Workplace wellness program usually don’t work?

corporate wellness programs

Corporate wellness programs are more popular than ever, but that doesn’t mean they actually work. Even though many companies use financial incentives to motivate workers to improve their health, they don’t necessarily produce the desired results, which come in the form of happier (and thus more productive) employees and reduced health costs.

Additional health screenings built into the programs encourage overuse of unnecessary care, pushing spending higher without improving health.What’s missing is solid research to prove the effectiveness (or their lack off) of these programs. According to the New York Times’ article, most studies of wellness programs are either of poor quality, or they consider only short-term effects that aren’t likely to be sustained, or are written by the wellness industry itself.

In contrast, more rigorous studies tend to find that wellness programs don’t save money and, with few exceptions, do not appreciably improve health. This is often because additional health screenings built into the programs encourage overuse of unnecessary care, pushing spending higher without improving health.

On the other hand, some wellness programs achieve cost savings but not in the way employees necessarily like it. Some of these shift higher costs of care onto workers, particularly those who don’t meet the demands and goals of wellness programs. This way financial incentives are turned into financial penalties to workers who resist participation or who aren’t as fit.

By raising the legal limit on penalties that employers can charge for health-contingent wellness programs to 30% of total premium costs, the Affordable Care Act encourages this approach. Moreover, employers can also charge tobacco users up to 50% more in premiums.

The Kaiser survey found that 71% of all firms think such programs are “very” or “somewhat” effective.Another way that wellness programs can help employers is by putting a more palatable gloss on other changes in health coverage. For instance, workers might complain if a company tries to reduce costs through higher cost sharing or narrower networks that limit doctor and hospital choice. But if these are quietly phased in at the same time as a wellness program that’s marketed as helping people become healthier, a company might be able to achieve those cost reductions with less grumbling.

There is, however, one solid study proving that a wellness program can achieve long-term savings. In 2003, PepsiCo introduced what later became its Healthy Living program, which included lifestyle management and disease management components. A study published in Health Affairs examined the outcomes of the program seven years after implementation, the longest such study of a wellness program to date.

Researchers found that participation in the PepsiCo program was associated with lower healthcare costs, but only after the third year, and all from the disease management components of the program. The conclusion was that wellness programs that target specific diseases that may drive employer costs could achieve savings, though perhaps only after several years. When more broadly implemented and focused on lifestyle management, as many wellness programs are, savings may not materialize, and certainly not in the short term.

The lack of evidence doesn’t stop the growth of wellness programs, which have grown into a $6 billion industry. The Kaiser survey found that 71% of all firms think such programs are “very” or “somewhat” effective, compared with only 47% for greater employee cost sharing or 33% for tighter networks. And employers are ready to put their money where their mouth are; last year, medium-to-large businesses spent an average of $521 per employee on wellness programs, which is double the amount they spent five years ago, according to a February report by Fidelity Investments and the National Business Group on Health.

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