That makes it difficult for employers to interpret and compare individual vendors' wellness ROI claims, let alone come up with an overall ROI measure.

    "I think a mistake that many employers make is they accept an ROI performance guarantee from a health plan or a wellness vendor and get a report at the end of the year…that shows the ROI target has been met to prove that they have a successful program … when in fact the entire set of calculations can be bogus," said Joe Marlowe, a senior vice president and national health care practice leader for Aon Consulting in Radnor, Pa.

    Increasingly, corporate health leaders and health-care accreditation organizations are taking matters into their own hands. When Lillian Petty was senior manager of benefits at Schlumberger Ltd., a Houston-based oil and gas industry services company, she was frustrated with the ROI figures that wellness vendors cited because they weren't based on industrywide standards and they couldn't be extrapolated to determine the company's overall ROI on wellness. She wanted a single number she could report to her chief financial officer as an offset to health-care costs on the company's profit and loss statement.

    Today, as president of the Alliance for Wellness ROI, Ms. Petty is leading an effort to inject a measure of accountability into the process, not only for the fees that companies pay but for the impact on a work population's health.

    Along with Schlumberger, founding alliance members BMW of North America LLC, Kraft Foods Global Inc., MasterCard Worldwide and Henry Ford Health System are working with a team of actuaries, consultants, financial advisers and wellness experts to define the idea of wellness and build a model for measuring the overall financial return on a company's wellness programs.

    "We're at the infant stage of defining standards of how you collect data, how you measure financially the impact," said Ms. Petty.

    Now in its fourth year of collecting data, the Alliance has found that companies with mature wellness programs have an "integrated," or overall, ROI of $2.30 to $2.60 for every dollar invested, according to Steven Villella, vice president and health and welfare practice leader at Touchstone Consulting Group in Worcester, Mass. Vendors typically report gross savings, so their ROI numbers are higher, he said, but the Alliance excludes the wellness expense to reflect net savings only.

    In a similar vein, Dr. David Rearick, vice president of medical management at Strategic Benefit Solutions, measures what he calls "value on investment," or VOI. It's more useful to HR directors and CFOs than ROI, he said, because it reflects health-care costs, utilization and quality of care, as well as financial return.

    "When you're talking about improving the health status of a population, you need to look at more than just the financial aspects," Dr. Rearick said.

    Both the National Committee for Quality Assurance and a nonprofit health-care accrediting agency known as URAC will soon roll out wellness accreditation programs that include an ROI component. Rather than telling wellness vendors how to compute this financial measure, the accreditation organizations will require vendors to disclose the methods used to calculate ROI.

    "We are not defining an ROI methodology at this stage. We are saying transparency is king," said Patricia Barrett, NCQA's vice president of product development in Washington.

    Employers need to be able to make "apples to apples comparisons from one wellness program to another," said John DuMoulin, URAC's vice president of government relations, product development and education in Washington, "and they see accreditation as a way to help do that."

—Crain's Benefits Outlook Online,  November 2008

Karen Pallarito is a reporter for Business Insurance in New York. To comment, e-mail editors@workforce.com.