Work Wellness May Reduce Illness Costs, Lifestyle Maintenance Less Effective

A recent study released by the RAND Corporation suggests that while work wellness programs may reduce health care costs for those employees suffering from chronic illnesses, the lifestyle management aspects of the wellness programs do not exhibit a similar return. According to a recent release, the RAND analysis focused on the employee wellness program offered by PepsiCo. With the implementation of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), which promotes the creation of work wellness programs, the release predicts increasing numbers of these programs in the coming years.

PepsiCo Program

The RAND study investigated the experiences of over 67,000 employees of PepsiCo over the course of seven years. The benefits of the PepsiCo program include: health risk assessments; on-site wellness events; lifestyle management; disease management; complex care management; and a nurse advice hotline. The employees tracked by RAND were eligible for the disease management or lifestyle management programs under PepsiCo’s Health Living wellness program.

RAND Results

In regard to the disease management aspect of the PepsiCo program, the RAND report revealed that for every one dollar spent on those efforts, $3.78 was saved. The disease management program was also shown to reduce monthly costs of health care for those suffering from chronic illnesses such as diabetes and heart disease by $136 per member, which amounts to a savings of $1,632 annually. This cost reduction was caused in part by a 29 percent drop in hospital admissions by those employees. In contrast, the RAND study did not find similar results in respect to the lifestyle management program. Although some positive effects of the program were recognized in the study, such as a small drop in absenteeism rates, those results were not higher than the costs imposed to achieve such results.

ACA and Wellness Programs

Another RAND study conducted for the Department of Labor (DOL) found that half of U.S. employers with over 50 employees offered some form of a wellness program, while 90 percent of companies with over 50,000 workers maintained a program. According to a DOL fact sheet, the ACA actively promotes and incentivizes worker wellness programs. Specifically, proposed rules under the ACA would increase permissible rewards for health-contingent wellness programs from 20 to 30 percent and would allow even further increases for programs that promote the reduction of tobacco use.