Are workplace wellness programs worth it?

New research suggests that workplace wellness programs may not be such a great idea. 

Understanding the effectiveness of workplace wellness programs is becoming increasingly important for businesses.

One recent study focused on a wellness program at the University of Illinois in which almost 5,000 employees volunteered to participate. 

In their final report, the authors noted that "sustained growth in medical spending has prompted policymakers, insurers, and employers to search for ways to reduce medical spending. 

"One widely touted solution is to increase the use of 'wellness programs', interventions designed to encourage preventive care and discourage unhealthy behaviours such as inactivity or smoking," they said. 

In the United States, workplace wellness programs cover over 50 million workers and are intended to reduce medical spending, increase productivity, and improve wellbeing. 

However, this new study finds that there is actually limited evidence to support these claims. 

"We designed and implemented a comprehensive workplace wellness program for a large employer with over 12,000 employees, and randomly assigned program eligibility and financial incentives at the individual level," the authors said. 

Over 56 per cent of eligible (treatment group) employees participated in the program. The researchers found strong patterns of selection: during the year prior to the intervention, program participants had lower medical expenditures and healthier behaviours than non-participants. 

However, they did not find significant causal effects of treatment on total medical expenditures, health behaviours, employee productivity, or self-reported health status in the first year. 

"Our 95 per cent confidence intervals rule out 83 per cent of previous estimates on medical spending and absenteeism. Our selection results suggest these programs may act as a screening mechanism: even in the absence of any direct savings, differential recruitment or retention of lower-cost participants could result in net savings for employers."

One area that was particularly disappointing was the level of attendance of wellness activities. For example, the study sent email invitations for the Fall 2016 wellness activities on 27 September to participants who had successfully completed an online health assessment. 

Participants were able to sign up for activities immediately, but no activities began before 10 October. Signups were done via the iThrive website. The following table shows the range of activities offered, how many people registered and how many actually completed the activity.

What does this all mean?

The study presents a first set of findings from the Illinois Workplace Wellness Study. The authors found a large but diminishing effect of incentives on wellness participation.

"At large incentive levels, further increases have little effect on participation and thus primarily just increase compensation for inframarginal participants.

"We also find that employees who chose to participate in our wellness program were less likely to be in the bottom quartile of the income distribution, and already had lower medical spending and healthier behaviours than non-participants prior to our intervention," they said. 

"These selection results have two implications. First, they suggest that workplace wellness programs shift costs onto low-income employees with high healthcare spending and poor health habits. 

"Second, the large magnitude of our spending estimate suggests the primary value of wellness programs to firms may be their potential to attract and retain workers with low healthcare costs."

The authors concluded that, all else equal, reducing the share of non-participating employees by just 4.5 percentage points would lower total medical spending in its setting by an amount sufficient to pay for its entire wellness program. 

James Mitchell is a Sydney-based journalist and the editor of Wellness Daily.