Study finds some workplace wellness programs yield big savings

Published on Mon, 04/21/2014 - 18:12

In the ongoing battle against rising healthcare and insurance costs, corporate wellness programs continue to be embraced by business owners as a way to curb some of these costs. According to the American Institute for Preventative Medicine, 91 percent of organizations have some type of health promotion program in place.

These businesses all want the same thing – healthy employees, reduced absenteeism, lower healthcare costs, and a dependable workforce. And statistics over the years have routinely shown that wellness programs can make a difference.

But do these programs really deliver the goods?

A 2012 study by the RAND Corporation and PepsiCo, sponsored by the U.S. Department of Labor and the U.S. Department of Health and Human Services, set out to answer that question. The study looked at more than 67,000 people eligible for PepsiCo’s “Healthy Living” wellness program, which includes both disease management and lifestyle components for employees and their families.

Programs aimed at helping people with chronic illnesses, such as diabetes or heart disease, resulted in significant cost savings – an average savings of $3.78 for every dollar spent. But lifestyle management programs focusing on weight loss, smoking cessation, or stress management resulted in no net savings – at least in the short term. Naturally, every company is different, and the study pointed out that there is no one-size-fits-all approach that works for every company.

The $64,000 question: What motivates?

According to the RAND study, the biggest unknown question facing employers is what type of motivation works best for employees. Cash or non-cash incentives? Rewards or penalties? How substantial should the rewards or penalties be? Right now, there’s just not enough research to say definitively how each of these variables relates to employee engagement and outcomes.

Other conclusions:

Regardless of documented savings, some employers in the RAND study reported a drop in absenteeism with lifestyle programs, and many employers feel their wellness programs have a positive, intangible impact on their employees and their business. And while the study showed that lifestyle management programs didn’t provide significant short-term savings, some programs like smoking cessation or weight loss may save money over a longer period of time.

The key to workplace wellness success is to design a program that is tailored for the needs of your business.

Every successful workplace wellness program:

  • Engages leadership at all levels
  • Aligns with the company’s identity and aspirations
  • Is broad in scope and high in relevance and quality
  • Is broadly accessible
  • Relies on effective communication

Let the experts at Heffernan Insurance Benefit Advisory Services help you choose a wellness program that’s right for the health of your business. We’ve helped countless clients with group benefit plans and wellness programs that drive positive change in the workplace. And now, with the Affordable Care new wellness incentives, there’s never been a better time!