Why the overall growth of wellness programs? If the Rand 2013 is correct, it is not because they actually save employer healthcare costs. The follow-up report (“Rand
2014”)62found that participation in lifestyle management programs was not associated with significant changes in overall cost or utilization of healthcare services63 Rand 2014 also found “no evidence of cost saving among participants of either the smoking cessation or pre-disease management programs.”64 Other studies, while acknowledging many difficulties in creating valid statistically significant results65 also have reached a similar conclusion that there are marginal cost savings, if any, from workplace wellness programs.66 So, why are wellness programs increasingly popular with employers -- so popular and believed to be so efficacious for so many goals, including improving employee health, cutting employer healthcare costs,
reducing absenteeism, reducing workers’ compensation claims, and increasing worker productivity?
http://www.gpo.gov/fdsys/pkg/FR-2013-05-03/pdf/2013-10463.pdf and final rules on Minimum Essential Coverage and Other Rules Regarding the Shared Responsibility Payment for Individuals, 79 Fed. Reg. 70464 (November 26, 2014) available at http://www.gpo.gov/fdsys/pkg/FR-2014-11-26/pdf/2014-27998.pdf.
62
Soeren Mattke, Kandice Kapinos, et al., Workplace Wellness Programs: Services Offered, Participation and Incentives (2014) available at http://www.dol.gov/ebsa/pdf/WellnessStudyFinal.pdf
63
Rand 2014, p. xiv.
64
Rand 2014, p. xv.
65
Studies suffer from a multitude of problems: self-selection of participants in the programs; creating a participant bias; too few participants or too short a time period to be a statistically reliable conclusion, or the unreliability of tying to apply the results obtained by one employer to another.
66
See Framingham Heart Study, http://www.framinghamheartstudy.org/risk/gencardio_bmi.xis (references multiple studies and articles); Gautam Gowrisan Karan, Karen Norburg, Steven Kymes, Michael E. Chernew, et al.,
“A Hospital System’s Wellness Program Linked to Health Plan Enrollment Cut Hospitalization Costs But Not Overall Costs”, Health Affairs, Vol. 32, No. 3, 2013, pp. 477-485; Paul Fronstin, Christopher Roebuck, Financial Incentives, Workplace Wellness Program Participation, and Utilization of Health Care Services and Spending, Employee Benefit Research Institute, Issue Brief No. 417, August 2015 (limited to one year analysis).
The studies versus the belief begs the question, is there something that the studies are missing or are they inherently faulty because they work in the aggregate rather than with the individual company results on different factors. If most employers with wellness programs encompassing more than just a newsletter for healthier eating believe they are getting a net positive result, are the researchers missing something? Or, are the employers just engaged in wishful thinking? One possibility is that the studies do not discuss worker presenteeism,
workers’ compensation premiums, or even absenteeism, but the impact of these workplace costs is not necessarily related to the ongoing cost of employer-provided health care coverage. Employers and employees may debate the causes of America’s healthcare issues and increasing costs, but they most certainly include increasing stress (often related to work, income inequality, and, ironically, lack of access to adequate and affordable health care). The prudence or success of existing wellness programs notwithstanding, the seemingly inconsistent conclusions could also be the result of three factors: (1) low participation rates averaging only 40% unless there is significant economic incentive offered; (2) only 3% of the wellness programs are reported to be comprehensive in their offerings, i.e., health screening, lifestyle management, and disease management; and (3) insufficient time horizons to determine real effectiveness, as
comprehensive wellness programs are still not sufficiently widespread with comparable designs, making it extremely difficult to obtain a sufficient sample size for a study of
effectiveness. Thus, it is possible that self-selection for participation, narrow programs, and low overall participation are responsible for the Rand 2014 conclusions. Higher participation rates in comprehensive, employer-sponsored workplace wellness programs could theoretically lead to lowered costs overall or merely to a cost shifting to less healthy workers and workers with
disabilities, diminished access to quality care for the neediest (who cannot afford it), and even to disability or genetic based discrimination.
The reported statistics indicate that fewer than half (46%) of employees undergo a clinical screening and/or complete an HRA to identify possible lifestyle or disease management issues. And, of those with an identified issue, such as smoking, fewer than 20% chose to
participate in a program to address the issue.67 Still, a solid majority of employers believe their wellness programs are generating a positive Return on Investment (“ROI”). But, while firmly held, is it really just a belief rather than a fact, as only 2% of the employers with wellness
programs report doing a formal assessment of the effects of their program?68 So net-net, what do the studies tend to tell an interested party trying to make a choice about whether to expend the money and time in developing a wellness program, and what type of program, including, what types of incentives, will likely give a good ROI?
