Wellness Bleeding You Dry?
Desperate employers, seeing annual double-digit increases in healthcare costs, have increasingly been looking to one industry for succor: wellness.
The United States is particularly keen on this space as one of the biggest users of wellness programs, and more than 80% of employers in North America offer some sort of corporate wellness program, part of an industry that is anticipated to generate $87 billion in revenue by 2027, according to a recent report by Grand View Research.
Corporate wellness programs are expected to generate $87 billion in revenue by 2027.
Studies that measured wellness programs found no return-on-investment benefit or improved health among participants.
Because participation in wellness programs is typically voluntary and healthier people take part, outcome results can be skewed.
With this amount of money being thrown into one space, it would be easy to assume there is plenty of sound data showing employers receive a healthy return on their investments. Some research has borne this out.
A 2010 report in Health Affairs, often cited as a benchmark for the industry, found that, for every dollar that employers spent on wellness programs, they lowered their medical costs by $3.27 and the estimated cost of absenteeism was reduced by $2.73. In effect, a three-to-one payout.
But recent studies have debunked those findings. Two studies in which researchers sought better ways to measure wellness solutions found no ROI benefit or any improved health among participants.
These kinds of discrepancies are likely due to what some now think may be faulty comparisons and poor research previously performed on and by the industry. Not all wellness solutions are a crapshoot, but employers might be wise to temper expectations regarding the health and financial value of the programs they bring to the workplace.
New Research, Different Findings
Dr. Zirui Song was one author of the 2010 Health Affairs meta analysis. His new research shows things can change in a decade.
Song, an internal medicine physician and assistant professor of healthcare policy and medicine at Harvard Medical School, says he wanted to pursue more research in this field to add to the literature that was already there.
This time, instead of analyzing other people’s data, Song and colleagues created a randomized trial with more than 32,000 employees at BJ’s Wholesale Club, a warehouse retail company. They worked with 20 treatment work sites and 140 control sites across the country. Song says they wanted to offer what might be seen as a standard wellness program, so they presented one with eight modules—four-to-eight week educational programs in which participants took part in individual and team-based workplace activities—focusing on stress reduction, nutrition, and physical activity, among other topics. By the end of the study, about 35% of people at the treatment sites completed at least one health module.
In an article published in the Journal of the American Medical Association (JAMA), Song and his team of researchers compared employees at treatment sites with employees at non-treatment facilities. They found no significant differences in clinical health markers, healthcare spending or utilization, absenteeism, tenure or job performance between the locales where the program was offered and where it wasn’t. They did find an increase in the number of people at the treatment sites who said they engaged in regular exercise and were “actively managing” their weight at the end of the initiative.
There are various potential reasons why there was no change to participants’ health. The program could have been ineffective. Or there could have been initial health changes, like weight loss, that reverted to baseline by 18 months. Or it could have been that 18 months wasn’t long enough to measure potential gains—that it takes longer to change health outcomes.
“Health behaviors did respond and did in a way that is large or meaningful, according to my estimate,” Song says. “But in 18 months, those didn’t yet translate into changes in health or spending or on-the-job performance or absenteeism.”
In a 2020 study published in JAMA, a two-year workplace wellness program was established at the University of Illinois. Nearly 5,000 employees were designated into treatment groups and received biometric screening and a health risk assessment. The participants were then offered wellness activities based on their individual health risks that included smoking cessation and weight-loss programs, fitness classes and chronic disease-management assistance. The control group was not offered the program.
Unlike many wellness programs, there was high participation in this one. About 60% of people who were eligible took part, says David Molitor, a study co-author and an assistant professor of finance and economics at the Gies College of Business at the University of Illinois.
Health measures were taken after one and two years. Researchers found no significant improvements in clinical biometrics, medical usage or claims related to chronic diagnoses. Molitor says there was also no difference in productivity or survey-based measures like whether people were going to the gym or if they took part in a popular annual running event in the area.
“There are many different objectives employers might have for putting these programs in place, but if they are trying to reduce costs, it may not work—at least if they do an industry-standard program,” Molitor says.
One of the reasons Song and Molitor undertook their respective studies was that much of the other current research analyzing the industry is not what they would call “rigorous.” Molitor says many past studies did not include randomly assigned treatment and control groups like one would see in traditional clinical trials.
Wally Gomaa, CEO of ACAP Health, says he noticed something odd in the industry more than a decade ago. He saw large wellness groups pitching programs to major companies, claiming engagement and participation was excellent in said programs, meaning they could extrapolate that to lower health risks and reduced costs.
