Wellness Initiatives Are Going Down the Drain

Chelsea Rice, June 3, 2013

In the news this week: Workplace wellness initiatives aren't paying off, Sebelius finds her zen, and hospital staff still aren't washing their hands.

Wellness programs have long been eyed with skepticism.

Now, just in time for the final rule on wellness incentives from the Department of Health and Human Services, we have some data. Employers who offer such programs will be displeased to learn that subsidizing weight loss programs and gym memberships has been found not to be cost-effective.

RAND Corp. researchers released a federally funded report on workplace wellness programs last week with discouraging data: The numbers just don't add up for wellness initiatives.

The RAND report, now available despite its fumbled release (it was apparently released prematurely and temporarily yanked from the Internet), is raising red flags for employers.

According to the HHS final rule [PDF], starting in 2014 employers may reward employees for participating in wellness programs at 30% of the cost of their average insurance premiums, or almost $1,620 annually. But RAND researchers were unable to prove statistically significant cost savings for these programs.

RAND says participation in wellness programs for more than five years is "associated" with lower health care costs and utilization, but with an average annual savings of $157, (that's $3.46 per month, per employee in the fifth year of a wellness program) the change was not statistically significant, so it couldn't be isolated to be a result from the wellness program itself.

So who's the real "the biggest loser" here? In the workplace, employees seem to be winning the benefits game, but without significant changes to their health and wellness. Meantime employers are patting themselves on the back for their largesse.

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