Rand 2013 predicts there is likely to be a cost savings over a five-year period of wellness program usage in decreased health care costs and decreasing health care use, but it also
concludes those savings are not statistically significant. At the same time, if Rand 2013 is right, then getting all worker smokers to stop smoking, could alone achieve large cost savings. This is because tobacco is reported to kill approximately 1,200 Americans each day69, is a leading generator of numerous healthcare issues, and may be unique in its preventability. If Rand 2013 is right that other studies demonstrate program participants showed improvement in physical activity, higher fruit and vegetable consumption, lower fat intake, and reduction in body weight, cholesterol levels, and blood pressure, then arguably 100% participation should be every
67
See Appendix 4, Rand 2013, p. xvii, Figure 5.3.
68
Rand 2013.
69
Making Our Next Generation Tobacco Free, U. S. Dept. of Health and Human Services, http://www.surgeongeneral.gov/videos/2012/03/nextgeneration.html
program’s goal. But, even then, different plans will be appropriate for different employers, because everyone agrees that one size does not fit all.
But again, if Rand 2013 is right, as seen in the table at Appendix 4, less than 14% of the employee population involved in wellness programs is initiating the desirable activities to address identified health issues. The question then becomes whether and at what cost does the employer consider including in its wellness program either disease prevention or disease management activities, or both, and whether and at what level to provide incentives or requirements to participate.
As of 2013, intervention programs were in approximately 77% of the workplace wellness programs.70 At the same time, the studies referred to above suggest statistically insignificant cost benefits in direct healthcare cost savings from engaging in these activities. Indeed, some studies’ conclusions would suggest that due to greater amounts of healthcare service usage for addressing identifiable risks and greater medical prescription usage, that there is at least during the initial period of a program an increase in the average healthcare costs.
70
But, other studies and many employers have concluded that keeping someone from developing a disease, or a worsening chronic condition, such as diabetes 2, or from high blood pressure to a stroke or depression, to extensive absenteeism and hospitalization, is worth the effort. 71 Researchers in 2010 from Harvard University and Harvard Medical School, after
reviewing literature on programs from every industry, concluded that large employers, those with over 1,000 employees, achieved substantial ROI from wellness programs with decreased medical costs of $3.27 for every dollar spent, and that absenteeism costs decreased by $2.73 for every dollar spent.72
71
Harvard Study 2010 in Health Affairs Journal. Baicker, et al., Workplace Wellness Programs Can Generate Savings, (published online January 14, 2010; 10.1377/hlthaff.2009.0626) Health Affairs, 29, no.2 (2010):304-311, available at http://content.healthaffairs.org/content/29/2/304.full.pdf+html
72
3 Policies and Practices, § 201.21, Thomson Reuters 2015, original article by Tiffani L. McDonough, Esq., Obermayer, Rebmann, Maxwell & Hippel, LLP, in the GC Mid-Atlantic Column of The Legal Intelligencer, on August 29, 2012.
So, who is right? And, how to know? Rand 2014 concluded that even telephonic wellness program healthcare coaches have not improved outcomes.73
However, the contrary conclusion was reached by Johnson & Johnson in a study of its long- running wellness program. In its third party administered study, Johnson & Johnson was found to achieve an ROI in the range of $1.88-3.92 saved for every dollar spent.74 Again, this suggests that when the wellness program is comprehensive, has been in place for a long time (more than five years), and has high participation rates, successful outcomes are achievable. In other words, telling employees about possible medical issues that could seriously negatively impact their lives and providing opportunities and the assistance to avoid or reduce those negative outcomes will
73
Rand 2014, p. xvii.
74
Rachel M. Henke, Ron Z. Goetzel, Janice McHugh, and Fin Isaac, “Recent Experience in Health Promotions at Johnson & Johnson: Lower Health Spending, Strong Return on Investment”.
change behaviour, which will affect the outcomes. And, as many who have been in the
workplace wellness effort for a long time will say, the biggest goal is “not to get worse,” i.e., to keep the employee’s current medical status from deteriorating. That is because getting worse usually means greater healthcare costs and absenteeism, decreased productivity, and more workplace injuries.
So, whether the direct healthcare cost savings are statistically insignificant or not, taking steps to help a workforce at least maintain whatever is its current health status seems logical and consistent with all the studies. But, that decision has its own issues, such as how to obtain participation, particularly a high level of participation, in prevention activities, and whether to make obtaining an incentive contingent on outcome versus only participation in a program or activity. The decision also leads to additional legal issues, including whether a “voluntary” program is in fact voluntary, whether it meets multiple requirements of the ACA and its regulations, Americans with Disabilities Act and existing regulations, the existing regulations under GINA, HIPAA, and the soon to be in place new regulations of the EEOC for the ADA.
Moreover, disability and employee advocates have cautioned that forcing or coercing workers into disclosing personal health information can lead to privacy violations and even discrimination, particularly in programs that are shoddily designed or administered. Employees who fear misuse or abuse of this information have cause for concern, and fears of differential treatment or ostracization can be well-founded. There are also concerns about the affordability of health care coverage if premium contributions, deductibles or cost-sharing percentages and co-payments are increased as permitted under existing regulations.