Human Capital & Careers

Obamacare’s Worst Idea: Support for Wellness Programs

Steer clear if you're looking for an ROI, says Al Lewis, president of the Disease Management Purchasing Consortium.
Al LewisJune 3, 2015

No Affordable Care Act (ACA) provision enjoys more bipartisan support than the one that encourages employers to pay or fine employees based on their health and health behaviors. And both the House and the Senate are likely to pass the recently introduced “Preserve Employee Wellness Act” — and the president is likely to sign it.

Yet for all the corporate popularity of such wellness programs — many large companies now require employees to participate or else forfeit hundreds of dollars — support for them is the worst idea in the ACA. They damage employee morale, and even where employees don’t pay for noncompliance, the costs of wellness programs outweigh their savings.

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That’s not only according to their opponents, but also some of their promoters — the Health Enhancement Research Organization and the Population Health Alliance. These two leading wellness advocacy groups convened a joint committee of 39 “subject matter experts” from 27 wellness vendors and health plans, which produced a free, downloadable, 88-page report ostensibly to justify wellness.

But upon a close reading of the report, the only area it suggests in which wellness programs clearly offer savings is “potentially preventable hospitalizations.” And it put the average gross annual savings at only about $12 per employee (see page 21 of the report). In other words, major corporations are subjecting millions of employees to demeaning weigh-ins and uncomfortable (and often inaccurate or misinterpreted) blood draws, all to save the price of lunch. And that’s before counting program fees, which the report pegs at $18 per employee (page 23 of the report), on top of many other costs (page 10).

Of course, the negative ROI could be justified if wellness programs led to employee health benefits. That brings to mind a program I offered when I was the CEO of a Nasdaq-listed company. Not only did it produce zero cost savings, but the incentives to make healthy food choices and participate in fitness programs were appreciated only by the (easily predicted) subset of employees who already valued their health. The others were not persuaded.

Al Lewis

Al Lewis

That’s an important point. While most wellness studies and vendors find that participants outperform nonparticipants in annual per-worker claims costs, that is caused not by the program itself but by separating the population into motivated and non-motivated people.

Most studies and vendors also focus on high-risk people and then “demonstrate” that risks declined. That’s like taking 10 coins that are lying heads-up, flipping them, and taking credit for the ensuing 50% reduction in heads-up coins. University of Michigan professor Dee Edington, a leading authority on health-risk factors, has demonstrated a “natural flow of risk” in which a high-risk group’s risk factors tend to decline on their own over time, and vice versa. Yet most vendors count only the former when making claims of savings.

Also, consider the following:

  • Wellness vendors market many health screens that the United States Preventive Services Task Force (USPSTF) recommends avoiding. In fact, much of the health advice they offer — including eating less cholesterol and more whole grains, buckling seat belts without a mention of texting while driving, and getting prostate and thyroid tests — is either irrelevant, outdated, wrong, or at least controversial.
  • One leading insurer, Aetna, encourages employers to advise obese employees to take drugs that the Journal of the American Medical Association has published editorials against due to their hazards.
  • Offering monetary incentives for losing weight incentivizes binging before the first weigh-in and crash-dieting before the last one, neither of which is healthy.

While it’s unfortunate that the single ACA provision garnering bipartisan consensus is badly misguided, the fact that neither party has staked its reputation on the success of wellness would make it easy to back off. A simple regulation that “wellness must do no harm” (as measured by the USPSTF) should encourage employers to replace wellness done to employees (via medicalizing the workplace) with wellness done for employees (via subsidized gym memberships, health education, and healthy cafeteria offerings).

Now there’s an idea that deserves bipartisan consensus.

Al Lewis is president of the Disease Management Purchasing Consortium.