Quick Links: Return to Case Study Archives

Metrics matter: Wellco Corp.

Scott-FosterA rising star in the crowded health care consulting galaxy, Wellco is making a name for itself by leveraging data to fix companies’ wellness programs and reduce overall health care costs.

Health care costs have been increasing at an annual rate of 10 percent or more, points out Scott Foster, founder of Wellco, which is based in Royal Oak, Mich. “What’s more, the average employer spends more than $10,000 per employee on medical costs each year, and about 95 percent of those dollars go toward sick care, which is controllable.”

Lack of awareness is a large part of the problem. “Executives are way off on how much they spend on avoidable health care costs because they devote little time to it,” Foster explains. “They view health care as a benefit rather than an operational cost and relegate it to a line-item budget issue in their HR department.”

In response Wellco has developed proprietary technology to collect and crunch health care data — and align it with operational metrics that enable CEOs to make better decisions. For example, the company’s HealthHammer system analyzes medical claims, avoidable costs, biometrics and health risks of employees. Then it produces dashboards that identify potential dollar savings in terms of lower medical care and absenteeism and higher productivity. Named for its ability to flatten increasing health care costs to a “zero trend,” HealthHammer has achieved a return on investment of nearly $3 for every $1 spent on wellness programs.

“There’s been a lot of buzz around employee wellness, but most programs have no data to show if they’re working — and they’re not an operational priority,” Foster says. “Companies may offer lunch-and-learn sessions with a visiting nurse or ‘biggest loser’ contests, but these events aren’t integrated into operations. They try it, then get busy or staff turns over, and two years later, the wellness program is gone.”

By providing meaningful metrics and making wellness an ongoing priority, Wellco has been able to reduce overall health care costs for clients by more than 20 percent.

Launched in 1996, Wellco now has 15 employees and is approaching $3 million in annual revenue — and has become a market leader in Michigan. In 2010 it began to pursue external markets and today more than 60 percent of Wellco’s customer base lies outside Michigan, including clients in Wisconsin, Illinois, Indiana, Ohio, Pennsylvania, Virginia and Florida.

Expanding its geographical footprint and moving into second stage have been important milestones, Foster says. “As a second-stager, we have more confidence to decline activities and customers that don’t fit our vision, which is a freeing experience that further jumpstarts growth.”

And for Foster, growth isn’t just about increasing Wellco’s bottom line. “By transforming sick care into preventive care, we’re helping companies become more competitive,” he says. “Reducing health care costs not only translates into capital that can be funneled into new opportunities — it also means healthier, more productive employees.”

Related Articles...
Keeping it real for model railroaders: SoundTraxx

An electronic design engineer and model train enthusiast, Steve Dominguez began creating light and sound systems for his trains in the late 1980s.

Read More ...
On the same wavelength: Von Technologies

A rising star in the crowded telecommunications cosmos, Von Technologies LLC ranked 17th on this year’s list of the 50 Fastest Growing Women-Owned/Led Companies released by the Women Presidents’ Organization (WPO) and American Express Global Corporate Payments.

Read More ...
Giving more – and giving back – is MGB’s blueprint for growth

Green construction and luxury homes might sound like an oxymoron — but not to Stephen Ellis and Grant Castilow.

Read More ...
You are what you speak: Mango Languages

CEO and “linguapreneur” of Mango Languages, Teshuba launched the Farmington Hills, Mich.-based company in 2007 to create innovative language-learning products. Today the company generates more than $8 million in annual revenue and has more than 60 languages in its lineup.

Read More ...
For good measure: A+ Corporation

A designer and manufacturer of analytical sampling systems, A+ Corporation LLC in Gonzales, Louisiana, has a long track record of innovation with 29 current patents and another 10 pending.

Read More ...