Health promotion programs for the workplace are often sold to employers with the promise that they will pay for themselves with lowered health care expenditures and reduced absenteeism. In a recent review of the literature, it was noted that analysts often caution not to expect a positive return on investment until the third year of operation.
This study investigates whether a positive return on investment was generated in the third year for the health promotion program used by the University of Minnesota. It further investigates what it is about the third year that would explain such a phenomenon.
The study uses health care expenditure data and absenteeism data from 2004 to 2008 to investigate the effect of the University’s lifestyle and disease management programs. It also investigates the effectiveness of participation in Minnesota’s 10,000 Steps walking program and Miavita self-help programs.
A differences-in-differences equations approach is used to address potential selection bias. Possible regression to the mean is dealt with by using only those who were eligible to participate as control observations. Propensity score weighting was used to balance the sample on observable characteristics and reduce bias due to omitted variables.
The study finds that a 1.76 return on investment occurs in the third year of operation that is generated solely by the effect of disease management program participation in reducing health care expenditures. However, neither of the explanations for a third-year effect we tested seemed to be able to explain this phenomenon.