Those Medical “Wellness Programs” Don’t Save Money

If I had all the time in the world, I’d read the following three, new papers in Health Affairs. But, the abstracts say enough to get the gist. In general, wellness programs have not been shown to be money savers. That alone isn’t a reason not to implement them, provided they at least do other things with net positive value.

If you read the papers (or something else) and want to argue the point, the comments, as usual, are open. All emphasis below is mine.

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. Recognizing the risk that unhealthy employees might be punished rather than helped by such programs, the act also forbids health-based discrimination. We reviewed results of randomized controlled trials and identified challenges for workplace wellness programs to function as the act intends. For example, research results raise doubts that employees with health risk factors, such as obesity and tobacco use, spend more on medical care than others. Such groups may not be especially promising targets for financial incentives meant to save costs through health improvement. 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.

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

Many policy makers believe that health status would be improved and health care spending reduced if people managed their health better. 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. The intervention, which began in 2005, was associated with a 41 percent decrease, relative to a comparison group, in hospitalizations for conditions targeted by the wellness program but with no significant decrease in other hospitalizations. 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.

Medicaid Incentive Programs To Encourage Healthy Behavior Show Mixed Results To Date And Should Be Studied And Improved, by Karen J. Blumenthal, Kathryn A. Saulsgiver, Laurie Norton, Andrea B. Troxel, Joseph P. Anarella, Foster C. Gesten, Michael E. Chernew, and Kevin G. Volpp

In September 2011 the Centers for Medicare and Medicaid Services awarded $85 million in grants to ten states to test financial incentive programs to encourage healthy behavior among Medicaid enrollees with chronic diseases. There is little published evidence about the effectiveness of such incentives within the Medicaid program. We evaluated the available research from three earlier Medicaid incentive programs and found mixed results. On the one hand, in Florida only about half of the $41.3 million in available credits was “claimed” by enrollees between 2006 and 2011. On the other, Idaho’s incentive program was credited with improving the proportion of children who were up-to-date on well-child visits. Our findings suggest that Medicaid incentive programs should be designed so that enrollees can understand them and so that the incentives are attractive enough to motivate participation. Medicaid incentive programs also should be subject to rigorous evaluation to more clearly establish their effectiveness.

[Originally posted at The Incidental Economist]

Austin Frakt

Austin Frakt is a health economist and an assistant professor at Boston University's School of Medicine and School of Public Health. He blogs at The Incidental Economist.