According to RAND corporation, about 80% of large employers in U.S. offer wellness programs. Despite a significant spend (over $8 billion annually) by employers on these programs for over 20 years, participation by employees as well as the program’s ROI remains poor. We can think of three possible reasons:
- Lack of targeting
- Lack of evidence
- Lack of accountability
Lack of targeting
Wellness programs typically are not geared towards demographics of specific employee population. Plans based on dynamic value-based insurance design (VBID) are targeted for specific populations affected by specific conditions.
For example, free gym-membership is great for employees who are motivated to stay healthy and can take out time to exercise, not so much for someone who is struggling with chronic conditions, commuting for hours to get to work and feels the pressure of higher out of pocket costs. For such individuals, a plan that offers a lower out of pocket costs for certain evidence based services (and medications) goes a long way in reducing barriers to better health.
Lack of evidence
Karen Pollitz at Kaiser summarizes it well – “For a lot of things companies do, it’s all about being evidence-based. But with workplace wellness programs, it’s faith-based: A telling finding from our survey is that most employers who offer wellness programs don’t collect data on whether they work.”
On the other hand, VBID design is based on reducing barriers for high value services offered by providers who follow evidence based guidelines.
Lack of accountability
There are so many factors that go into helping an employee or dependent get “healthier”. Most wellness programs act like silos and provide a very nichy service, which makes it hard to determine if any improvements are a result of a specific program or something else.
VBID plans on the other hand are outcomes based that use clear metrics, incentives and payments design for enhancing access to preventive services as well as improving health outcomes by reducing barriers to effective treatments.
We believe that the impact of workplace wellness programs can be significantly improved if these are incorporated into an overall value-based plan design.