Company wellness plans don't make you healthier

A study mandated in Obamacare says employees don't benefit, either through fewer illnesses or lower costs.

By Jason Notte May 29, 2013 12:16PM
Image: Business People Meditating (© Radius Images/Getty Images)Well, it took Rand Corp. one report to figure out what employees across the country who still live in fear of their scales already know: Company wellness programs don't work.

Those programs are essential to the already scrutinized Affordable Care Act, the health care insurance reform law known as Obamacare. But Reuters has discovered that not only aren't wellness programs living up to the claims of companies that promote them, but their failure is also likely to cost employees sought-after rewards and bonuses once the health care mandate kicks in.

Rand delivered this congressionally mandated analysis to the U.S. Department of Labor and the Department of Health and Human Services last fall, but it still hasn't been released. Sources told Reuters they expected it to be made public last winter. Reuters read the report when it was briefly posted online by Rand on Friday before being taken down.

Maybe it's because the report found, for example, that people who participate in such programs lose an average of only one pound a year for three years. Or that such a program "was not associated with significant reductions in total cholesterol level." Or that anti-smoking programs work only "in the short term."

That isn't great for the programs' claims that they reduce medical spending as employees become healthier and avoid heart disease, cancer and stroke. In fact, workers who participated in a wellness program saw a mere $2.38 drop in health care costs per month in the first year of the program and $3.46 less in the fifth year. That's statistically insignificant enough to be comparable to not doing anything at all.

Oh, and those programs don't catch disease or improve health enough to prevent emergencies. "We do not detect statistically significant decreases in cost and use of emergency department and hospital care" as a result of the programs, Rand found.

The report's results will take on a whole lot more significance next year, when the ACA allows employers to reward employees who participate in workplace wellness programs with 30% of the cost of insurance premiums, or about $1,620 annually per worker. If an employer is subsidizing employees who use its program but the company doesn't see lower health care costs as a result, it can absorb the costs and raise premiums across the board or only for workers who don't participate.

Despite this, companies are still on board with wellness programs. Employers told Rand they were "overwhelmingly" confident that workplace wellness reduces medical costs, though only 44% have evaluated their efforts and just 2% have precise savings estimates.

So who's doing those calculations? The companies selling businesses on those wellness programs.

More on moneyNOW

May 29, 2013 2:10PM
Unless you have penalties for not complying with teh requirements of the wellness programs, the lazy will keep being lazy,  the drinkers will keep drinking, the fat people will keep overeating, and the smokers will keep smoking.

Make them pay money for their risky behavior and you'll start to see results.

May 29, 2013 3:17PM

Government spending huge amounts of money on something that is useless. What's new here?

May 29, 2013 1:39PM

If you have ever participated in a wellness plan you know why they don't work.  My experience was it was someone sitting n a call center making just over minimum wage using a script to bother me once a month about how I could be healthier.  The worker was different every time... and they just wanted to me to set a goal so they could finish the call.  A better plan would involve someone you develop a relationship over several face to face meetings... and you might even want to include my spouse in the meeting.

May 29, 2013 2:47PM
Wouldn't a wellness program potentially make people live longer into later years and extend their life longer into the most costly years of healthcare and long term care?  Maybe they should be handing out cigarettes.
May 29, 2013 2:40PM
This Obama-Care B.S. will never work.  Maybe they will pay us subsidies for getting skinny and not smoking and drinking.  Until then hand me some open pit pork barbeque and my cold budweiser and smoke them if you have them.
May 29, 2013 1:29PM
Wow - what a defeatist lens the author has on this topic.  My company has a wellness program.  I know quite a few people who have made meaningful improvements to their lifestyles to be more healthy through the wellness program.  They walk more, they go to the gym, they participate in nutrition programs and actually make improvements to their diet.  Our campus banned tobacco a couple of years ago, and almost all the smokers have quit successfully since then.  I also know many people who ignore the wellness program.  I wonder if the results would be more accurate if you considered only the people who actually participate in the wellness program.

"They only lost 1 pound per year on average".  The rest of the country probably gained a pound per year on average.  If we all lost a pound a year for the next 10 years, I bet you would see meaningful reductions in the incidence of diabetes and heart disease.

Despite all the bad press they get, corporate leaders are pretty financially savvy.  They wouldn't be investing in these programs unless they see the return in fewer sick days and better employee retention.
May 29, 2013 6:38PM
It really boils down to more political corrrectness.
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