Applied Materials                     Evaluation Summary

The Applied Materials Wellness program seeks to improve employee health and productivity by reducing employee health risks, managing medical care expenditures, and improving worker productivity. A quasi experimental research design was employed to assess the economic impact of the program. Participants and non-participant medical, absenteeism, and disability costs were compared over a multi-year period. Multivariate methods were used to estimate the impact of program participation on medical-, short-term disability (STD), and absenteeism-related expenditures, controlling for demographic and other relevant differences between program participants and non-participants. The program produced savings which were calculated as the differences in overall expenditures (medical, STD, absence) between participants and non-participants over the two-year study period (1995 and 1996). 
Participants were classified as either high- and low-level based on their length of participation, with the high-level group participating in both study years and the low-level group in only one year. High-level participants experienced lower overall expenditures  compared to non-participants, which accounted for savings estimated at $74,599 after adjusting for relevant group differences. The greatest contributions to the savings were from lower inpatient medical and reduced disability costs.
A longitudinal analysis was conducted that compared the rate of expenditure change for participants and non-participants. The rate of change for the high- and low-level participants was represented as 1996 expenditures less 1995 expenditures and is compared to the non-participant group. In general, high-level participants showed favorable expenditure trends compared to non-participants, with total medical expenditures for high-level participants decreasing $38 per year more than non-participants.
Additional descriptive findings also showed that high-level participants had better expenditure and utilization results compared to both low-level participants and non-participants. In 1996, high-level participants had much lower inpatient days per 1,000 employees (8), admissions per 1,000 employees (5.3), and average length of stay (1.5 days) than either low-level participants (77, 17.7, and 4.4, respectively) or non-participants (91, 26.3, and 3.4, respectively). Also in 1996, high-level participants had lower inpatient cost per case ($4,721) and outpatient cost per service ($53) than either the low-level participants ($13,057 and $64, respectively) or the non-participants ($7,345 and $62, respectively). High-level participants displayed a lower STD duration rate and a lower attrition rate than non-participants.
These finding suggest that increasing the number of high-level participants would yield greater financial benefit to Applied Materials. Continued tailoring of the program structure (i.e. incentives, communications) to keep high-risk employees engaged in wellness activities has the potential to improve their overall health and reduce their financial risk to Applied Materials.