Employee Benefit Views

Guest blogger: Wellness programs cannot affect nearly 80% of health spending

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Posted December 11, 2012 by By Linda K. Riddell at 04:50PM. Comments (2)

 

For all of the hype about employee wellness, it’s difficult to pinpoint exactly how much prevention and management programs can really save. Still, many people would be surprised by findings from a recent Health Affairs study http://content.healthaffairs.org/content/31/11/2474.abstract that concludes the 10 modifiable health risks (listed below) only connect to about 20% of health care spending.  The 10 costly sins are: 
• Obesity / overweight 
• Smoking/ tobacco use 
• High blood pressure 
• High blood cholesterol 
• High blood glucose
• Depression 
• Physical inactivity 
• Stress 
• Poor eating habits 
• Alcohol use 
The study included more than 92,000 employees at seven companies over a three-year span.  It tracked employees’ answers to a health risk assessment http://ebn.benefitnews.com/news/biometric-data-is-more-useful-than-information-from-a-health-risk-assessmen-2728547-1.html and their medical claims.  
People with a high risk of depression were the most likely to have significantly higher medical costs — up to 48% higher than an average employee without depression. Blood glucose and blood pressure came in second place: both boosted medical costs by almost 32%. Obesity — popularly cited as public enemy number one — raised an employee’s costs by around 27%.  
There are at least two ways to respond to this study: One is to celebrate that wellness programs can have an impact on one-fifth of health spending. The other is to bemoan that wellness cannot affect nearly 80% of health spending.  
For the glass-half-full perspective, benefit managers at least can roughly calculate how much money their wellness programs are attempting to influence and data analysis could guide efforts to the most common problems that employees have.  
Still, a realistic benefits manager should acknowledge that the most successful wellness program may only have a limited impact. For example, a weight-loss program might help program participants reduce their medical costs by 10%. This means that their medical costs would still be 14% higher than an average non-obese employee (90% of 127% of average is 114% of average).  Meanwhile, the non-participants are still racking up expenses and since medical costs go up every year, this year’s 127% of average is higher than last year’s.  All of which is to say that the successful weight-loss program will not make even a small dent in the overall costs.  
There are many worthwhile reasons to pursue a wellness strategy: to attract employees, to promote health and to offer a competitive benefit. However, it’s good to be realistic about how much money wellness can save, because it’s not as much as many would like to think.  
Guest blogger Linda K. Riddell is a principal at Health Economy, LLC. She can be contacted at LRiddell@HealthEconomy.net.

For all of the hype about employee wellness, it’s difficult to pinpoint exactly how much prevention and management programs can really save. Still, many people would be surprised by findings from a recent Health Affairs study that concludes the 10 modifiable health risks (listed below) only connect to about 20% of health care spending.  The 10 costly sins are: 

• Obesity / overweight 

• Smoking/ tobacco use 

• High blood pressure 

• High blood cholesterol 

• High blood glucose

• Depression 

• Physical inactivity 

• Stress 

• Poor eating habits 

• Alcohol use 

The study included more than 92,000 employees at seven companies over a three-year span.  It tracked employees’ answers to a health risk assessment and their medical claims.  

People with a high risk of depression were the most likely to have significantly higher medical costs — up to 48% higher than an average employee without depression. Blood glucose and blood pressure came in second place: both boosted medical costs by almost 32%. Obesity — popularly cited as public enemy number one — raised an employee’s costs by around 27%.  

There are at least two ways to respond to this study: One is to celebrate that wellness programs can have an impact on one-fifth of health spending. The other is to bemoan that wellness cannot affect nearly 80% of health spending.  

2 Comments

Posted by: Heath S | December 14, 2012 11:53 AM

I agree with Peter. Would hate for takeaway message to be that employers should focus on other opportunities. Also feel the study (which I do need to read in more detail) sells wellness efforts short in terms of what they can do to impact employees with chronic conditions (much of what people with heart failure, diabetes, etc. need is specifically related to healthier lifestyles) as well as the impact on employee productivity which is harder to measure but extremely high impact. In the end, our country needs to install a wellness culture, and employers play a crucial leadership role in that. My belief is that there is a mountain of value (financial and otherwise) if/when you are able to effectively implement wellness at a worksite.

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Posted by: Peter A | December 13, 2012 11:16 AM

I appreciate the moral of the story here (make sure you are clear about the value of your wellness program), but the apparent intention of the article based on the title and tone (to challenge and diminish the value of wellness programs) is unfortunate.1. ANY savings in health costs that isn't negatively offset by program expenses is financially beneficial. (Obviously.)2. Crawl-walk-run. Start with low hanging fruit (the 10 costly sins that can be easily measured & executed with clear results) then move in on the harder stuff. At least you'll have made some progress by creating participant awareness and developing a culture of wellness.3. Continuous improvement/stretch goals: Fine - your program had "minimal" positive results the first year? How can you do better next year? And the year after?I think we need to be careful about confusing the infancy of the wellness industry with "hype". Any industry/idea that has just begun will take time to stratify. That doesn't mean it's not worth doing or socializing.-- Peter, WellDirections, Director of Client Programs and Channel Development

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