By Gautam Gowrisankaran, Karen Norberg, Steven Kymes, Michael E. Chernew, Dustin Stwalley, Leah Kemper and William Peck
Health Affairs, March 2013
This study examined the effectiveness of a program put in place by BJC HealthCare, a hospital system based in St. Louis, Missouri, that tied employees’ eligibility to participate in the system’s most generous health plan with participation in a wellness program. We found reductions in inpatient costs but similar increases in non-inpatient costs. Therefore, we conclude that although the program did cut some hospitalizations, it did not save money for the employer in the short term. This finding underscores that wellness program incentives under the Affordable Care Act are unlikely to greatly reduce health care spending over the short run.
Wellness Incentives In The Workplace: Cost Savings Through Cost Shifting To Unhealthy Workers
By Jill R. Horwitz, Brenna D. Kelly and John E. DiNardo
Health Affairs, March 2013
The Affordable Care Act encourages workplace wellness programs, chiefly by promoting programs that reward employees for changing health-related behavior or improving measurable health outcomes. Although there may be other valid reasons, beyond lowering costs, to institute workplace wellness programs, we found little evidence that such programs can easily save costs through health improvement without being discriminatory. Our evidence suggests that savings to employers may come from cost shifting, with the most vulnerable employees — those from lower socioeconomic strata with the most health risks — probably bearing greater costs that in effect subsidize their healthier colleagues.
Despite the proliferation of wellness programs, drawing reliable conclusions about their financial returns on investment is difficult. Safeway credits its program with holding per capita health care costs flat from 2005 to 2009. However, employers’ reports are largely anecdotal. Some of them may attribute savings to wellness programs that could have resulted from unrelated causes, such as concurrent benefit restructuring or selection via restrictions on participation in the programs to certain job categories. A review of employer wellness studies concludes that they commonly suffer from insufficient controls, selection, and inadequate data.
By Don McCanne, M.D.
Workplace wellness programs were included in the Affordable Care Act partly as a means of promoting better health, but also as a means of reducing future health care spending though prevention of disease. The problem is that there is little empirical evidence that there is a potential for large cost savings from these programs. The two articles cited tend to confirm that wellness programs should not be relied upon to control future spending.
In no way does this mean that workplace wellness programs should be abandoned. Promoting health is a beneficial endeavor and should be encouraged. Rather, there are two other take-home lessons from these articles.
If financial incentives are included in wellness programs, they should be very carefully designed. The article by Jill Horwitz and her colleagues shows that savings to employers may result in the shifting of costs to employees who are more vulnerable due to their lower socioeconomic status which is associated with greater health risks. Using wellness funds for the already healthy while penalizing the more vulnerable is not wise policy.
The other lesson is that we should not pretend that wellness programs, along with the other tweaks in the Affordable Care Act, are going to bring us enough cost savings such that we can abandon efforts to enact the fundamental reforms that we need to ensure that absolutely everyone receives essential health care services under a program that we can afford.
Enacting a single payer national health program – an improved Medicare for all – is perhaps the most important step that we can take to promote wellness for all of us. Of course, there are many other public health measures that we should support, including addressing our serious socioeconomic inequities and injustices. But enacting single payer would be a great first step.