Are Corporate Wellness Programs a Boon or Boondoggle?
June 18, 2013
The U.S. Patient Protection and Affordable Care Act In background materials Evidence shows, the agency claims, that "workplace health programs have the potential to promote healthy behaviors; improve employees' health knowledge and skills; help employees get necessary health screenings, immunizations, and follow-up care; and reduce workplace exposure to substances and hazards that can cause diseases and injury." In an interview, Tom Emerick, a benefits consultant and former benefits executive at Walmart, Burger King, British Petroleum, and American Fidelity Assurance, told IMT bluntly that "Corporate wellness programs do not reduce the cost of health plans." Why? "They simply do not work." In fact, Emerick said, such programs were tried and abandoned during the 1970s and 1980s. "They all went away because they just didn't work." Emerick thinks today's benefits managers have less financial and actuarial expertise than the previous generation of managers who rejected wellness programs. "Back then, it sounded like it had huge potential," he said. "If you used wellness to improve your health, you should be able to reduce things like heart attacks and strokes. We did massive experiments with programs much more extensive than just reimbursement and incentives. Sure, a lot of people got helped along the way, but it was never enough to offset the cost of it." Emerick referenced recent research RAND found that employee participation rates tend to be fairly low but can be increased through incentives. Medical and cost data based on medical claims revealed "a lower cost trend in program participants compared to non-participants." However, "the overall difference on overall health care cost is not statistically significant." In fact, health care costs among wellness participants were only $2.38 per month lower than for non-participants in the first year and $3.46 less in the fifth year. After five years, estimates point to savings around $378 in direct medical costs per participating employee per year, about 7 percent of the cost of coverage. RAND's results correlate with a study However, these results are at odds with the conclusions of other research. For example, a group from Harvard University and Harvard Medical School published a study Glenn Riseley, president of the Global Corporate Challenge, writes In 2011, the Foundation for Chronic Disease Prevention in the Workplace (FCDP) conducted an independent study of employees who participated in the wellness and behavior modification program sponsored by Riseley's organization. The FCDP study found that "53 percent of participants lost weight, with an average loss of 6.2 pounds" and that employees experienced an increase in energy level, sleep quality, and ability to deal with stress. Fifty-two percent of employers reported increased productivity and 75 percent increased morale.