Does workplace wellness help the bottom line?

| March 4, 2014

Last week we discussed whether workplace wellness programs benefited employees. This week, we’re talking about how they impact a company’s financial health.

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“Disease management” components of wellness programs can reduce hospital admissions. (Photo credit: Wikipedia)

Workplace wellness programs seem to present a simple concept: reduce health care costs by encouraging employees to make healthier decisions. For some, that might mean talking with a nurse or taking classes to learn how to better manage a chronic condition. For others, it might involve participating in a smoking cessation program or engaging in screenings that can detect health problems early, before they can advance to more serious – and costly – conditions.

But the returns on wellness programs may make both employers and employees question the value of an ounce of prevention.

Reports by RAND Corporation, an independent health policy research firm, found that the “disease management” components of wellness programs helped reduce the impact of chronic conditions such as diabetes and heart disease – as measured by a decrease in hospital admissions.

The programs, however, came up short in prevention-focused “lifestyle management” results. A 2012 RAND study of about 600 companies – sponsored by the U.S. Department of Labor and U.S. Department of Health and Human Services – found the programs only delivered short-term smoking cessation success, failed to produce significant reductions in total cholesterol levels and helped weight-loss participants lose an average of just 1 pound a year for three years.

weight loss exercise class

Studies show wellness programs do not help participants with weight loss. (Photo credit: ninahale)

Another study, released this year, supported those findings. Analyzing dozens of workplace wellness programs, researchers from the University of California found that they did not lower blood pressure, blood sugar or cholesterol levels and rarely led to weight loss.

In addition, there are some indications that preventive aspects of wellness programs can do more harm than good.

In a much-publicized case last year, a wellness program for faculty at Pennsylvania State University (PSU) required even healthy young adults to receive frequent screenings which are not recommended by most in the medical community. Some argue these programs not only encourage unnecessary testing, but also the risk of false positives, which lead to more invasive testing.

In terms of costs for employers, that means wellness programs could simply shift spending from emergency and inpatient care to outpatient. The RAND study found the programs did not generate a significant reduction in overall medical costs. While the disease-management efforts reduced hospitalization costs, the preventive component of health screenings and assessments resulted in more outpatient spending, via doctor’s visits and prescription use.While lifestyle improvements might not generate an immediate financial benefit for employers, researchers say most employers are in the early stages of learning how to best calculate the success of wellness programs. Increased employee productivity, resulting from a healthier lifestyle, could prove to be an area of return for everyone.

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