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A New Look at Wellness and a Company’s Financial Performance

OK, so you’re investing a fair amount of money in your wellness program. What’s the payoff for your company’s shareholders?

A recent article in the Journal of Environmental Medicine (September 2013, Volume 55, Number 9) took an intriguing approach to that question. Most researchers try to calculate an ROI from wellness programs. But this group of nine health policy analysts and MDs took a big picture view. They looked at the stock market returns of companies known as wellness leaders and compared those returns with the broader stock market.

Here’s how. They started with the Standard & Poor’s 500 Index, a common benchmark of the broader U.S. stock market’s performance.  Then they compared four hypothetical stock portfolios comprised of winners of the American College of Occupational Medicine’s Corporate Health Achievement Award. In every comparison, the healthy companies outperformed the broader market index by a wide margin, by anywhere from 75 to 95 percent.

The researchers concluded that focusing on the health and safety of a workforce can improve productivity and those improvements may well be reflected in the company’s stock performance.

“Engaging in a comprehensive effort to promote wellness, reduce the health risks of a workforce, and mitigate the complications of chronic illness within these populations,” they concluded, “can produce remarkable impacts on health care costs, productivity, and performance.”

Although they acknowledged that correlation is not the same as causation, the researchers observed that a growing body of research suggests that companies focusing on the health and safety of their workforce are yielding greater value for their investors. “Evidence seems to be building that healthier workforces provide a competitive advantage in ways that benefit their investors,” they wrote.

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