But Gomaa was doing biometric screenings with these same employers and seeing cholesterol and glucose levels, waist circumference and body mass indices “not just worsening but starting to really hockey stick in the wrong direction.”
“The industry is famous for a lot of math crimes,” he says. “They won’t go to jail for them, but they will cloud the mind of an employer when an industry has promised big ROI that is a fantasy, not based in truth.”
Gomaa particularly has a problem with wellness vendors that infer that making a healthy choice—like eating more fruits and vegetables—means that healthcare costs for the person who does that will drop. That is one reason Gomaa’s group gives a clinical ROI guarantee instead of some kind of savings target.
“Blood doesn’t lie,” Gomaa says. “We offer employers something clinical that isn’t made up. Did someone’s levels improve? Did someone avoid orthopedic surgery and do something else instead?”
Linda Riddell, a population health scientist at the Validation Institute, says she has seen a lot of this kind of math in the telehealth industry also. A number of companies offer dubious statistics, such as claiming that every telemedicine appointment can prevent a $2,000-plus emergency room visit. Or that putting someone on cholesterol medications because of a visit will save on future costly health events, such as a heart attack, which could cost an employer $40,000 in medical bills. But it’s hard to measure health events that don’t happen, and such claims are based on a false substitution.
She contends that most telemedicine visits aren’t necessarily replacing something else. A more accurate measurement would be to look at how much was spent overall on visits per capita before and after the program was available. The program can be considered effective if the total spent on those services goes down across the board.
Another issue with many wellness studies is authors’ comparing participants to non-participants and taking clinical measurements at the end of a particular point showing participants are healthier. But Molitor says most of the people who volunteer to participate in wellness programs are in better shape from the start.
Molitor’s study, for example, showed that people who chose to participate in the program were healthier and spending more time in the gym even before the study. This finding suggests the program that Molitor and his colleagues used catered to already healthy employees. Because participation is typically voluntary and healthier people are taking part, the results can be skewed.
“It suggests that we may need to think about how to innovate programs and to be cautious or skeptical about whether programs have been rigorously evaluated,” Molitor says. “When people claim wellness programs improve value or outcomes, it’s worth thinking about the basis on which they are making that claim and if they are accounting for already healthy employees taking part.”
Riddell goes so far as to say that any study that compares participants with people not taking part should be a red flag. “Just delete those,” she says.
Her organization corroborates wellness programs and other healthcare solutions. She says the Validation Institute’s tagline used to be, “Trust, but verify.” But such verification can be difficult because human resource managers often don’t have the time to sort through data. Vendors also are not epidemiologists or statisticians.
“They may in good faith be doing the math wrong … or not,” Riddell says.
Riddell, who performs many of the validations for the institute, says when a vendor comes to the organization with a program, her team first checks to see if the vendor has data that confirm the efficacy of its wellness program. If the vendor does not, Riddell looks to the market to see if there have been similar programs that were impactful.
Next, they look at the type of data, if any, that the vendor presents. Some may have participant surveys in which individuals rate how well they think the program has worked for them. Others use clinical data, like hospital stays or pharmaceutical claims. Surveys are generally not as credible as clinical measures, she says.
The third step for validating a program is to look at the model that is used to calculate impact. This is the most complex part of the process, but there are some easy ways to tell if the math may be flawed—such as comparing participants to non-participants.
Sue Morrell, general manager at the Validation Institute, says companies that feel they lack the time or knowledge to sort through the plethora of wellness initiatives can look to groups like hers to find credible vendors. Each program that achieves validation has been vetted and proven to do what they claim to do.
“We are surfacing best-of-breed organizations providing cost savings and successful outcomes for employees,” Morrell says. “And we provide that information in a common way with transparency.”
The most common question Susan Van Hoosen gets when she works with clients is whether programs will offer a good return on investment. That is a challenge because some small companies don’t even have access to enough data to measure their ROI. And some employers may choose to initiate a wellness program for reasons beyond the bottom line.
“Wellness programs may give them happier, healthier employees who are more informed, resilient healthcare consumers,” says Van Hoosen, a population health strategist at LHD Benefit Advisors.
Creating a softball team or starting an exercise program can boost morale and enhance employee relationships. Or an employer may have to offer something like gym memberships because all its competitors provide them.
Molitor says wellness programs can also engender good feelings among a workforce. In his survey, participants who were offered a wellness program were more likely to say they thought their employer cared about workers’ health and safety.
“It didn’t change their health, but it did influence people’s perceptions about whether the employer cares about their health,” Molitor says.
