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Corporate Wellness is Big Business. Does it Work?

By: | Tags: | Comments: 0 | October 28th, 2016

By some estimates, spending on corporate wellness has grown to some $8 billion annually, spiked in part by incentives given companies by the Affordable Care Act to implement these programs. Wellness programs are typically administered by independent companies, not by insurers, and a growing question has been, “do they work?”

The goal of wellness programs is to improve employee health and reduce the cost of healthcare for employees, companies, and insurers, resulting in lower premiums. Many offer screening for conditions like high blood pressure and heart disease; some also offer wearable devices that allow employees to monitor just how much they are exercising (or not), eating, and sleeping.

According to a 2015 survey of 1,997 firms by the Kaiser Family Foundation, 49 percent of companies with fewer than 200 employees and 81 percent of larger ones offer company wellness programs.

Some wellness companies claim ROI benefits to employers of $1 to $3 for every dollar invested in their programs. This is data supplied by the companies selling corporate wellness programs, so it may not be entirely unbiased. Even if the program saves the company’s money, it may or may not trickle down to the employees engaged in the programs. Others point to the fact that the programs are too new to assess, because it can take years to see if individuals’ health improves, or if risk factors are reduced, or if serious conditions have been prevented.

Boston lawyer and economist Al Lewis is an outspoken critic of wellness programs, the way they are promoted, and the data that wellness companies use to promote their businesses. He told the Chicago Tribune that the claims of $1-$3 ROI are “mathematically impossible results” and are suspect because they are based on studies that sponsored by the very companies promoting them.

Lewis is also concerned about the lack of oversight in the industry. “There’s no regulation in this industry. Vendors can sell all the health screenings they can get employers to buy, including charging for tests deemed ineffective.”

Health and medicine website Stat reports that, “Vendors’ ‘research,’ however, has made so many elementary mistakes as to inspire voluminous criticism. For instance, one vendor reported weight changes only for those participating in the wellness program, not for non-participants. Without a comparison group, before-and-after measures for participants can’t show that any changes were the result of the program rather than of random variation or something outside work.”

There is also a lack of standardization as to what constitutes a wellness program, which also makes it difficult to measure results. One company may offer flu shots, while another may offer comprehensive examinations, monitoring and intervention services.

Some wellness programs offer financial incentives for workers to take part, others subject non-participants to penalties. Many question the difference–if non-participants are not receiving compensation that other employees are receiving, it essentially equates to being penalized for not participating.

Another challenge is awareness. A Gallup study found that while 85 percent of large employers offer wellness programs, only 60 percent of employees are aware of the program and only 40 percent of those that are aware of the programs participate.

Claiming that workplace wellness programs cannot improve employee health or reduce costs may be equally baseless at this point.  Because there is no single program, or standardized data collection and analysis, claiming defeat may be as unfounded as claiming victory appears to be.

If your company offers a corporate wellness program, let us know if you feel it is beneficial, a waste of time and money, or neither.

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