Not All Workplace Wellness Programs Are Created Equal
BY Abigail Tracy
A new study finds that while programs aimed at managing chronic illnesses can save companies money, those targeting stress or weight loss aren't as cost-effective.
It might be time to take a second look at your workplace wellness program.
As companies continue to seek new ways to cut back on healthcare costs, wellness programs have become quite pervasive. According to a new study for the Labor Department conducted by Sanat Monica, California-based nonprofit research firm the RAND Corporation, nearly half of U.S. employers with a minimum of 50 workers offered workplace wellness programs in 2012, while 90 percent of companies with greater than 50,000 workers offered the programs over the same period.
Although popular, these programs are not all effective or worth the costs, the study found. The researchers evaluated PepsiCo’s employee wellness program (the company paid for the study) over a seven-year period. They found that such programs can substantially reduce company expenditures on chronic illnesses, but are much less effective in cutting costs related to lifestyle management issues like weight loss and stress reduction.
The study, published in the journal Health Affairs, found that participation in Pepsi’s workplace wellness program saved a monthly average of $30 per member. The researchers estimated that for every dollar spent, the combination of the program's lifestyle and disease-management components saved the company $1.46.
When they looked at each component separately, however, they found that disease-management had substantially greater returns, The New York Times reported. The study estimated that each dollar the company spent on the disease management program saved $3.78, compared to savings of only 48 cents for the lifestyle segment.
The disease management program resulted in fewer hospital visits for workers, which was a significant factor in cost reduction, the study found.
These figures do not mean that employers should do away with programs aimed at stress reduction and weight loss all together. Dr. Soeren Mattke, senior author of the study, said in a press release that in combination with other initiatives, lifestyle programs could lead to overall savings. The study found that workers who participated in both components of Pepsi’s wellness program saved the company $160 per month and had a 66 percent drop in hospital visits over the course of the program. The study also reported a slight drop in absenteeism as a result of the lifestyle program.