Also related to perception was the way people felt about their own health status after the wellness plan was offered. Biometric screenings were given after the first and second program years. Though their health measures weren’t improved, the employees in the treatment group were surveyed before taking the tests, and they generally thought they were less likely to have high blood pressure, have high glucose or be obese.
“One possibility for those responses may be something that is hard to measure in clinical data,” Molitor says. “If they have started to orient their thinking to be healthier, that may have long-term benefits for their physical health or mental health.”
He also found that employees in the treatment group were significantly more likely to have had a health screening after the program than before the program started. This could be good for an employer wanting to collect health data over time.
How to Fail
There are a number of practices commonly used in wellness programs that don’t appear to be effective. One such practice, used in many programs, is incentives, which can work in the short term, Van Hoosen says, but don’t do much to change someone’s habits over time.
“You see the winners of ‘The Biggest Loser’ from past seasons,” she says, referring to the television show in which contestants compete to lose weight, “and they have gained it all back. If someone wants to do something like that, we recommend, in addition to a ‘biggest loser’ challenge, adding a ‘maintain, no gain’ challenge.”
Just throwing money at the issue is not a solution. Julie Evarts, clinical director of health, safety and wellness at EHD Insurance, says gym membership reimbursement will not do anything to improve people’s health. Anyone who will use that is likely already going to the gym.
“If someone is unmotivated to even get annual physicals, they won’t start going to the gym just because you’ve given them membership money,” she says. “Like a tobacco surcharge on insurance doesn’t really stop people from smoking. They’ll just pay the extra money.”
Van Hoosen says lack of support for a program from a company’s upper management can also sabotage efforts. An organization may launch a wellness initiative and make a big push to get people involved, then be unsupportive if someone needs time away to participate in an event or get some health coaching.
“We do a lot of training with managers,” she says. “We make sure they know what is happening, why it is important, why they should support employees. They should also know how to refer people to an EAP [employee assistance program] and do things like download a telehealth app so they can help employees with those things.”
Riddell goes as far as saying if an organization really wants to improve employees’ health, they need to change the work environment overall.
“If an employer really wanted to impact heart disease, they would train their managers to be respectful and take input,” she says. “It’s usually not about what a person does when outside of work. The work environment has a huge impact on health.”
And if an organization wants to use incentives, it should be offering those to human resources or benefits staff. HR offices generally run lean and don’t always have the knowledge or time to make the best decisions about wellness programs. Creating an environment where staff can choose better programs—and are rewarded for creating cost savings from those programs—may be a good way for a business to spend its money.
Incentives can also be a sticky wicket when it comes to discrimination, an issue brought to light of late with some wellness programs.
“If you offer rewards for people for being healthy, it means you penalize people who aren’t healthy or decline the program,” Molitor says. “But to the extent that part of health is something beyond a person’s control—like a genetic predisposition to a disease—then what a business is doing is rewarding people for their preferences or genetics.”
To avoid discrimination in a wellness program, companies can make accommodations for people with disabilities who might not be able to take part in a program. When it comes to incentives, Evarts says, employers need to meet the reasonable alternative standard.
For instance, if non-smokers pay $100 less in premiums each month, smokers cannot necessarily be left out of that incentive. They could also have the option to sign up and complete an annual smoking cessation class to qualify for the discount.
Finally, avoid playing the long game. In today’s workforce, most employees stay at a job for only an average of four years, unless it’s a public sector job, which tends to have longer-term employment. In a company with regular turnover, it might not make financial sense to focus on behavioral changes, such as losing weight to prevent a heart attack 20 years down the road.
Instead of broad-swath programs, choose what is specific to each workplace. In a group with an older population, almost every one of them will have muscle, bone and joint issues. Offering robust physical therapy benefits can help avoid costly surgeries.
“Make an investment in that short-term relationship,” Morrell says. “That is the low-hanging fruit, and finding a program that attacks those costs will have a big impact.”
What Does Work?
Aside from thinking about the short game when choosing a wellness program, there are some other factors that play a role in whether a solution might be effective. One is to differentiate what type of program is being offered.
According to Riddell, primary prevention solutions, which might offer ways to promote exercise for the whole workplace to reduce the instance of heart disease, “don’t really work.”
Secondary prevention, however, may be more effective. This might include something that works with people who have hypertension to keep their numbers in a healthy range.
Riddell says she would be skeptical of a program that claims to reduce overall emergency room visits among a workforce, for instance. Broad results like that are difficult to promise. But it might be more feasible from a program that promised to reduce ER visits by improving health literacy among Spanish-speaking workers.
