corporate wellness has evolved in fits and starts since the first executive gyms appeared after World War II. But despite continuing concerns regarding the effectiveness of employee wellness programs, the industry has exploded in recent years.

Focusing efforts on the sickest workers and paying or punishing people to get healthy have become common practices, but some employers are taking a different approach and ditching financial incentives, embracing the importance of emotional health and redefining the concept of return on investment.

The hard-dollar approach of measuring money spent on wellness efforts against health care dollars saved is giving way to a more nuanced view that values softer benefits like employee morale and company loyalty. And more employers are abandoning carrot-and-stick methods such as offering or withholding discounts on insurance premiums to get employees to participate. Instead, companies are creating environments designed to make wellness easy and fun.

Even the term “wellness” is falling out of favor as more companies adopt a holistic approach that includes emotional and financial well-being, according to LuAnn Heinen, vice president at the National Business Group on Health, an employer advocacy group based in Washington, D.C.

“We’re moving from wellness to well-being,” said Heinen,who heads up the group’s Institute on Innovation in Workforce Wellbeing. “In traditional wellness programs, we measure success by participation and ROI on medical costs, but in today’s approach it’s not about ROI. It’s about productivity, and business metrics, and retention, and customer satisfaction. It’s not about health and benefits in silos, but about broader well-being, and that includes social connectedness, financial security, emotional health and job satisfaction. The old way of getting everybody to do the same thing is being abandoned.”

Value of Investment

The number of employers embracing this approach is growing rapidly, according to a 2015 survey by U.K.-based insurer Willis Group. Sixty-four percent of employers with wellness programs are more focused on “value of investment” compared with 28 percent who indicate that they are more focused on “return on investment,” the survey found. “More organizations are realizing that the expectation of an immediate return on investment (ROI) for their wellness programs through medical-cost reduction may be unlikely,” according to the survey.

At Kimberly-Clark Corp., which launched its wellness program in 1975, health care costs are a top concern, but ROI doesn’t factor into the wellness program, said Stephanie Pereira da Silva, health and wellness manager who oversees the company’s wellness initiatives.

“We don’t track it,” she said. “Companies can really manipulate those numbers in their favor. We look at participation rates and long-term behavior change. We have online medical records dating back to the ’70s, so we can see if a program is successful. Do we care about the numbers? Absolutely we do. We track health care costs, but it’s not tied to our wellness program.”

The Irving, Texas-based producer of personal care products also bucked the wellness incentives trend. That approach didn’t fit with the company’s philosophy that culture can be a greater influence on behavior than punishments and rewards, according to Pereira da Silva.

“We take a more reserved approach to wellness,” she said. “When everybody jumped on the bandwagon of tying health insurance incentives to behaviors, reward and punishment, we didn’t jump. If you look at the trend over the years, companies are backing away from that approach. We are trying to create a culture of wellness. We don’t want to penalize you.”

Kimberly-Clark, which has 43,000 employees in 37 countries, employs a cadre of health professionals and volunteers that operate its exercise facilities and wellness programs around the world, including a dozen occupational nurses.

The focus on and fretting over the return on investment of wellness is misguided, said Michael Staufacker, director of health management at Emory University.

“We look at things like reducing employee health risks, improving employee productivity, job satisfaction, business performance metrics,” he said. “Are we retaining and recruiting the employees we need? Are we improving employee morale? It’s not expected that we prove ROI for other benefits. We don’t expect the health plan or EAP to show ROI, so why should we expect it of wellness?”

Instead, the university is focused on creating an environment that encourages employees to get healthy by making it convenient and fun, Staufacker said. It launched its wellness program, called Healthy Emory, in 2013.

The university provides maps of campus art walks and green spaces to employees and students, it deploys employee volunteers to promote various wellness programs and events, hosts a weekly farmer’s market, offers discounts on bikes and Fitbit wearable fitness trackers, sponsors health challenges throughout the year, and provides healthy food in its cafeterias and vending machines, among other initiatives.

“When we developed Healthy Emory, we thought about how to positively influence behavior, and we identified several areas, like environment, culture, community and using the resources we have as a world-class health care system,” he said. “Traditional wellness programs that only focus on a small aspect of health and well-being probably have only a small positive influence on health and productivity.”

