Study: No Quick Savings From Workplace Wellness
Your bosses want you to eat your broccoli, hit the treadmill and pledge you'll never puff on a cigarette. But a new study raises doubts that workplace wellness programs save the company money.
In what's being called the most rigorous look yet inside the wellness trend, independent researchers tracked the program at a major St. Louis hospital system for two years. Hospitalizations for employees and family members dropped dramatically, by 41 percent overall for six major conditions. But increased outpatient costs erased those savings.
The study in Monday's issue of the journal Health Affairs has implications for a debate now taking place at companies around the country: how much pressure can you put on workers to quit smoking, lose weight, and get exercise before it turns into unwelcome meddling, or worse, a slippery slope toward a new kind of health discrimination?
Wellness programs started out offering gym memberships and modest cash rewards for participating in a health assessment focused on changing bad habits. But employers have been upping the ante, linking the programs to insurance discounts or penalties that can add up to hundreds of dollars.
Most major companies now have wellness programs, and smaller firms are signing up. President Barack Obama's health overhaul law allows employers to expand rewards and penalties, provided workers are also given a path to address lifestyle issues that could undermine their health.
"The immediate payback in terms of cost is probably not going to be there," said economist Gautam Gowrisankaran of the University of Arizona at Tucson, lead author of the study. But he noted there could be other benefits not directly measured in the study, such as reduced absenteeism and higher productivity.
And there's also a risk. "It's definitely true that there is a downside," Gowrisankaran said. "You are going to be charging people different rates based on their wellness behavior, and that could limit their ability to buy health insurance."
Obama's law forbids insurers from charging more if you get sick. But wellness incentives could mean you'd be penalized for the questionable choices that might get you sick.
Some previous studies have shown savings from wellness programs, while others found little change or even higher spending.
Steven Noeldner, an expert with the Mercer benefits consulting firm says well-designed programs generally show a positive return of about 2 percent by the third year.
Gary Claxton of the Kaiser Family Foundation, which produces a widely-cited annual survey of workplace health plans, says the financial impact is difficult to measure. "A lot of employers think it's the right thing to do and they're not so much interested in measuring," said Claxton.
The new study provides an in-depth look at the experience of BJC HealthCare, a hospital system that in 2005 started a comprehensive program linked to insurance discounts. BJC currently employs 28,000 people and provides health insurance for about 40,000, including family members. The overwhelming majority participated in the wellness program.
The program focused on six lifestyle-influenced conditions: high blood pressure, diabetes, heart disease, chronic lung problems, serious respiratory infections, and stroke. Employees had to join the program in order to get the hospital's most generous level of health insurance, called the Gold Plan. For family coverage, for example, the hospital paid nearly $1,650 more of costs in the Gold Plan.
Employees in the wellness program had to complete a health risk assessment that included height, weight, blood pressure, cholesterol, blood sugar and other measurements. They also signed a pledge to maintain a healthy diet and exercise regularly. Smokers had to get help to quit. Spouses were also required to sign the health pledge and, if they smoked, get help.
The study tallied up BJC's medical costs before the wellness program and for two years after. It also compared those costs with expenses of two other big local employers that did not have wellness programs. That was done to control for the possible impact of new drugs or medical innovations.
The results were counter-intuitive: A surprisingly large drop in hospitalizations for the six conditions targeted by the wellness program, but increased costs for medications and outpatient visits. When those were added to the cost of the wellness initiative itself, "it is unlikely that the program saved money," the study concluded.
BJC President Steven Lipstein said he doesn't dispute the conclusion, but he remains committed to the wellness program and would invite the researchers to take another look now.
Is the program saving money? "I do not know that," said Lipstein. "I can tell you that our health benefit expenses go up every year."
Lipstein said encouraging employees to make healthy lifestyle decisions and rewarding those who do reflects corporate values, not just the bottom line.
"It's not easy to change human health outcomes in the short term," he added. "When you make an investment in wellness and prevention you shouldn't expect an immediate return."