Dive Brief:
- Workplace wellness programs, which are designed to help employees become more healthy, are very popular with employers. According to RAND Corp., half of all companies with 50 or more employees have them, generating a $6-billion-a-year industry.
- But do they work? According to research by the Kaiser Family Foundation examining companies that sponsor their own health plans, growth in premiums was as low in 2013 as it has ever been in the 16 years of the survey. Clearly something is working to hold costs down. But as it turns out, wellness programs probably had little to do with it.
- Most of the research that exists on workplace wellness programs, in fact, uses weak methods suggesting that wellness programs are associated with lower savings, without proving causation. More rigorous studies suggest that wellness programs don't save money and rarely improve health.
Dive Insight:
Despite the enthusiasm for lifestyle-oriented wellness management programs, they are typically geared to generate short-term results, and generally don't succeed. That being said, while workplace wellness programs may not save money by improving health or care efficiency—in fact, these programs may encourage needless care because they often include unnecessary additional health screenings—they may help employers cut costs in other ways.
For example, employers may save money on health insurance by financially penalizing employees who don't meet the goals set by such programs. This approach is actually encouraged by the ACA, which raised the penalties that employers can charge for health-contingent wellness programs to a whopping 30% of total premium costs. And employers can charge smokers 50% more in premiums.
To actually cut health costs with wellness programs, employers must set long-term goals, according to a study appearing in Health Affairs.The Health Affairs study, which looked at the results of PepsiCo's HealthyLiving program over seven years, found that all of the savings came from disease management aspects of the program targeting costly illnesses such as COPD, congestive heart failure, stroke and diabetes. These savings didn't appear until year three of the program.