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January 30, 2018

Employee wellness programs might not improve health—at least, not immediately, study suggests

Daily Briefing

    Workplace wellness programs might not improve employees' health or lower their use of health care services—at least not within the program's first year of implementation, according to a working paper published this month by the National Bureau of Economic Research, WBUR reports.

    These 4 common mistakes can doom your direct-to-employer wellness program

    Background on workplace wellness programs

    Under the Affordable Care Act (ACA), companies are authorized to reward employees who participate in wellness programs with financial incentives that equate to up to 50% of employees' monthly health premiums, deductibles, and other health insurance costs.

    Companies over the years have invested in wellness programs, though several questions remain regarding whether these programs are effective. According to an IBIS World analysis, the wellness industry grew from $1 billion in 2011 to $6.8 billion in 2016. Last year, nearly a quarter of employers bolstered their wellness offerings, according to the Society of Human Resource Management's yearly benefits survey.

    Several studies, particularly observational ones, have found that wellness programs produce benefits. However, according to WBUR, those studies often measure differences between employees who enrolled in wellness plans and those who did not. As a result, WBUR reports that those studies are limited, because employees most likely to enroll in wellness programs typically are those who already live a healthier lifestyle and want to gain financial rewards for tasks they already are completing. Other studies have found that it can take nearly three years before a wellness program results in any benefits, Bloomberg reports.

    Working paper details

    The working paper is based on data derived from the Illinois Workplace Wellness Study. For the study, researchers:

    • Analyzed the effects that financial incentives and peers had on workplace wellness participation;
    • Estimated the causal effect of workplace wellness programs on employee health care behaviors, costs, productivity, and well-being; and
    • Examined who benefits from workplace wellness programs.

    The researchers conducted a randomized clinical trial with 3,300 employees from the University of Illinois at Urbana-Champaign who had access to a workplace wellness program called iThrive for a year, as well as a control group of 1,534 employees who did not receive access to the wellness program. The researchers split those who were enrolled in the wellness program into six groups that all received access to a biometric screening, a health assessment, and several services and classes, including chronic disease management. However, the groups received different financial incentives for completing each part of the program—with incentives ranging from $50 to $350.

    Working paper findings

    Overall, the working paper found that the wellness program did not have "significant causal effects" on 37 of 39 different outcomes.

    The researchers found that employees enrolled in the wellness program were more likely to be screened for health issues and they said they thought their employer placed a high priority on employees' health. However, the researchers found that being enrolled in the wellness program did not result in improved health care outcomes or lower health care costs. In particular, the researchers found that the medical spending habits of employees who were enrolled in wellness programs were nearly identical to those of the employees who were not enrolled in the program.

    According to the working paper, the employees most likely to use the wellness program were healthy individuals who did not spend a significant amount on health care, while employees with the highest health care costs were the least likely to participate in the program. Smokers were among the employees least likely to use the wellness program, according to the working paper.

    In addition, the researchers found that the program did not have an effect on employees' job satisfaction and productivity or lead employees to engage in certain healthy behaviors, such as going to the gym or participating in a local run.

    The researchers also found that the financial incentives offered through the program did not lead to a sharp rise in the share of employees who participated. The researchers found that fewer than 50% of employees completed the wellness program's assessment and screening when they had no financial incentive to do so. In comparison, just 59% of employees completed the program tasks when they received a $100 incentive. When researchers doubled the incentive to $200, the share of employees who completed the tasks increased by just four percentage points to 63%.


    Damon Jones, an associate professor at the University of Chicago's Harris School of Public Policy and one of the study's authors, said the "results are significantly different" from other studies conducted on wellness programs.

    David Molitor, one of the study's researchers from the University of Illinois at Urbana-Champaign, said the researchers "don't have a particular stance on whether these programs work or don't work," adding that they are "open-minded regarding the possibility for effects to emerge in the long run when they don't in the short run." However, Molitor said, "Broad-stroke wellness programs may not be effective at targeting certain groups of employees who may need it the most" (Greenfield, Bloomberg, 1/26; Goldberg, WBUR, 1/26).

    Next: How to grow direct-to-employer partnerships

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