Employers Love Wellness Plans, But the Question is – Do They Even Work?

From istockphoto.com
From istockphoto.com

If you get health insurance at work, chances are you have some sort of wellness plan, too. But so far there’s no real evidence as to whether these plans work.

One thing we do know is that wellness is particularly popular with employers right now, as they seek ways to slow the rise of health spending. These initiatives can range from urging workers to use the stairs all the way to requiring comprehensive health screenings.

The 2014 survey of employers by the Kaiser Family Foundation found that 98 percent of large employers and 73 percent of smaller employers offer at least one wellness program. (Kaiser Health News is an editorially independent program of KFF.)

Part of many employer’s strategy

What makes wellness plans so popular?

“It really is part of their strategy to help employees be healthy, productive, and engaged,” says Maria Ghazal, vice president and counsel at the Business Roundtable, whose members are CEOs of large firms. “And it’s really part of their strategy to be successful companies.”

And there’s another reason wellness has gotten so pervasive, said health consultant Al Lewis. It’s a big industry.

“It’s somewhere between $6 [billion] and $10 billion, which creates an awful lot of people saying ‘do more of this stuff,’” he says.

Lewis has become something of a crusader against the spread of corporate wellness programs around the nation. (He’s co-authored an e-book detailing its failings.) He says among the many problems is that a lot of wellness plans are not so innocent.

“We call them pry, poke, prod and punish programs,” he says. That refers to the ones that ask intrusive questions like how much alcohol a person consumes and whether a woman is planning on becoming pregnant. They might also require medical procedures like comprehensive blood tests. The plans urge employees to participate and then punish them if they don’t.

Wellness programs MUST be voluntary

Under federal rules, wellness programs must in theory be voluntary. But more than a third of large companies are now using financial incentives, which include both rewards for those who participate and penalties for those who don’t, according to the Kaiser Family Foundation survey.

For example, at Penn State University last year, officials were forced to backtrack on a plan that would have required professors and other non-union workers – and their spouses — to undergo comprehensive health screenings every year, including measurements of cholesterol, blood sugar, and body mass.

Those who declined would be charged an extra $100 dollars a month for insurance. Employees rebelled, and Penn State didn’t implement the fees.

Ironically, says Lewis, for all the money some wellness plans spend to screen thousands of people, most companies don’t actually have that much health spending that could be saved by wellness initiatives.

“In a company with 10,000 workers,” he says, “they might have had 10 heart attacks, of which one may have been theoretically preventable with a wellness program. “

That’s a big reason why most independent studies have found little or no cost savings.

Shifting costs, not wellness, along to workers

When there have been savings, said Aaron Carroll and Austin Frakt in The New York Times, they tend not to have come from improving workers’ health. “Wellness programs can achieve cost-savings – for employers – by shifting higher costs of care to workers,” they wrote. This is because employers can charge workers more for their insurance if they refuse the smoking cessation or weight-loss plan.

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Some programs can even do harm, says Lewis. For example, false positive results from screening low-risk people end up causing workers anxiety and their health plans still more money. Lewis is quick to add that screening tests recommended by the U.S. Preventive Services Task Force are appropriate, but their guidelines “are routinely ignored by corporate wellness programs.”

But not everyone outside the wellness industry is quite so pessimistic. Harvard health economist Kate Baicker is the lead author of a 2010 study that found some potential savings.

“It could be that when all the full set of evidence comes in it will have huge returns on investment and the billions we’re spending on it are completely warranted,” Baicker says. But for now, “there are very few studies that have reliable data on both the costs and the benefits.”

Meanwhile, the federal government is divided on how to regulate this area.

More than one set of rules

The Affordable Care Act embraces the wellness concept. It lets employers link up to 30 percent of premiums to participation in wellness activities – and up to 50 percent if those activities involve quitting tobacco.

But the independent Equal Employment Opportunity Commission is suing several companies, including the Honeywell, with its more than 130,000 workers. It says their programs discriminate against those with disabilities.

The idea of having to follow more than one set of rules is frustrating employers.

“We want to be certain that following the Affordable Care Act is what we’re supposed to be doing, and there shouldn’t be additional requirements beyond the ACA,” said Maria Ghazal of the Business Roundtable.

The CEOs are so upset about the wellness lawsuits they’re reportedly threatening to pull their support for the health law entirely unless things are clarified – which could create one more enemy for the Affordable Care Act.

This article is from kaiserhealthnews.org and published with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.

Julie Rovner joined Kaiser Health News after 16 years as health policy correspondent for NPR, where she helped lead the network’s coverage of the passage and implementation of the Affordable Care Act. The Robin Toner Distinguished Fellow, Rovner is a noted expert on health policy issues and author of a critically-praised reference book Health Care Politics and Policy A-Z, now in its third edition.

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3 Comments on “Employers Love Wellness Plans, But the Question is – Do They Even Work?

  1. Sigh…programs that seem laudable in intent run into organizations, people who subvert the intention to raise employees’ wellness and health. Just as “we” couldn’t legislate being alcohol-free, we can’t legislate health. It is, after all, an individual responsibility. Hopefully, more and more individuals will begin to take responsibility for their health and wellness.

  2. My husband used to work for a company that offered to reimburse a certain portion of a gym membership if he went to the gym at least twice a week. To me, that seemed like a really great way for a company to motivate a behavior that it desires (physical activity) without seeming coercive. Employees weren’t “punished” for not doing it (e.g. having to pay more for health care), it was clearly voluntary, and it was off site so that non-participating employees didn’t feel left out or stigmatized. I think that more wellness programs could be successful if companies were thoughtful in their implementation and chose to focus on actual health rather than just the bottom line.

  3. As a physician, I am quite skeptical about employee wellness programs for the simple reason that employees see right through the purpose: namely to save the employer money while subjecting employees to intrusive situations that are on the cusp of legality. I also have yet to see any validated studies showing that they do increase employee productivity, job satisfaction or, most importantly, employee health. Like so many programs that corporate managers roll out, they look good in theory but in practice do little or nothing but let management feel like they have done something. As a person who has negotiated with brokers and providers for a large multi-specialty physician practice for these programs for our own employees, I have yet to see any evidence that they do anything to reduce insurance rates. Not buying them, because quite frankly the benefits of a wellness program should be divorced from any employee contribution rates to health insurance programs or the punishment aspect is perceived and the program participation is low.

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