A new study by researchers at the University of Chicago and Harvard, recently published in the Journal of the American Medical Association, sheds new light on the impact on increasingly popular workplace wellness programs on employees’ actual health outcomes. The effectiveness of these programs has not been extensively researched, as they are relatively new and rely on an evolving set of strategies and technologies, and studies so far have drawn mixed conclusions. The new research, Kaiser Health News senior correspondent Julie Appleby explains, had a more sophisticated design than many past studies in this area: The researchers randomly chose 20 BJ’s Wholesale Club outlets to offer a wellness program to all their employees, then compared their results with 140 other stores with no program, covering a total study group of almost 33,000 employees.
Unfortunately, the researchers found no significant correlation between the introduction of the wellness program and a strong improvement in employee health:
After 18 months, it turned out that yes, workers participating in the wellness programs self-reported healthier behavior, such as exercising more or managing their weight better than those not enrolled. But the efforts did not result in differences in health measures, such as improved blood sugar or glucose levels; how much employers spent on health care; or how often employees missed work, their job performance or how long they stuck around in their jobs.
The BJ’s wellness program offered small incentives for participation: Employees could receive about $250 in small-dollar gift cards for taking courses on nutrition, exercise, and other wellness topics. Around 35 percent of eligible employees completed at least one course throughout the duration of the study. One wellness program vendor commented to KHN that the limited impact of the program may have come down to the incentives being too small:
Jim Pshock, founder and CEO of Bravo Wellness, said the incentives offered to BJ’s workers might not have been large enough to spur the kinds of big changes needed to affect health outcomes. Amounts of “of less than $400 generally incentivize things people were going to do anyway. It’s simply too small to get them to do things they weren’t already excited about,” he said.
An accompanying editorial in JAMA noted that “traditional, broad-based programs like the one analyzed by Song and Baicker may lack the necessary intensity, duration, and focus on particular employee segments to generate significant effects over a short time horizon.” In other words, don’t give up entirely on wellness efforts, but consider “more targeted approaches” that focus on specific workers with higher risks or on “health behaviors [that] may yield larger health and economic benefits,” the editorial suggested.
The co-authors of the study—Katherine Baicker, dean of the Harris School of Public Policy at the University of Chicago, and Dr. Zirui Song, a professor at Harvard Medical School—also acknowledged that 18 months may not be a long enough period to observe an impact on employee health outcomes or care costs. Accordingly, they plan to publish three-year results once they are finalized. The vendor responsible for BJ’s wellness program told CNBC that these preliminary results were encouraging in what impact they did reveal:
Debra Wein, founder and CEO of Wellness Workdays, the third-party wellness provider for BJ’s, said the fact that there were changes in employee health behavior over 18 months was a positive, especially since the employee base of BJ’s is not a homogenous, high-income, white collar demographic, but a diverse workforce where education, income, access to technology and native languages spoken vary across the population. …
Wein stressed that the conversation about wellness has been shifting away from a focus on return on investment even before these recent studies. “The current conversation around wellness has moved dramatically away from financial return on investment and more towards value on investment measures.” She noted that at BJ’s, even lacking quantitative measures to make the wellness case, dieticians who worked with the employees witnessed “dramatic changes in culture and perspective,” such as healthier food choices in break rooms and more employees drinking water over soft drinks.
Baicker and Song’s work comes just a few months after a working paper was published in January at the National Bureau of Economic Research, which also cast doubt on the impact of these incentive programs. In that study, 3,300 employees of the University of Illinois at Urbana-Champaign were given a year of access to the workplace wellness program iThrive and had their behavior and outcomes compared against a control group of 1,534 who were not. Participants in the program were offered incentives ranging in value from $50 to $350, but higher-value incentives had little impact on participation, according to a summary in the NBER Digest:
Raising incentives, the study found, resulted in sharply diminishing returns. Introducing a $100 reward boosted the completion rate by 12 percentage points, from 47 percent to 59 percent; further increasing the reward to $200 raised participation by only 4 percentage points. … Tying rewards to completing downstream wellness activities was more cost-effective than providing up-front incentives to undergo the initial screening.
Overall, the study found that the wellness program generated no reduction in health expenditures:
In the first year of this randomized study … employees in the wellness program spent on average $566 a month on health expenditures compared to $562 a month in the control group. The study also found evidence of self-selection: Among employees in the treatment group, those who chose to participate in the wellness program had annual medical expenditures that were $1,574 less than those of nonparticipants. Participants were also more likely than the average worker to have exercised at campus recreational facilities and entered community running events.
If incentives aren’t effective at driving participation, what about penalties? Honeywell took a stick-over-carrot approach to its Surgery Decision Support program, in which employees discuss alternatives to surgery with a specialist before undergoing certain elective, non-emergency operations. After the company introduced a $1,000 penalty for workers who declined to participate in the program, engagement leapt from 10 percent to over 90 percent, Honeywell Vice President of Global Benefits Michael Ventrone said at a panel discussion at the National Business Group on Health’s Business Health Agenda 2019 conference. In comments reported by HR Dive, Ventrone added that Honeywell had previously offered participants an incentive worth $500, but this strategy only engaged 25 percent of employees.
As the multi-billion-dollar wellness industry continues to expand, encouraging employee participation is emerging as a key challenge in making a wellbeing program successful. In addition to these questions of effectiveness, employers must also be aware of regulations governing these incentives, particularly whether and how they can encourage employees to share their private health data. The US Equal Employment Opportunity Commission had its rules for wellness incentive programs vacated by a federal court, effective at the start of this year. The EEOC had already been ordered to issue new rules but was not planning to do so until 2021, meaning US employers currently face uncertainty over how these programs may be regulated in the future.
Gartner Total Rewards Leadership Council members can check out our wellbeing content hub for a wide range of research and tools for designing an effective program and measuring its success.
This post is published for informational purposes only and does not constitute legal advice or an opinion on the legal matters discussed within. Employers should consult their general counsel whenever they have questions pertaining to laws, regulations, or potential liabilities.