The Problem With Employee Wellness Programs

U.S. employers are embracing wellness programs, betting that if they can get workers to lose weight, stop smoking, or adopt other healthy behaviors that will reduce healthcare costs and boost productivity.

The problem is, as these programs grow in popularity—workplace wellness is a $50 billion-a-year industry already—research finds?little evidence ?that they actually improve workers’ health.

That companies are paying closer attention to employee health isn’t surprising. It cost them about?$16,000 per employee ?on average to provide health insurance family coverage in 2021, according to a survey from the nonprofit Kaiser Family Foundation. That doesn’t include the $6,000 on average that employees pay or any job-performance costs associated with workers who are unhealthy.

Because insurance premiums and healthcare costs are driven overwhelmingly by?chronic illnesses ?rooted in behavior, many organizations have moved from simply offering advice on how to be healthy to more aggressive programs designed to change behaviors.

Among large employers that provide health benefits,?more than 80% ?have some type of wellness program to help workers identify and ward off health problems.?Previous surveys ?from Kaiser Family Foundation found that about half of large companies that provide health benefits offer biometric screening—typically body-mass index, blood pressure, cholesterol levels and so forth—to measure a person’s risk factors for chronic disease, while 30% collect data on employees (are you getting exercise?) through mobile apps or wearable devices such as Fitbits. More than half of these programs offer financial incentives to participants, and 18% tie the incentives to achieving specific biometric targets, such as “lose this much weight.” Incentives may be in the form of reduced health-insurance premiums, which can equally be seen as penalties for those who don’t participate in the programs or can’t hit the targets.

Self-selection

Wellness managers often defend their programs by saying that workers who participate in them are healthier and more productive. However,?research shows ?that people who select into wellness programs tend to be healthier and more capable in the first place. In fact, a number of carefully designed field experiments aimed at examining the effects of wellness programs found they don’t improve health outcomes at all. For example,?a study ?of 26,000 employees across 201 worksites, showed that wellness programs had no significant effect on any measures of modifiable health outcomes, healthcare spending or work outcomes.

One reason the addition of incentives doesn’t make wellness programs work is because the incentives to choose healthy behaviors are already huge—being sick for extensive periods is awful and living longer is something most people want. If that isn’t enough to change behavior, it is unlikely that modest financial incentives will help. Indeed, clinical trials that tested the effect of small financial incentives on routine tasks such as taking one’s medicine found?no health benefits . The behavioral-economics notion that we can curb shortsightedness (skipping the gym for the immediate pleasure of a doughnut stop, for example) with incentives hasn’t panned out in these programs.

If that is the case, why do wellness programs continue to spread and grow? One reason is that it seems like they?should?work, which is another way of saying that the business world has too much faith in what small incentives can do. An additional explanation is that the employees who participate in these programs like them and advocate for their employers to keep them. After all, who wouldn’t want a discount on a gym membership they were already planning to get?

A more general question is whether employers should even be measuring the body fat and eating decisions of their employees. The employment relationship isn’t like the confidential relationship between doctors and patients where improving the patient’s well-being is the goal. Wellness programs break through the traditional privacy boundary between work and private lives in a major way.

What has an impact

Is there something more effective that organizations should be doing instead? In the wellness context,?new research ?finds that the most significant barriers to changing lifestyles are related to living situations and income levels. Things such as not having an established primary-care physician, the ability to get to a gym or knowing how to prepare healthy meals are the kinds of things that lead to?persistent differences ?in health outcomes.

Therefore, helping employees get?access to a primary-care doctor? might be one of the most important things employers could do to improve employee health outcomes. A quarter of adults and 35% of younger adults don’t have access to a primary-care doctor, and that percentage has been growing. Finding a reputable doctor who takes a person’s insurance and is accepting new patients can be difficult even for people with resources. Employers and their insurance providers have the scale to match employees to the right doctor. And if workers have a primary-care doctor, employers can skip collecting the biometric data: Doctors collect that anyway and are in a much better position to do something with it. Health-insurance plans also should support preventive care, such as screenings for health risks and follow-up visits for chronic health problems like hypertension, by among other things not making doctor visits for such care prohibitively expensive.

Employers also might want to gather information from employees via surveys and interviews about what stands in the way of their improving their health. It could be that some employees don’t exercise because they can’t afford a gym membership, but it also could be they don’t have time to even go for a walk at lunch. Having a convenient pharmacy can help ensure people take their medication as prescribed. A poor diet may be the result of people not knowing how to cook healthier meals.

Survey results might suggest, for example, that an employer would be better off subsidizing gym memberships near employees’ homes rather than turning office space into a gym. Or employers might mandate a serious lunchtime break from meetings and work so that employees can get some exercise.

Most employees already want to lead healthier lives. Trying to create additional motivation with incentives that disproportionately favor those who are already healthy is essentially diverting resources away from those who need them—the unhealthy—to those who don’t. It is time for a different approach.

Peter Cappelli , the George W. Taylor Professor of Management at the Wharton School at the University of Pennsylvania and director of Wharton’s Center for Human Resources, is the author of “The Future of the Office: Work from Home, Remote Work, and the Hard Choices We All Face .”

This article was co-written with Dr. Iwan Barankay, behavioral economist and associate professor of management at the Wharton School, for The Wall Street Journal.