A Different Goal for Employers to Offer Wellness Programs

While wellness programs may benefit employees in poor health the most, a research study found it is those in the middle of the health care spending range that are most likely to participate in wellness programs, but this still could save employers money.


According to a report of the research results, published by the National Bureau of Economic Research, the Illinois Workplace Wellness Study conducted at the University of Illinois at Urbana-Champaign used a comprehensive workplace wellness program that included an on-site biometric health screening, an online health risk assessment, and a wide variety of wellness activities (e.g., smoking cessation, stress management, and recreational classes). Those who successfully completed the entire program earned rewards ranging from $50 to $350, with the amounts randomly assigned and communicated at the start of the program. A control group was not permitted to participate. The analysis combines individual-level data from online surveys, university employment records, health insurance claims, campus gym visit records, and administrative records from a community running event.


The researchers found that 56% of employees in the treatment group completed the initial major component of the study, which included an on-campus health screening. Completion depended on the size of the monetary incentive assigned to an employee: increasing the screening completion reward from $0 to $100 boosted the completion rate by 12 percentage points, from 47% to 59%, but further increasing the reward to $200 only increased completion by 4 percentage points, to 63%.


The researchers conclude that the rapidly diminishing effect of wellness incentives implies that increasing a large financial incentive to even greater levels will transfer large sums of money to workplace wellness program participants, but will have little effect on their composition. They also found that incentives tied to completing downstream wellness activities are more cost-effective than up-front incentives tied to completing the initial health screening.


On the positive side, the research found annual medical spending among wellness program participants was $1,574 less than among non-participants, on average. But, a more detailed investigation revealed that this is concentrated in the middle of the spending distribution: employees in the upper and lower tails of the medical spending distribution were least likely to participate in the program.


The researchers found that wellness program participants were more likely to have visited campus recreational facilities prior to the study, and were more likely to have participated in prior community running events. They conclude that a primary benefit of wellness programs to employers may be their potential to attract and retain healthy workers with low medical spending, which could lower health benefit costs for employers.


Considering only health care costs, the researchers conclude that reducing the share of non-participating (high-medical-spending) employees by just 4.5 percentage points would suffice to cover the costs of the wellness program intervention. The patterns of participation researchers found are consistent with the concern that the benefits of workplace wellness programs are less likely to accrue to those with poor health or relatively low incomes, the paper says.


However, the researchers note that they only examined outcomes in the first year following the start of the study, and it is possible that meaningful effects may emerge in later years.