| NEW YORK
NEW YORK Jan 6 A long-running and
well-respected workplace wellness program at PepsiCo
that encourages employees to adopt healthier habits has not
reduced healthcare costs, according to the most comprehensive
evaluation of a such a program ever published.
Released on Monday in the journal Health Affairs and based
on data for thousands of PepsiCo employees over seven years, the
findings "cast doubt on the widely held belief" that workplace
wellness programs save employers significantly more than they
cost, conclude Soeren Mattke of the RAND Corporation and his
co-authors. "Blanket claims of 'wellness saves money' are not
Workplace wellness programs, a $6 billion-a-year industry,
are a favorite of the business community because they promise to
improve productivity, cut absenteeism and reduce medical costs
by averting expensive illnesses. They aim, for instance, to help
employees quit smoking, maintain a healthy weight and have
regular screenings for elevated cholesterol, high blood
pressure, cancer and other conditions, all of which are supposed
to reduce healthcare spending.
Half of U.S. employers with at least 50 workers offered a
wellness program in 2012, as did more than 90 percent of those
with 50,000-plus workers, according to a 2013 RAND report.
PepsiCo's was introduced in 2003.
The programs are also a pillar of the Affordable Care Act
(ACA), President Barack Obama's healthcare reform law. The ACA
allows employers to reward workers who participate in wellness
programs, and penalize those who refuse, with discounts or
increases of as much as 30 percent of their insurance costs.
That can be thousands of dollars per year.
Some workers have objected to the programs because of the
penalties. Others say workplace wellness efforts invade their
privacy and promote poor medicine.
Last year, for instance, faculty members at Pennsylvania
State University rebelled against a workplace wellness program
whose "health risk assessment" asked, among other questions,
whether male employees examined their testicles every month and
whether women employees intended to become pregnant. They also
protested its requirement that even healthy young adults receive
frequent cholesterol and other screenings, which physicians
recommend against, and the steep penalties for opting out:
$1,200 a year.
"You're making employees do something that invades their
privacy and that goes against medical advice, and now we're
seeing (in the PepsiCo study) that it doesn't even save the
employer money," said Al Lewis, founder and president of the
Disease Management Purchasing Consortium International, which
helps self-insured employers and state programs reduce
PepsiCo did not respond to requests for comment on the
study. Megan Broderick, senior manager of the company's health
and wellfare benefits and a co-author of the Health Affairs
paper, said she could not speak to a reporter without
The vendor that sold PepsiCo the program, the SHPS division
of ADP, also declined to comment, citing "client
confidentiality," said ADP spokesman Dick Wolfe.
Maria Ghazal, a vice president of the Business Roundtable,
an association of chief executives of large U.S. corporations,
said its members are "as enthusiastic as they have ever been
about these (workplace wellness) programs," adopting them not
only to control healthcare costs but also to boost employee
morale and improve recruitment.
"Wellness is an area where you can distinguish yourself,"
she said. "Employers feel they help attract and retain" valued
For their study, RAND's Mattke and his colleagues -
including two PepsiCo executives - examined PepsiCo's "Healthy
Living" program, which has two components.
One, called disease management, helps people with any of 10
chronic illnesses, among them asthma, diabetes and hypertension.
They receive regular phone conversations with a nurse about
managing the condition.
Disease management produced healthcare savings of $136 per
member per month, largely because of a 29 percent reduction in
hospital admissions, the researchers found. When hypertension is
well controlled, for instance, people are less likely to land in
the hospital with a stroke. When asthmatics take their
medication, they don't wind up in the ER unable to breathe.
PepsiCo's disease management program "provides a substantial
return for the investment made," Mattke said.
The "lifestyle management component" is what most people
think of as a workplace wellness program. It includes a health
risk assessment in which workers answer questions about such
behavior as eating and exercise habits; smoking cessation
programs; and educational materials and telephone sessions with
a "wellness coach" to help them lose weight, eat healthy, get
fit, manage stress or stop smoking.
PepsiCo employees who participated in these lifestyle
programs reported a small reduction in absenteeism, but there
was no significant effect on healthcare costs. (The study uses
costs as a proxy for health, assuming that if people get sick
they seek care. But it did not explictly assess the programs'
effect on participants' health.)
"Participation in lifestyle management interventions,"
conclude the PepsiCo researchers, "... has no statistically
significant effect on healthcare costs," and employers
considering adopting such a program "should proceed with
The PepsiCo study is not the first to find that workplace
wellness programs fall short of their promise. Last year, Mattke
was the lead author of a RAND report that found that healthcare
costs of workers who participated in such a program averaged
$2.38 less per month than non-participants in the first year of
the program and $3.46 less in the fifth year. Neither difference
was statistically significant.
Researchers who are skeptical of wellness programs' benefits
are concerned that the ACA - "Obamacare" - allows employers to
offer substantial financial rewards and penalties tied to
"The ACA took a bad idea, workplace wellness programs, and
turbocharged it by allowing employers to penalize workers," said
Lewis, co-author of a new e-book titled "Surviving Workplace