It’s About Health, Not Money

Ann Mirabito, a Baylor University business professor, said the most effective wellness programs — ones that lower health care costs, increase productivity and improve morale — have certain traits in common.

The best ones actively involve the CEO and other leaders, are in sync with the company’s mission and business goals, recognize the importance of emotional health and are fun, she said.

“The ideology behind successful workplace wellness programs is that employees deserve to be healthy, not that this is a great way to save money for the company,” she said.

She likens the most successful wellness programs to social movements, which grow from the ground up.

“Wellness programs cannot be imposed from the top down because they won’t be accepted by the employees,” Mirabito said. “Successful programs are created by the employees. Organizations that have this culture have created social norms around healthy behaviors. They have worked hard to reduce barriers to wellness by making healthy food convenient and available, making it easy to exercise, to get flu shots or to take care of their chronic illnesses.”

Punishing employees who fail to change their behavior is sure to fail, added Henry Albrecht, CEO of Limeade, a Bellevue, Washington-based company that offers an online platform that encourages employees to adopt healthy habits.

“For the last 15 years, wellness was focused on singling out the weak and reducing health risk and cost,” he said. “That makes sense on paper, but it doesn’t make any sense from a behavioral science point-of-view. People don’t change because there is something wrong with them or by giving them lots of money. That’s only good for one-time tasks like screenings.”

Limeade’s platform allows employees to create personalized health plans based on their location, job and health assessment data, among other factors, and to track their progress. Incentives are part of the program but are tied to reaching various health goals. Employees can earn cash, gifts or paid time off.

“Our philosophy has always been to find fun and simple technology-based ways to help employers get people to improve their health, not because they are expensive to insure but because they believe that an engaged, high-performing, high-morale workforce drives business,” Albrecht said.

That is especially true among health care providers where burnout is high and stressed-out workers can affect patient care. At Cincinnati Children’s Hospital Medical Center, nearly 80 percent of its 15,000 employees are women, and the average age of its workforce is 39, which means a good number are caring for both children and parents, according to Rachael Grile, a human resources specialist who manages the hospital’s wellness programs. Not surprisingly, a large number of employees struggle with anxiety, depression and insomnia.

So when the hospital began developing its wellness program in 2010, addressing those needs was a top concern. “Our population works with complicated and difficult situations involving children so we wanted to focus on the emotional aspect of health,” she said. “For our employees, work-life balance is a blur. What happens at work comes home and what happens at home comes to work.”

The hospital partnered with Limeade to launch MyHealthPlan in 2011. Before then, there was no formal wellness program, “just a few lunch and learns and some fitness classes,” she said. Nearly 80 percent of the hospital’s workforce participates in MyHealthPlan, Grile said.

While the program started with a focus on physical health, it evolved to include programs that address emotional needs, like stress management, financial health, career growth, and social and community connections.

“We have a variety of different financial seminars on budgeting, raising money-smart kids, and we push employees to volunteer, to participate in the United Way or Paint the Town, which is an effort to beautify neighboring communities,” Grile said. “We opened an employee care clinic with on-site mental health counselors, health coaches and nurse advocates.”

This spring, the hospital plans to offer a six-week cognitive behavioral class to treat insomnia. Participants will learn relaxation techniques, habits for good sleep and how to cope with nightmares.

With workplace stress levels rising and costing employers billions in lost productivity each year, the demand for programs that help employees manage their mental health is growing. The concept of mental resilience is generating interest among employers looking to teach employees how to weather tough times.

“Employers are making the connection that our heads are connected to our bodies,” said Jan Bruce, CEO of MeQuilibrium, a Boston-based firm that developed an online employee stress management program. “We spend a lot of time motivating people, creating incentives to take better care of themselves physically but it doesn’t get the job done. The prevalence of stress has changed radically in the past five years, and that has catapulted employers and people in HR to think about the importance of addressing the emotional well-being of the population.”

All of these developments — from dropping the carrots and sticks to recognizing the effect of mental and emotional health on the bottom line to redefining value — is a sign that wellness programs are maturing, and that bodes well for their future, Mirabito said.

“Wellness experts and employers have a deeper understanding of how wellness contributes to the organization,” she said. “There’s a better understanding of the costs of chronic illness, not just in terms of out-of-pocket health care costs, but the human toll and impact on the organization.”