Wellness Programs' Value Disputed, Defended

updated on May 10, 2019

A study published in the April Journal of the American Medical Association (JAMA) stirred fresh debate over the return on investment (ROI) from workplace wellness programs: It found little evidence of short-term improvements in employees' health at worksites offering these programs.

Wellness program proponents argue that these initiatives have long-term benefits and say wellness can help organizations in ways beyond lowering health care costs.

In the study, Effect of a Workplace Wellness Program on Employee Health and Economic Outcomes, researchers focused on middle- and lower-income employees of BJ's Wholesale Club, a large, national retail warehouse company. They tracked about 4,000 employees at 20 worksites with wellness programs focused on nutrition, physical activity, stress reduction and related topics, and nearly 29,000 employees from 40 other worksites that had no wellness programs.

After 18 months, employees at worksites where wellness programs were offered self-reported higher rates of regular exercise and weight management, but there were no significant differences in other health outcomes, such as clinical measures of cholesterol, blood pressure and body mass index. In addition, no improvements were found in health care spending and use, nor in employment outcomes such as absenteeism, job tenure and performance.

Researchers Zirui Song, M.D., of Harvard Medical School and Massachusetts General Hospital in Boston, and Katherine Baicker, Ph.D., of the University of Chicago Harris School of Public Policy, concluded that while workplace wellness programs are popular, "these findings may temper expectations about the financial return on investment that wellness programs can deliver in the short term."

The results, they noted, are similar to those from a study by the University of Illinois that found a lack of health improvement among wellness program participants after one year.

Song and Baicker acknowledged some potential criticisms of their approach, such as:

• BJ's Wholesale Club's low-wage workers tend to have short job tenure, making it difficult to promote healthier behaviors.
  

• Because the study lasted only 18 months, it's possible improved health or lower health care costs would be found over a longer period of time.

[SHRM members-only toolkit: Designing and Managing Wellness Programs]

Improving Workplace Culture

Considering the amounts employers spend on wellness programs, "it's important that they become more effective," wrote Jeff Levin-Scherz, a senior consultant and co-leader of North American health management practice at Willis Towers Watson.

"While traditional wellness programs don't appear to move the dial, employers have alternative means to improve the health and health behavior of their employees," he noted. "For example, employers can make their workplace as conducive to healthy behaviors as possible (better nutrition, more exercise, clean air, decreased stress)."

Employers can also realize beneficial results for their organizations by integrating programs to address employees' physical, emotional, financial and social well-being.

"Even if these programs do not directly lower medical claims costs, employers will gain a competitive edge by creating healthier and happier employees," Levin-Scherz contended.

'Employers will gain a competitive edge by creating healthier and happier employees.'

Wellness program vendors responded to the study by arguing that the benefits of their offerings are real if not always easy to quantify. Many argued that providing total well-being benefits for employees enhances corporate cultures and makes organizations more appealing to employees and job seekers.

"It has never been about wellness only or quick wins," said Scott Rotermund, co-founder and chief growth officer for Welltok, a provider of well-being program software and resources. Health-promoting initiatives are not meant to be measured in a short time frame of just a year and a half, which was the scope of the JAMA study, he noted. Over time, the programs are more likely to result in healthier behaviors and lead to long-term health improvements and cost savings, "not to mention, it's the right thing to do and your employees expect it," he said.

All wellness offerings are not equally effective, Rotermund added. Those that are personalized to address participants' specific needs—"driving the most valuable actions for each individual employee"—are more likely to yield results, he said.

"Unless we have every detail of all medical expenses, loss-of-productivity costs, increased home or childcare costs, and costs due to permanent lifestyle changes, we can't possibly know exactly how much has been saved," Danna Korn wrote in response to the JAMA study. Korn is the co-founder and CEO of Sonic Boom Wellness, a software company specializing in corporate wellness.

"That said, no wellness program should shirk its duty to demonstrate value," she wrote, Traditional ROI, however, may not capture the real value of employers' wellness investments. While year-over-year risk reduction and improvement is an ideal long-term goal for any wellness program, "the actual value of wellness programs can be determined through a number of other methods," such as surveying employees to measure improved morale, teamwork and camaraderie.

"Even if based on self-reported information, these metrics are good indicators of employee satisfaction and engagement," Korn said. If a wellness program can have a positive effect on employee morale, she added, it will be reflected in better retention, engagement and productivity.

Don't 'Silo' Wellness

"Every few years, we see studies disputing the impact of traditional wellness programs," said Henry Albrecht, CEO of Limeade, an employee engagement platform. Companies with good intentions may be taking the wrong approach, he noted, adding that "health costs are worth tracking, but they are so small compared to the true ROI of lower burnout and turnover, higher engagement and ultimately the sales, customer and financial metrics CFOs report on their earnings calls."

"Wellness in a silo will never live up to its potential," Albrecht believes. "It needs to connect across silos to create a unified employee experience focused on engagement, inclusion, resilience, communication and strategic alignment. No one needs just another program."

He advised that employers "measure an ROI that gets your companies not just on the cover of JAMA for higher employee health and well-being, but also on the cover of Forbes for being a great place to work."

Related SHRM Articles:

Does a New Study Underestimate Wellness Programs?, SHRM Online, February 2018

Metrics Beyond ROI Can Capture Wellness Outcomes, SHRM Online, March 2015