Released on Monday in the journal Health Affairs and
based on data for thousands of PepsiCo employees over seven years,
the findings "cast doubt on the widely held belief" that workplace
wellness programs save employers significantly more than they cost,
conclude Soeren Mattke of the RAND Corporation and his co-authors.
"Blanket claims of 'wellness saves money' are not warranted."
Workplace wellness programs, a $6 billion-a-year industry, are a
favorite of the business community because they promise to improve
productivity, cut absenteeism and reduce medical costs by averting
expensive illnesses. They aim, for instance, to help employees quit
smoking, maintain a healthy weight and have regular screenings for
elevated cholesterol, high blood pressure, cancer and other
conditions, all of which are supposed to reduce healthcare spending.
Half of U.S. employers with at least 50 workers offered a wellness
program in 2012, as did more than 90 percent of those with
50,000-plus workers, according to a 2013 RAND report. PepsiCo's was
introduced in 2003.
The programs are also a pillar of the Affordable Care Act (ACA),
President Barack Obama's healthcare reform law. The ACA allows
employers to reward workers who participate in wellness programs,
and penalize those who refuse, with discounts or increases of as
much as 30 percent of their insurance costs. That can be thousands
of dollars per year.
Some workers have objected to the programs because of the penalties.
Others say workplace wellness efforts invade their privacy and
promote poor medicine.
Last year, for instance, faculty members at Pennsylvania State
University rebelled against a workplace wellness program whose
"health risk assessment" asked, among other questions, whether male
employees examined their testicles every month and whether women
employees intended to become pregnant. They also protested its
requirement that even healthy young adults receive frequent
cholesterol and other screenings, which physicians recommend
against, and the steep penalties for opting out: $1,200 a year.
"You're making employees do something that invades their privacy and
that goes against medical advice, and now we're seeing (in the
PepsiCo study) that it doesn't even save the employer money," said
Al Lewis, founder and president of the Disease Management Purchasing
Consortium International, which helps self-insured employers and
state programs reduce healthcare costs.
PepsiCo did not respond to requests for comment on the study. Megan
Broderick, senior manager of the company's health and welfare
benefits and a co-author of the Health Affairs paper, said she could
not speak to a reporter without permission.
The vendor that sold PepsiCo the program, the SHPS division of ADP,
also declined to comment, citing "client confidentiality," said ADP
spokesman Dick Wolfe.
Maria Ghazal, a vice president of the Business Roundtable, an
association of chief executives of large U.S. corporations, said its
members are "as enthusiastic as they have ever been about these
(workplace wellness) programs," adopting them not only to control
healthcare costs but also to boost employee morale and improve
"Wellness is an area where you can distinguish yourself," she said.
"Employers feel they help attract and retain" valued workers.
[to top of second column]
For their study, RAND's Mattke and his colleagues — including two
PepsiCo executives — examined PepsiCo's "Healthy Living" program,
which has two components.
One, called disease management, helps people with any of 10
chronic illnesses, among them asthma, diabetes and hypertension.
They receive regular phone conversations with a nurse about managing
Disease management produced healthcare savings of $136 per member
per month, largely because of a 29 percent reduction in hospital
admissions, the researchers found. When hypertension is well
controlled, for instance, people are less likely to land in the
hospital with a stroke. When asthmatics take their medication, they
don't wind up in the ER unable to breathe.
PepsiCo's disease management program "provides a substantial return
for the investment made," Mattke said.
The "lifestyle management component" is what most people think of as
a workplace wellness program. It includes a health risk assessment
in which workers answer questions about such behavior as eating and
exercise habits; smoking cessation programs; and educational
materials and telephone sessions with a "wellness coach" to help
them lose weight, eat healthy, get fit, manage stress or stop
PepsiCo employees who participated in these lifestyle programs
reported a small reduction in absenteeism, but there was no
significant effect on healthcare costs. (The study uses costs as a
proxy for health, assuming that if people get sick, they seek care.
But it did not explicitly assess the programs' effect on
"Participation in lifestyle management interventions," conclude the
PepsiCo researchers, "... has no statistically significant effect on
healthcare costs," and employers considering adopting such a program
"should proceed with caution."
The PepsiCo study is not the first to find that workplace
wellness programs fall short of their promise. Last year, Mattke was
the lead author of a RAND report that found that healthcare costs of
workers who participated in such a program averaged $2.38 less per
month than non-participants in the first year of the program and
$3.46 less in the fifth year. Neither difference was statistically
Researchers who are skeptical of wellness programs' benefits are
concerned that the ACA — "Obamacare" — allows employers to offer
substantial financial rewards and penalties tied to something
"The ACA took a bad idea, workplace wellness programs, and
turbocharged it by allowing employers to penalize workers," said
Lewis, co-author of a new e-book titled "Surviving Workplace
(Editing by Douglas Royalty)
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