The Impact of Wellness Programs on Health Care Costs

Workplace Wellness Programs Benefits

It’s no secret: health care costs are on the rise.

According to the Commonwealth Fund, we can fault most of the costs associated with providing medical care for the rise in health insurance costs. To combat this growth, the Federal government, via the Affordable Care Act (ACA), has dedicated resources to increase the preventive and routine care to keep patients out of the hospital.  But will these incentives actually work?  Will wellness programs positively impact overall healthcare costs?  Or will the costs of healthcare be shifted onto the employers and ultimately their employees?

At first glance, the implementation of a wellness plan seems like a great idea for the overall well being of a company and its staff. 

An investment in employee health may lower health care costs and insurance claims. After all, it costs more to insure employees with greater risk factors like obesity, high blood pressure and diabetes, than for those employees with fewer risk factors. A workplace health program can keep healthy employees in the “low-risk” category by promoting health maintenance, and motivate more unhealthy employees to improve their healthy and therefore lower overall health insurance costs for the company. Now, as of January 1, 2014, employers may take advantage of financial incentives to build and expand existing wellness program policies.   Further, employers may reward those workers to elect to participate in wellness programs through federal subsidies equal to 30 percent of insurance premium costs.

So if it is generally believed that the implementation and expansion employer wellness programs will improve the overall health of working Americans and control health Health care costs in the workplacecare spending by preventing the increase in chronic conditions, why are health analysts saying that these types of programs will not actually reduce healthcare costs?

Recently, a report published by the RAND group reported that the success of employer based wellness programs on the nation’s general health is not guaranteed.  Based on the group’s findings, employer based wellness programs and initiatives may not have as great a positive effect on our health as was initially expected by analysts several years ago. Using data collected from over 600 businesses that employ at least 50 people, the RAND Corp researchers analyzed documents from a health and wellness trade association called Care Continuum Alliance. They discovered that these programs, alone, do not necessarily have a positive impact employee health. The study reported that, on average, medical savings per employee for these companies amounted to only $2.38 a month, yet employers were actually spending at least $521 per employee per year on program incentives (roughly $43 a month per employee.)

If the projected impact of wellness programs is murky, at best, what is the solution to improving the nation’s health and reducing the cost of healthcare? 

The answer shouldn’t be a surprise: It all comes down to an individual’s motivation and not “one-size-fits-all” solutions.  While there is a growing trend to “influence” workers to participate in workplace wellness programs [CVS] by offering financial incentives to employees who enroll in them. “The strongest predictor of whether someone will lose weight or stop smoking is how motivated they are,” said Al Lewis, founder and president of the Disease Management Purchasing Consortium International, which helps self-insured employers and state programs reduce healthcare costs. “Since [workplace wellness programs] are usually voluntary, the most motivated employees sign up. That makes it impossible to credit the programs with success in smoking cessation or weight loss rather than the employees’ motivation.”

Wellness programs, whether offered by employers or at a recreation center, can achieve results for individuals.  But it is shortsighted to think that they will help all people all of the time.  Unfortunately, as the RAND corp., study suggests, providing federal subsidy incentives to employers to motivate their employees to achieve better health isn’t the only solution to decreasing health care costs.  If employees are not vested in improving their health then even the best-planned workplace wellness programs will not be effective and health insurance and medical costs will continue to climb.  

Renée Keats is a Certified Health Navigator with a Master’s Degree in Public Health from the University of Illinois at Chicago. With over 20+ years of healthcare related experience, Ms. Keats has worked in hospital administration, government, managed care, Medical IT development as well as in other health related settings.  Prior to founding Windy City Momma, she worked for WellPoint as a Project Manager and later a Client Services Manager. When not working with the public to help navigate clients through the complicated world of healthcare, Ms. Keats enjoys sailing, gardening and of course, blogging!  Connect with Renee on Twitter, Linkedin, and Google+.

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