Wednesday, March 13, 2013

Fwd: qotd: Don't look for workplace wellness programs to produce significant cost savings

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-------- Original Message --------
Subject: qotd: Don't look for workplace wellness programs to produce
significant cost savings
Date: Wed, 13 Mar 2013 12:58:00 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

Health Affairs
March 2013
A Hospital System's Wellness Program Linked To Health Plan Enrollment
Cut Hospitalizations But Not Overall Costs
By Gautam Gowrisankaran, Karen Norberg, Steven Kymes, Michael E.
Chernew, Dustin Stwalley, Leah Kemper and William Peck

This study examined the effectiveness of a program put in place by BJC
HealthCare, a hospital system based in St. Louis, Missouri, that tied
employees' eligibility to participate in the system's most generous
health plan with participation in a wellness program. We found
reductions in inpatient costs but similar increases in non-inpatient
costs. Therefore, we conclude that although the program did cut some
hospitalizations, it did not save money for the employer in the short
term. This finding underscores that wellness program incentives under
the Affordable Care Act are unlikely to greatly reduce health care
spending over the short run.


Health Affairs
March 2013
Wellness Incentives In The Workplace: Cost Savings Through Cost Shifting
To Unhealthy Workers
By Jill R. Horwitz, Brenna D. Kelly and John E. DiNardo

The Affordable Care Act encourages workplace wellness programs, chiefly
by promoting programs that reward employees for changing health-related
behavior or improving measurable health outcomes. Although there may be
other valid reasons, beyond lowering costs, to institute workplace
wellness programs, we found little evidence that such programs can
easily save costs through health improvement without being
discriminatory. Our evidence suggests that savings to employers may come
from cost shifting, with the most vulnerable employees — those from
lower socioeconomic strata with the most health risks — probably bearing
greater costs that in effect subsidize their healthier colleagues.

Despite the proliferation of wellness programs, drawing reliable
conclusions about their financial returns on investment is difficult.
Safeway credits its program with holding per capita health care costs
flat from 2005 to 2009. However, employers' reports are largely
anecdotal. Some of them may attribute savings to wellness programs that
could have resulted from unrelated causes, such as concurrent benefit
restructuring or selection via restrictions on participation in the
programs to certain job categories. A review of employer wellness
studies concludes that they commonly suffer from insufficient controls,
selection, and inadequate data.

Comment: Workplace wellness programs were included in the Affordable
Care Act partly as a means of promoting better health, but also as a
means of reducing future health care spending though prevention of
disease. The problem is that there is little empirical evidence that
there is a potential for large cost savings from these programs. The two
articles cited tend to confirm that wellness programs should not be
relied upon to control future spending.

In no way does this mean that workplace wellness programs should be
abandoned. Promoting health is a beneficial endeavor and should be
encouraged. Rather, there are two other take-home lessons from these

If financial incentives are included in wellness programs, they should
be very carefully designed. The article by Jill Horwitz and her
colleagues shows that savings to employers may result in the shifting of
costs to employees who are more vulnerable due to their lower
socioeconomic status which is associated with greater health risks.
Using wellness funds for the already healthy while penalizing the more
vulnerable is not wise policy.

The other lesson is that we should not pretend that wellness programs,
along with the other tweaks in the Affordable Care Act, are going to
bring us enough cost savings such that we can abandon efforts to enact
the fundamental reforms that we need to ensure that absolutely everyone
receives essential health care services under a program that we can afford.

Enacting a single payer national health program - an improved Medicare
for all - is perhaps the most important step that we can take to promote
wellness for all of us. Of course, there are many other public health
measures that we should support, including addressing our serious
socioeconomic inequities and injustices. But enacting single payer would
be a great first step.

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