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JAMA Forum Archive, 2012-2019: Health policy commentary from leaders in the field
JAMA Forum

Do Employee Wellness Programs Improve Health and Reduce Spending?

For some time, wellness programs have been growing in popularity across the United States. At this point, it appears that about half of employers with more than 50 employees offer them. But almost allreally large employers, those with at least 50 000 employees, do so.

Aaron Carroll, MD, MS

The Affordable Care Act expands the use of such programs, allowing employers to offer even more in penalties or savings if they meet certain criteria or if they engage in certain preventive activities. Many companies believe that these programs have the potential to improve health and, by doing so, reduce spending in such a way as to make them cost-effective.

Whether they actually accomplish these goals is not well understood. A review of randomized controlled trials found that wellness programs had no significant effect on blood pressure, blood sugar, or cholesterol. Another such review found that lifestyle programs that seek to improve weight and activity saved little, if any, money. But this has not slowed enthusiasm for wellness programs in the private sector: they account for about $6 billion a year in spending.

A recently published study adds some important information that might influence such programs in the future. The researchers looked at an initiative that PepsiCo began in 2003  that eventually became their Healthy Living program. The program involved 2 separate components, what we might consider a “lifestyle” offering and a disease management component.

For the lifestyle component, assessments were provided to allow employees and their families to determine if they had risks. Online or telephone coaching was offered in areas like weight, nutrition, or stress management; fitness; and smoking cessation. The disease management component was available only to employees with 1 of 10 chronic conditions. For 6 to 9 months, employees enrolled in this intervention participated in phone calls with nurses to improve medication adherence and self-care knowledge and abilities.

The overall result, which will please proponents of wellness programs, is that the program reduced health care spending by $30 per member per month, or $360 per year. For every dollar spent, $1.46 was returned in savings. This, of course, sounds great. Who wouldn’t want such a program? But a further analysis showed that things were not so simple. The disease management component accounted for almost all of the savings. Those who participated in that part of the program saw a reduction in health care costs of about $136 a month, or more than $1600 a year. This was driven largely by a 29% decrease in hospital admissions.

In fact, for each dollar spent on disease management, the company saw a return of $3.78. For each dollar spent on lifestyle management, it only saw a return of $0.48. In other words, lifestyle management cost more than they saw in return.

This is an important distinction for fans of wellness programs. Most are pitched more as lifestyle management than as disease management. They are offered to all employees and dependents and are an attempt to get beneficiaries to better manage things like weight, diabetes, or blood pressure. Some of them, though, can be a form of cost shifting. Those who do not comply with the program can be subject to penalties of $100 a month or more. In other words, unhealthier employees, or those who don’t meet certain criteria, pay more so that employers pay less.

Disease management is somewhat different. This is money spent only on those who already have chronic conditions. It’s an investment by a company into the health of its sickest employees. It appears to work, in the sense that it saves more money than it costs. But it doesn’t have the widespread appeal of “wellness” programs. Nor does it so quickly and easily reduce the health care spending of those who are healthy and don’t have chronic conditions.

But this study, along with those that come before it, adds to the body of literature that shows that lifestyle management wellness programs do not offer the reductions in health care spending that many attribute to them. They can sometimes result in increased costs to those who need health care the most, and they do not have the return on investment that many seek. Disease management, on the other hand, while not as appealing to the general population, nor as easy to implement, appears to work quite well.

About the author: Aaron E. Carroll, MD, MS, is a health services researcher and the Vice Chair for Health Policy and Outcomes Research in the Department of Pediatrics at Indiana University School of Medicine. He blogs about health policy at The Incidental Economist and tweets at @aaronecarroll.