Wellness Programs Can Cut Costs, but Only for Certain Workers

Workplace wellness programs can lower health care costs for those with chronic diseases, but some components of the programs may not reduce health costs or lead to lower net savings, according to a RAND Corporation study. The results are published in the January edition of the Journal Health Affairs.The study looks at PepsiCo’s Healthy Living wellness program over seven years. The program includes health risk assessments, on-site wellness events, lifestyle management, disease management, complex care management, and a nurse advice phone line.

Efforts to help employees manage chronic illnesses saved $3.78 in health care costs for every $1 invested. However, people who participated in the lifestyle management program reported a small reduction in absenteeism, but there was no significant effect on health care costs.

In contrast, the disease management program reduced costs among participants by $136 per member per month, or $1,632 annually. There was a 29% drop in hospital admissions. RAND researchers say that with any prevention effort, it is often easier to achieve cost savings in people with higher baseline spending, as found among those in the disease management program. Interestingly, disease management participants who also joined the lifestyle management program experienced much higher savings at $160 per month with a 66% drop in hospital admissions. This suggests that proper targeting can improve the financial performance of lifestyle management programs. For more information, visithttp://www.rand.org/newsletters.html

Last Updated 11/18/2020

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