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Wellness Investments Rise but Results Remain in Question

More employers are deploying wellness programs but implementation and effectiveness remain elusive.

June 25, 2014
Related Topics: Health Care Costs, Benefit Design and Communication, Health and Wellness, Health Care Benefits, The Latest
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A large and growing number of organizations are offering wellness resources and programs to employees in the hope that they will lower the cost of health care. But the way they implement programs is holding back results.

According to the Society for Human Resource Management 2014 Employee Benefits research report released at SHRM’s annual conference in Orlando, 79 percent of organizations provide wellness resources and information to employees and 63 percent offer wellness programs. Add in those who plan to offer benefits in the next 12 months and the figures go up to 83 percent and 68 percent respectively.

Research has shown a five-year growth in investment in services such as health and lifestyle coaching and weight loss programs, said Evren Esen, SHRM director of survey programs. Part of the attraction is wellness programs’ perceived ability to drive down the cost of overall health care by preventing costly health problems before they arise.

“[Wellness benefits] affect a large swath of employees and are also seen as important to get ROI,” Esen said.

That growth in wellness investment is even more significant given that overall spending on benefits has yet to recover to pre-Great Recession levels. “[Employers are] still being cautious because they’re not sure where the economy is going,” Esen said.

The limited amount of money companies have to spend on employee benefits also means that the growth of wellness comes at the expense of other offerings. SHRM research showed that education assistance and housing and relocation programs have seen sustained declines.

The upward trend in wellness is also being accelerated by the implementation of the Affordable Care Act which requires employers to add preventive care measures to their insurance offerings. That adds additional cost to employer plans, said David Lindgren of Flexible Benefit Service Corporation during a SHRM breakout session titled “Exchanging” Your Employee Benefits Program.

Lindgren pointed to a 2013 survey conducted by the Healthcare Trends Institute that showed, among other strategies, that 22 percent of employers are enhancing wellness programs in order to comply with ACA.

Be Positive to Drive Wellness Implementation

Wellness benefits may be on the rise but employers are implementing them in a way that dilutes the potential effectiveness of the programs.

Saying “sitting is the new smoking,” consultant Brad Cooper, CEO of U.S. Corporate Wellness Co., pointed to workers’ sedentary habits as one of the greatest risks to employee health and a primary driver of increased employer health care cost. Traditional approaches to wellness won’t turn the tide.

Employers need to move beyond a “check the box” mentality that encourages a single program that applies to everyone to one that takes a flexible “one size fits one” approach, Cooper said. That means offering a variety of services that meet workers’ differing needs and that go beyond the traditional screening methods such as Body Mass Index to assessments of exercise habits, nutrition, sleep patterns, temperament and stress levels and history.

The goal should be to “have an approach that adjusts and works for everybody” that includes traditional tools such as web portals and contests but also includes more individualized approaches such as personalized coaching and nutrition counseling.

Employers should also emphasize the positive rather than negative. Expert athletes tend to respond well to negative feedback that tells them what they are doing wrong, Cooper said. But novices, as many employees are when it comes to wellness, overwhelmingly respond better to positive feedback and will fail to learn from and make behavioral changes based on bad news.

Effectiveness Measures Elusive

While 71 percent of SHRM survey respondents said they thought their wellness initaitives were very or somewhat effective in reducing health care costs, actual bottom line benefits remain elusive.

In another workshop, Don Powell, CEO of the American Institute for Preventive Medicine, cited a RAND study of wellness programs that showed a savings of only $157 per employee over a three year period. Powell said wellness programs aren’t a money loser but nor are they a huge savings opportunity, a distinction that is beside the point.

“So what? We don’t need to look at everything from an ROI perspective,” he said, suggesting that employers look at the effect of their employee wellness programs from a “return on employee” perspective that examines “the good that comes from wellness for employees versus just the expense."

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