Do workplace wellness programs reduce medical costs? Evidence from a Fortune 500 company.

The recent passage of the Affordable Care Act has heightened the importance of workplace wellness programs. This paper used administrative data from 2002 to 2007 for PepsiCo's self-insured plan members to evaluate the effect of its wellness program on medical costs and utilization. We used propensity score matching to identify a comparison group who were eligible for the program but did not participate. No significant changes were observed in inpatient admissions, emergency room visits, or per-member per-month (PMPM) costs. The discrepancy between our findings and those of prior studies may be due to the difference in intervention intensity or program implementation.

Managing manifest diseases, but not health risks, saved PepsiCo money over seven years.

Workplace wellness programs are increasingly popular. Employers expect them to improve employee health and well-being, lower medical costs, increase productivity, and reduce absenteeism. To test whether such expectations are warranted, we evaluated the cost impact of the lifestyle and disease management components of PepsiCo's wellness program, Healthy Living. We found that seven years of continuous participation in one or both components was associated with an average reduction of $30 in health care cost per member per month. When we looked at each component individually, we found that the disease management component was associated with lower costs and that the lifestyle management component was not. We estimate disease management to reduce health care costs by $136 per member per month, driven by a 29 percent reduction in hospital admissions. Workplace wellness programs may reduce health risks, delay or avoid the onset of chronic diseases, and lower health care costs for employees with manifest chronic disease. But employers and policy makers should not take for granted that the lifestyle management component of such programs can reduce health care costs or even lead to net savings.

Do workplace health promotion (wellness) programs work?

OBJECTIVE: To respond to the question, "Do workplace health promotion programs work?" METHODS: A compilation of the evidence on workplace programs' effectiveness coupled with recommendations for critical review of outcome studies. Also, reviewed are recent studies questioning the value of workplace programs. RESULTS: Evidence accumulated over the past three decades shows that well-designed and well-executed programs that are founded on evidence-based principles can achieve positive health and financial outcomes. CONCLUSIONS: Employers seeking a program that "works" are urged to consider their goals and whether they have an organizational culture that can facilitate success. Employers who choose to adopt a health promotion program should use best and promising practices to maximize the likelihood of achieving positive results.

Effect of an employer-sponsored health and wellness program on medical cost and utilization.

The objective of this study was to examine the impact of PepsiCo's health and wellness program on medical cost and utilization. The authors analyzed health plan and program data of employees and dependents 19-64 years of age, who had 2 years of baseline data (2002 and 2003) and at least 1 year of data from the intervention period (2004 to 2007), resulting in a sample of 55,030 members. Program effects were measured using a difference-in-difference approach based on a multivariate regression model with an individual-level random effect. In its first year, the program was associated with a relative increase in per member per month (PMPM) cost ($66, P<0.01); a relative reduction in PMPM costs of $76 (P<0.01) and $61 (P<0.01) was seen in the second and third year, respectively. Over all 3 years, the program was associated with reduced PMPM costs of $38 (P<0.01), a decrease of 50 emergency room visits per 1000 member years (P<0.01), and a decrease of 16 hospital admissions per 1000 member years (P<0.01). The disease management component reduced PMPM costs by $154 (P<0.01), case management increased PMPM costs by $2795 (P<0.01), but no significant effects were observed for lifestyle management over the 3 intervention years. The implementation of a comprehensive health and wellness program was associated with a cost increase in the first year, followed by a decrease in the following years. These results highlight the importance of taking a long-term perspective when implementing such programs and evaluating their effectiveness.