Back Button
Menu Button

Wellness Programs – New Study Confirms Cautioned Approach

During the past seven years, I have written a fair number of posts regarding wellness programs offered by employers. The core message of all blogs suggests that employers must have realistic expectations about what wellness initiatives will or will not do within the workplace.

A recent randomized clinical study published in JAMA is yet another reminder for employers to have tepid expectations when trying to keep their employees happy, healthy and less likely to incur more health costs. The study found that workplace wellness programs do not cut healthcare costs for employers, reduce absenteeism or improve the health of employees.

From the University of Chicago and Harvard, researchers used a large-scale approach that was peer-reviewed and included a more sophisticated design when analyzing BJ’s Wholesale Clubs. BJ’s has about 33,000 employees across 160 clubs. This analysis compared 20 randomly-assigned clubs that offered wellness programs with 140 BJ’s clubs that did not.

After 18 months of timeline analysis, this study revealed that wellness programs did not result in health measure differences, such as: improved blood sugar or glucose levels, reduced healthcare costs or absenteeism, or impacted job performance in a positive manner. In other words, employees with a wellness program did not experience reduced healthcare costs and other desired affects. I suppose one could argue that a year and one half was not enough comparison time to develop these conclusions.

One of the authors of this study, Katherine Baicker, dean of the Harris School of Public Policy at the University of Chicago, put it quite succinctly in a Kaiser Health News article: “[But] if employers are offering these programs in hopes that health spending and absenteeism will go down, this study should give them pause.”

What are your expectations about workplace wellness? Do you believe such programs, when appropriately and thoughtfully implemented, will greatly mitigate your healthcare costs, improve workforce productivity and reduce absenteeism? Maybe you feel these programs are a waste. From our 2012 Iowa Employer Benefits Study, employers shared their perceived ‘return on investment’ on the programs they currently had in place.

According to a 2013 “Workplace Wellness Programs Study” by researchers at the RAND Corporation, these programs only have a modest effect. This runs contrary to claims made by wellness firms that sell workplace wellness programs to employers. The report found that people who participate in wellness initiatives lose an average of only one pound a year for three years. Another finding is that employee participation in such plans “was not associated with significant reductions in total cholesterol level.” Smoking-cessation programs show some potential, but only “in the short term.”

Most likely, both skeptics and supporters of wellness initiatives will find ammunition to support their cause. Workplace wellness programs have grown to an $8 billion industry in the U.S., primarily as a direct result of rising employer health insurance costs.

This latest report may help stabilize any pre-conceived lofty expectations each of us may have about the benefits of workplace wellness programs. However, it must be noted that some employers have found value in these programs.

To stay abreast of employee benefits and healthcare issues, we invite you to subscribe to our blog.

Voices on Hospitals: Transparency in Medical Outcomes

Time To ImproveIn my mind, the Holy Grail of healthcare is having information on each provider’s medical outcomes – in other words, having transparent outcomes.

How many of us desire to use a doctor or hospital who demonstrates marginal or poor outcomes? No one, I’m quite sure. Yet we have little, if any, verified qualitative information that consistently benchmarks one provider with another provider for the same medical procedure within any geographical area. This is actually a great gig for those medical providers who underperform the services they are handsomely paid to deliver to patients.

Needless to say, this MUST change — and it cannot happen soon enough.

In healthcare, we know that recommended care is delivered about 55 percent of the time, yet our costs continue to rise despite the poor outcomes delivered. Why does this happen? Because the medical ‘establishment’ is much louder (and active) in Washington D.C. than the majority of us who innocently assume that others have our best interest in mind.

Since a majority of healthcare providers fail to track outcomes or cost by medical condition, it’s imperative that a systematic measurement process is established to improve healthcare outcomes. During those times when measurement does occur, they’re typically easier process measurements that determine levels of compliance with practice guidelines. Unfortunately, these measurements may not adequately address the quality metrics needed to advance “value” in healthcare. Performing these measurements serve nothing more than a mirage of what we REALLY desire to have – improved medical outcomes.

Indicator #10: Transparency in Medical Outcomes

The jig is up. Iowa employers have sounded off about how they view hospitals regarding transparency in medical outcomes. Statewide, Iowa hospitals received an anemic score of 6.1, or a grade of ‘C-minus’ for their efforts on being transparent with their outcomes. When segmented into five regions using size-weighted scores, four regions ‘fail’ while only the northwest region received a ‘high-D’ grade.

Polk County hospitals, graded by 144 employers, received a score of 4.3 (failing), while Johnson County (home of Iowa City) received a 5.8 score, or ‘high-D’ grade. A few other notable counties with large populations include Linn County (5.6) and Dubuque County (4.8), grades of ‘D’ and ‘F’ respectively.

Regional - Transparency in Medical Outcomes Map-Master

According to Michael E. Porter and Thomas H. Lee, M.D. of Harvard, “The only true measures of quality are the outcomes that matter to patients. And when those outcomes are collected and reported publicly, providers face tremendous pressure – and strong incentives – to improve and to adopt best practices, with resulting improvements in outcomes.”

Iowa employers have found their voice, now it is time to raise it to unprecedented decibels.

In next week’s blog, we’ll review how Iowa employers graded hospitals on our final two performance indicators: ‘Cost Transparency’ and ‘Keeping Cost Reasonable.’

To learn more, we invite you to subscribe to our blog.

Employer Mandate Delay – The Impact?

Employer Mandate DelaySo what is the big deal with delaying the Affordable Care Act’s employer mandate for one year? How many people will not have access to employer-based coverage as a result? How many businesses would be paying a penalty for not offering affordable coverage to their workforce?

All good questions — and one new study attempts to provide a few responses.

According to the RAND Corporation, a nonprofit research organization, implications from delaying the employer mandate may be as follows:

  • About 1,000 fewer organizations will offer health coverage in 2014 (about 0.02% of all organizations within the U.S.)
  • 300,000 fewer people will have access to affordable insurance in 2014
  • Only about 0.4% of organizations who employ approximately 1.6% of the workforce will pay a penalty for not offering health insurance at all
  • An estimated 1.1% of organizations will pay some penalty for offering unaffordable health coverage (based on current employer contribution rates). This will affect less than 1% of the workforce
  • Due to the one-year delay, the federal government will receive $11 billion less in revenue

RAND also estimated that repealing the employer mandate entirely would result in federal revenue being reduced by about $149 billion over the next 10 years.

Giving employers one more year to digest the employer mandate is considered by many employers to be a welcome relief. However, this delay does prolong the uncertainty in which employers must operate while confronting the Affordable Care Act.

Here in Iowa, over 95 percent of employers who have at least 50 employees already offer health coverage so the impact of this delay affects a small number of the employer population.

Percentage of Employers Offering Health Coverage in Iowa

Additional data reflecting the current Iowa marketplace will be released soon in our 2013 Iowa Employer Benefits Study©, so stay tuned!

To learn more, we invite you to subscribe to our blog.