Workplace Wellness Programs Fall Short of Goals

Workplace wellness programs are gaining popularity in the United States, however a new study by RAND Corporation shows that the 6 billion dollar wellness program industry does not produce the intended healthier outcomes.

People believe these programs to be beneficial by providing outcomes such as weight loss and reductions in smoking and cholesterol. Many in the industry think that if employees are healthier through preventative measures, then medical spending will decrease.

In the Reuters article, Business Roundtable Vice President Maria Ghazal stated “companies from the CEO on down feel that these programs are bringing value.”

The Affordable Care Act (ACA) required analysis to determine the results of wellness programs and RAND was awarded the contract. RAND analyzed 600 companies with over 50 workers. Information about the health of employees was collected by medical claims from the Care Continuum Alliance. According to the Reuters report, the RAND report was published briefly online last Friday, but it was immediately taken down because federal agencies were not yet ready for its release.

The RAND Corporation found that wellness programs do not result in significant cost savings or healthier employees on average.

Any savings were statistically insignificant according to RAND. RAND estimated that in the first year, participants cost $2.38 less on average than employees that do not participate. In the fifth year the number inches up to a saving of $3.46 on average. Even with the modest savings, the key takeaway point is that the results are statistically insignificant which means savings could have happened by coincidence or due to some other omitted factors.

Furthermore, the study does not show great health improvements. Reuters reports the following health outcomes from the study:
• There was not a significant decrease in total cholesterol
• Evidence shows that wellness programs reduce smoking, but solely in the “short-term”
• Wellness program participants lose one pound per year on average, for a three year timespan.
• "We do not detect statistically significant decreases in cost and use of emergency department and hospital care"

The RAND study is important for the Affordable Care Act and businesses because the reform will allow employers to award employee participation in wellness programs. Participating employees will be able to enjoy a subsidy equivalent to 30 percent of the value of insurance premiums. However, companies are not experiencing any real savings to offset the cost of the subsidy. Employee subsidies could become a new cost for companies.

While wellness programs do not result in savings or healthier employees, it is important to remember that not all programs are created equally. In Reuters, Keith Lemer, the President of WellNet said “traditional workplace wellness barely scratches the surface". . . "done right, (the program) requires the integration of clinical data, wellness, health coaching, and work flow."