When news broke in late May that the government's own study on employer-sponsored wellness programs showed little progress, the benefits community assembled into their corners - those for wellness programs and those against them.

The study, conducted by RAND Corp. on behalf of the U.S. Department of Health and Human Services, found that despite significant prevalence of wellness programs in the workplace (approximately half of all U.S. employers, with larger employers being more likely to offer one than smaller ones), "our findings suggest that uptake of worksite wellness programs remains limited."

Some of the more detailed findings include: weight-loss components of employer-sponsored wellness plans average around a one-pound decrease per year for three years; participation "was not associated with significant reductions in total cholesterol level; "statistically insignificant cost savings of $2.38/mo (year 1) and $3.46 (year 5);" and while some improvement was shown in smoking cessation campaigns, the report deems the results "short term."

 

How it happened

Adding to the scrutiny around the findings, RAND Corp. posted the final study on their website and then quickly removed it, stating, "This document was posted in error and has been withdrawn pending completion of contractual obligations to the project sponsor."

Reuters was the only media outlet to obtain a copy before it was taken offline for a few more days. The media wire was the first voice to dissect the findings, writing that the report "delivers a blow to the increasingly popular efforts ... casting doubt on a pillar of the Affordable Care Act and a favorite of the business community."

When the report was officially released to the media, including EBA, the general media's take was much broader. Bloomberg's story on the study said, "The report by the RAND Corp. found small yet promising changes in worker behavior and costs from programs at 600 businesses."

But with the facts on the table, it didn't change the polarity between industry insiders about the effectiveness of wellness programs in improving Americans' health and driving down health care costs.

 

 

'A feel-good thing'

Employee benefits sales coach and EBA columnist Mel Schlesinger has a strong reaction to the RAND report. For one thing, he says the weight loss statistic of one pound per year is not significant weight loss and does not look favorable for wellness programs. "All you have to do is talk to any owner of any gym," Schlesinger says. It's about more than just a pound here and a pound there.

"There's no incentive strong enough to make somebody take charge of their health," he adds. "The idea that wellness programs can make changes; it's sort of a feel-good thing employers like to talk about. While it does have a benefit from an employee perspective - people feel like they're getting something and it does impact morale - is it really going to lower health care costs? I highly doubt it."

On a personal note, Schlesinger does believe that people who choose to lead unhealthy lifestyles, say smokers, do deserve to pay the cost for that lifestyle. "Smoking is a lifestyle choice," he says.

But all the effort put into the opposite? While he doesn't agree with it, it is the norm. "I can't believe they're actually publishing this study because it goes against what the rest of the world wants to believe," he says. "At the end of the day people who want to believe that wellness is the answer are going to ignore this."

Steve Ritchie owns Steve Ritchie & Associates, Inc. in the Chicago area and couldn't agree more. "Wellness mandates are not the panacea [to health care costs]. You can throw wellness mandates in the black hole," he says. "You're getting on a horse on the wrong end and you're trying to manage it with mandates that aren't even applicable."

Ritchie has created a financial tool, not for HR managers but for those in finance departments at employers, that off-loads the risk for a company and sets a person or couple up in an individual plan, picking up claims of risk when Medicare doesn't. He says his tool works great for people 65 and older who are still on company plans. "Wellness, there's a problem with risk assessment," he says, and he thinks he's going to help solve some of the cost problem in a different way, for employers at least.

 

More than numbers

Chris Boyce, CEO of wellness provider Virgin HealthMiles, has a different view entirely. Take the weight loss findings from the RAND study. "The trend overall is for people to gain weight, so if it's holding flat, that's probably a good thing in this environment," he says about the RAND findings. "A lot of our clients see that as success. More often than not our clients say they see changes in behavior, biometrics, body fat and sometimes weight too." He adds that, almost more importantly than weight loss, his clients say employees are more engaged at work, which results in increased productivity for the employer.

Virgin HealthMiles recently conducted a survey finding that when choosing an employer, about 87% of prospective employees favor a company that has a wellness program in place. The poll of almost 10,000 people shows that regardless of effectiveness, most employees say that wellness programs are an overall positive influence on the office culture (70%) and that participating in the programs has helped their relationships both inside and outside of the workplace (57.5%).

"Employers are looking and see there's a social and implied agreement with employees. Our clients see more happy and engaged long-term employees ... with 83% saying that we are changing lives," Boyce explains.

Boyce says his company's wellness programs are different than what he calls the "old" programs that perhaps the RAND study looked at. "I would agree that those [programs] haven't traditionally done much," he says. "But where we see big programs and big changes is where there are fun and games and incentives, where those changes that you're looking for are engaging." He adds Virgin has seen a sustained behavior change across a five-year period as a result of their newer programs with "events and challenges."

The Virgin study also polled about 1,300 employers, 80% of which offered wellness programs, and of those that did, only 31% say they are satisfied with their wellness metrics.

 

 

The bottom line

Perhaps the most prominent part of the RAND report is its evaluation of how wellness impacts health care costs: "Our statistical analyses suggest that participation in a wellness program over five years is associated with a trend toward lower health care costs and decreasing health care use. We estimate the average annual difference to be $157, but the change is not statistically significant."

Schlesinger says there really is no good answer to reduce health care costs, but he doesn't think it's wellness. "If you look around the world, any country, whether they're a single-payer system of nationalized health care, they're all struggling with the same thing we're struggling with because people want what they want," he says. "Technology and health care are expensive and it's not a market that lends itself to the normal market solutions."

He says the RAND findings by the government are not likely to have much of an impact and that companies will soldier on to search for effective wellness programs. "I don't think anything will really change because too many people want wellness to be the answer," he says.

Boyce isn't quite one of those people. "This is so much bigger than health care costs," he says. "What we're really trying to get done now is blurring the line between home and work - people have to pay more attention to what they really want out of their lives. Incentives and games and devices and social - we see the data and we're changing behavior."

Adding to Schlesinger's estimation that the RAND report for the government would actually have little impact on their actions, just days after its release HHS, Department of Labor and Department of Treasury released final rulings on wellness programs as stipulated by the ACA.

The rules give employers more freedom to charge higher premiums to employees who don't meet health goals in wellness programs, and incentivize those who do. The rules increase the allowed premium bump for employees not meeting wellness goals from 20% to 30%. "The final rules support workplace health promotion and prevention," the department said, "while ensuring that individuals are protected from unfair underwriting."

This tying of wellness and health care costs, for industry insiders, is nothing new. But Schlesinger says the government has a lot more work ahead based on his view of RAND's findings. "What the whole study says is that all of the incidental things that show savings," he says. "There's really no rigor to this study and they're all over the place."

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