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Estimating the Return-on-Investment From Changes in Employee Health Risks on The Dow Chemical Company's Health Care Costs

Goetzel, Ron Z. PhD; Ozminkowski, Ronald J. PhD; Baase, Catherine M. MD, FAAFP, FACOEM; Billotti, Gary M. MS

Journal of Occupational and Environmental Medicine: August 2005 - Volume 47 - Issue 8 - p 759-768
doi: 10.1097/01.jom.0000172868.05935.67
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Objective: We sought to estimate the impact of corporate health-management and risk-reduction programs for The Dow Chemical Company by using a prospective return-on-investment (ROI) model.

Methods: The risk and expenditure estimates were derived from multiple regression analyses showing relationships between worker demographics, health risks, and medical expenditures.

Results: A “break-even” scenario would require Dow to reduce each of 10 population health risks by 0.17% points per year over the course of 10 years. More successful efforts at reducing health risks in the population would produce a more significant ROI for the company.

Conclusions: Findings from this study were incorporated into other components of a business case for health and productivity management, and these supported continued investments in health improvement programs designed to achieve risk reduction and cost savings.

From Medstat and Cornell University, Washington, DC (Dr Goetzel); The Dow Chemical Company, Midland, Michigan (Dr Baase, Mr Billotti); and Medstat and Cornell University, Ann Arbor, Michigan (Dr Ozminkowski).

Supported by the Dow Chemical Company.

The opinions expressed in this work are the authors' and do not necessarily reflect the opinions of The Medstat Group, Inc., Cornell University, or The Dow Chemical Company.

Address correspondence to: Ronald J. Ozminkowski, PhD, The Medstat Group, Inc., 777 East Eisenhower Parkway, 804B, Ann Arbor, Michigan 48108; E-mail: ron.ozminkowski@medstat.com.

Copyright © 2005 by the American College of Occupational and Environmental Medicine