$8 billion. That’s billion, with a b.
That’s how much was spent on workplace wellness programs by corporations in America. According to the Rand Corporation, 80% of all companies with 1,000 or more employees offer some type of wellness program. (1)
Some programs offer discounted or even free gym memberships, discounts on health, fitness and wellness related services and even discounts on healthy food options. Many programs incentivize workers to engage in healthy behaviors.
Some companies offered discounts on health insurance and even cash incentives. While this may sound good, disincentives or penalties were actually more effective at driving higher participation rates. In fact, in companies where the benefits were framed as a penalty, like higher health insurance rates for smokers or those not meeting activity targets, participation in wellness program activities and events was higher across all employers by a whopping 33% (1)
But do they work? Are they worth the investment? What, exactly is the return on investment (ROI?)
In 2010, a group of researchers from Harvard University did a meta-review of available data and said “yes.” In fact, they said that for every dollar spent on a corporate wellness program, the investing company could expect to recover approximately $3.27 in medical costs and $2.73 in prevented absenteeism. (2)
The latest research says the $8 billion workplace wellness industry may be one big old business boondoggle. Ironically, it is Harvard University making that claim that well, Harvard’s 2010 assessment of workplace wellness programs was erroneous.
To be completely fair, the researchers in 2010 did say that a lot of the prior literature on the subject of corporate wellness programs was limited due to the lack of a “robust control group.” As a result, the limited number of worksites investigated, small sample sizes and insufficient or inaccurate outcome measures may have led to the estimates of effectiveness being biased.
This time around, the researchers decided to clean up their act and tighten up the study parameters. They wanted to design a study which not only reviewed self-reported behavior changes, but measured actual outcomes as well. Self-reporting is all well and good, but facts and hard data are what matters in science.
So they chose 20 BJ’s Wholesale locations across the eastern United States out of the possible 160 sites. The remaining 140 sites served as a control group, with no wellness program implemented. A new wellness program was delivered to the 4,037 employees of the randomized test group sites, with 8 modules delivered over 18 months.
The control group consisted of a general control group of 28,937 employees and a primary control group drawn from 40 sites encompassing 4,106 employees.
The program ran from January 2015 through June 2016. Each was 4 to 8 weeks in length. Topics covered included nutrition, stress reduction, physical activity and disease prevention. Registered dietitians delivered the programming, which included both individual and team-based activities and challenges. The program was designed and delivered by Wellness Workdays, an established “wellness vendor.” Some modules included incentives to participate such as gift cards. (3)
The study measured 29 self-reported health and behavior outcomes via surveys. They also measured 10 clinical health outcomes via screenings. These were done comparatively for the primary control group and the intervention group. Health care spending and utilization outcomes (38) were measured along with 3 employment outcomes among the 20 intervention sites and all 140 control sites.
After 18 months, only 2 categories showed significant positive change. The intervention group reported engaging in regular exercise at an 8.3% higher rate than the control group. For the outcome of actively managing weight, the intervention group reported a 13.6% higher positive response.
That means the intervention group saw improvement in 2 out of 39 self-reported and clinical health outcomes after 18 months. There is no logical person on planet Earth who can justify $8 billion in spending for that kind of return. Corporations, especially large ones, however, seem to disagree with logic.
So why do corporations spend the kind of money they do on these wellness programs? Good question. It probably has less to do with actually wanting to change health outcomes across the nation than it does with making workers feel appreciated, cared for and valued.
And that is perfectly fine. Corporate wellness programs may be the kind of perk that draw talent from one company to another. If a high quality employee is choosing where to work between two companies and one has a wellness program, that may be the kind of benefit that would sway the decision, whether the employee chooses to take advantage of the program or not.
Of course, there is a practical side of this for the company. Reduce negative behaviors like smoking, drinking alcohol, remaining sedentary or eating poorly will help them keep overall health care costs down, at least in theory. Healthier people don’t need as much medical care, or so the logic goes.
There’s a fair amount of anecdotal evidence to suggest that workplace wellness programs, especially those aimed at weight management, exercise and reducing negative habits like smoking, tend to result in somewhat happier workplaces. Employees who report having participated in workplace weight loss challenges and similar activities have also reported higher job satisfaction.
But let’s not pull punches here. Is the amount of increased job satisfaction, better health habits developed and health care savings (either real or imagined) companies see from their wellness programs really worth $8 billion a year?
In the end, regardless of what the data say, that’s a decision that only the corporations involved (you know, the ones paying that bill) can make.
- Katherine Baicker, David Cutler, Zirui Song, Workplace Wellness Programs Can Generate Savings; Health Affairs, 2010