January 7, 2013
While workplace wellness programs may be well-intentioned, they may not necessarily be saving corporations any money. At least, this is what researchers at RAND Corp. are saying after conducting a study to gauge the impact of workplace wellness and lifestyle programs offered to employees at Pepsi Co. The study, which is the first and most comprehensive of its kind, examined more than 67,000 employees who were eligible to participate in the company's "Healthy Living" wellness program. The program is designed to support employees with chronic diseases as well as promote a healthy lifestyle within the rest of their workforce.
Released Monday in the journal Health Affairs, the findings of the study illustrated that, after several years of continuous program participation, the savings per member worked out to around $30 in health care costs per month. However, the bulk of the savings was attributed to the disease management component of the wellness program alone. Breaking the numbers down further illustrates the huge disparity in the savings between the two aspects of Pepsi Co.'s wellness program. As the New York Times noted, for every dollar spent, the disease management program saved $3.78 on average, compared with 48 cents for the lifestyle offerings. According to the Times, these numbers take into account both health care and absenteeism.
But researchers aren't necessarily saying that workplace wellness programs don't benefit workers or employers. In fact, they seem to indicate that wellness programs may be the key to the prevention of chronic diseases and additional savings that may be hard to measure. At the same time, it's important to note that, at this point, helping employees live a healthy lifestyle may not be a good investment.
"Workplace wellness programs have the potential to reduce health risks and to delay or avoid the onset of chronic diseases as well as to reduce health care cost in employees with manifest chronic disease," researchers wrote. "But employers and policy makers should not take for granted that the lifestyle management component of such programs can reduce health care costs or even lead to net savings."
In a recent article in Forbes, the differences between the two components of Pepsi Co.'s wellness program were spelled out. Basically, the wellness component of the program included weight management, nutrition management, fitness, stress management, and smoking cessation programs. The disease management component of the program offered advice and chronic disease management assistance to those suffering from chronic conditions like diabetes and heart disease.
As Reuters recently pointed out, workplace wellness programs are a part of a $6 billion dollar industry, with much of the growth attributed to the promise of increased productivity, lower healthcare costs, and a decrease in absenteeism. However, some employees are hesitant to get involved when asked to participate, partly due to feelings that workplace wellness programs violate their privacy or promote the misguided use of medicine. And, with the Affordable Care Act now allowing employers to penalize employees who refuse to participate in workplace wellness programs, and reward those who do, many workers are less than enthused.
Now that the Pepsi Co. study shows that employers may not be saving much, if anything, when instituting workplace wellness initiatives, it will be interesting to see what happens.
"You're making employees do something that invades their privacy and that goes against medical advice, and now we're seeing (in the PepsiCo study) that it doesn't even save the employer money," said Al Lewis, founder and president of the Disease Management Purchasing Consortium International, to Reuters.
Compiled by Holly Johnson
"Healthy Lifestyle Adoption Push May Not Save Employers Money," Forbes, January 6, 2014, Bruce Japsen, http://www.forbes.com/sites/brucejapsen/2014/01/06/healthy-lifestyle-adoption-push-may-not-save-employers-money/
"PepsiCo's workplace wellness program fails the bottom line: study," Reuters, January 6, 2014, Sharon Begley, http://www.reuters.com/article/2014/01/06/us-wellness-workplace-idUSBREA0510R20140106
"Study Raises Questions for Employee Wellness Programs," The New York Times, January 6, 2014, Ann Carrns, http://www.nytimes.com/2014/01/07/your-money/study-raises-questions-for-employer-wellness-programs.html?_r=0