Gomaa says effective wellness programs also adhere to the principle that “humans are very predictable.” He recommends making it more appealing by using the principle of scarcity.
“An employer should say, ‘We are introducing this program. If you’re interested, you have to sign up by this date because there is only a limited time to enroll. If you don’t hit that mark, you will miss the chance,’” he says.
That kind of limited availability is more appealing to people and could help increase early engagement.
Long-term results will be needed for retention, though. And those can be garnered by education, not incentives, Gomaa says.
“I don’t believe willpower is effective,” he says. “It’s more about learning skills that form habits.”
Van Hoosen also believes in the need to create a workforce that is smarter about their health for any kind of wellness to stick. Instead of doing a biometric screening and giving people a readout of their numbers, work with groups that are at high risk. Instead of telling someone they have high blood pressure and sending them to a doctor to get medication, she recommends teaching them about the condition.
“You can sometimes lifestyle your way in and out of high blood pressure,” she says. “For some people it’s reversible with diet and exercise.”
She suggests training everyone with hypertension how to properly take their own blood pressure—how to sit and use an arm cuff and where the cuff should be placed. Teach people what their reading means. Then give them education and resources to help manage the condition.
Even with education, wellness also has to be kept as simple as possible or people simply won’t take part.
One of Evarts’s clients is a foundry company employing a large number of low-wage workers. When she began working with them, their compliance rate on preventive care was only 6%. The organization put in place a wellness day where people could take off and see a doctor for any healthcare they might need. It didn’t work.
Evarts talked with the staff and found out many of them work 7:30 a.m. to 3:30 p.m., then hurry off to a second job in the evenings and weekends. They were not going to lose a day of pay to go see a doctor.
The company changed its tack and, instead, offered a paid day off—as long as the employees saw a doctor and dentist that day. The compliance rate on well visits doubled to 12% in one year. The company also brought a healthcare provider directly to the site to do preventive-care physicals. If something was found in the appointment, the providers assigned the employee directly to a healthcare provider that practiced in or near their neighborhood.
Affordability was another challenge for this client. People will avoid a doctor if they suspect the doctor might find something wrong that they can’t afford to fix. To combat this, Evarts recommends a program that allows employees to forgo a co-pay on maintenance medications or to earn money toward buying down their deductible if they see a doctor and take part in a wellness program.
There is no one-size-fits-all program for any workplace. But Gomaa says he thinks the one greatest opportunity to lower costs and improve employee health is by focusing on the metabolic category.
“About 4% of participants drive 60% of healthcare costs,” he says. “It’s hard to look at that and say, by far, it’s not the best opportunity.”
On the other end of the spectrum, if an employer is looking to cut costs, the cancer space might not be where to invest wellness dollars (though Gomaa encourages employers to pay for preventive screenings). There just is not enough proven to be effective in that space, he says, and it’s much more complex to manage. “It’s where we view the world today in the space of opportunity to move metrics,” Gomaa says.
To determine what is best for each workplace, Gomaa recommends starting with data analysis, identifying the top diseases at each organization, and then developing a disease-specific battle plan to impact those particular conditions.
“Don’t take a leap of faith,” he says. “Pilot everything, and if it doesn’t work, move away.”
The data are shallow and inconsistent, and experts don’t always agree that employee wellness is ultimately effective. So why should employers throw good money at unproven programs?
Many, including Song, whose research found zero ROI or positive movement in biometrics, still believe these programs have potential. He sees enough people in his practice with chronic conditions and major health problems to believe it’s worth the effort to figure out how to evaluate these programs to see which might move the needle on clinical measures.
“It’s a relatively young field, still, and work is a place where a lot of people spend a lot of their waking hours,” Song says. “That presents an opportunity to improve people’s health.”
Song says the general takeaway from the current available research is that it is, at the very least, challenging to design a wellness program that is going to save employers money. This is especially true if a business is looking for a quick turnaround on its investment.
“There are more unknowns than knowns, unfortunately,” Song says, “and a study like ours begs an employer to think more deeply about programs, ask more questions before investing, and know more about evaluating them.”
Finding a program that works well could also make good business sense.
“If most people had a department that year over year continued to show 15% to 20% increases, you would go to the department manager and say, ‘What is going on? We are bleeding. What is it we are going to do about this?’” Evarts says.
Instead of shopping around for new health plans every year as costs continually rise, she recommends employers roll up their sleeves, figure out where the costs are coming from, and do something about it.
“Creating new plan designs isn’t fixing the problem,” Evarts says. “That’s like opening the fridge, realizing there is a stink in there, spraying Febreze and closing the door.”