(Illustration by Adam McCauley)
Over the past several decades, the steep climb of health-care costs has motivated employers to find innovative ways to reduce medical spending for their workers. One such strategy, workplace wellness programs, now covers more than 50 million US workers. But participation in wellness activities rarely exceeds 20 percent, and evidence to support claims that such programs cut costs, increase productivity, or improve employee well-being is scant.
In 2016, Damon Jones, an associate professor at the University of Chicago’s Harris School of Public Policy, along with David Molitor and Julian Reif, two professors of finance at the University of Illinois’ Gies College of Business, designed and implemented a two-year workplace wellness program for employees of the University of Illinois at Urbana-Champaign with the aim of discovering the relationships between the investment that employers make and the return, if any, that they and their employees realize.
“Employers can play an important role by providing evidence-based workplace health promotion programs,” says Ron Goetzel, senior scientist and director of the Institute for Health and Productivity Studies at the Johns Hopkins Bloomberg School of Public Health and vice president of IBM Watson Health. “Employers gain the most when their workers (and their families) are healthy. Healthy workers do not require preventable health-care services, are absent less often, have fewer accidents, and generally feel better about their lives because they are not distracted by their own or family’s health problems.”
The University of Illinois study was conducted as a randomized controlled trial from summer 2016 through spring 2018, with outcomes being tracked until at least 2020. Called iThrive, the program included three main components: an annual on-site biometric health screening, an annual online health risk assessment (HRA), and weekly wellness activities. Wellness activities, for which completion of the screening and HRA was required, included chronic disease management, weight management, financial wellness classes, smoking cessation guidance, tai chi, and physical fitness. Of the university’s 12,459 benefits-eligible employees, 4,834 employees agreed to participate in the study.
Roughly two-thirds of the employees recruited were given paid time off to participate, with the remaining third assigned to a control group that was not permitted to take part. Financial rewards were given to those who successfully completed the full two-year program. In addition, participants earned randomized, confidentially communicated cash rewards for completing each step or activity.
The researchers tracked 42 factors, including whether wellness programs appealed to people who were healthy and active to begin with; their effect on employee productivity, individual health habits, and sense of well-being; and the employer’s amount and type of medical spending.
“The list of expected outcomes is lengthy, and they are unlikely to be significantly affected by the wellness program, given its modest budget, limited resources, and short duration,” Goetzel says.
So far, iThrive has shown uneven outcomes. “It’s possible that changes in behavior take longer than two years to translate into changes in health outcomes,” Jones says. “Also, if someone becomes aware of a health issue, health-care spending could actually increase in the short run. However, the results after one year and after two-and-a-half years were mostly consistent with each other, and we did not find dramatic differences in the results after looking at the longer window.”
Self-selection by participants was evident at the start. Participants who completed the iThrive screening and HRA spent, on average, $115 less per month on health care in the year prior to the study than nonparticipants and were often already engaged in fitness activities.
The researchers were concerned that participation in the program over a period of time could change how resources and costs would be distributed among employees. Costs could be shifted onto unhealthy or lower-income employees who are less likely to participate. “This isn’t guaranteed to happen, but it could,” Jones says. “For example, suppose that an employer decides to cover rising health costs by raising health insurance premiums, but also offers an offsetting premium reduction to employees who participate in a wellness program. The rising health costs would be shifted to employees who do not participate in the wellness program.”
The authors suggest that the selection patterns they uncovered may provide, by themselves, a potential motive for firms to offer wellness programs. If wellness programs increase the recruitment or retention of these types of employees, and also boost productivity, then the accompanying reduction in health-care costs will save firms money.
“But with the approximate cost per participant of the iThrive program at $270, the average savings in health-care spending so far has been effectively zero,” Jones says.
Damon Jones, David Molitor, and Julian Reif, “What Do Workplace Wellness Programs Do? Evidence from the Illinois Workplace Wellness Study,” The Quarterly Journal of Economics, vol. 134, no. 4, 2019.
Read more stories by Marilyn Harris.