Employers Plan to Expand Wellness Programs Despite Unpopularity

According to a new study, employees don't like wellness programs very much, and employers don't think they're very effective at mitigating healthcare costs or improving employee performance. Yet nearly half of the 561 companies that responded to the PricewaterhouseCoopers survey said they plan to expand their wellness programs over the next two years. What's up with that?

After years of asking employees to pick up more of the tab for their health insurance, many employers believe they're reaching the limit on how much they can shift costs, says Michael Thompson, a principal in the firm's New York health and welfare practice. But costs continue to rise. Premiums rose 6.1 percent in 2007, less than the double-digit growth earlier in the decade but still far outstripping the 3.7 percent increase in worker earnings, according to the Kaiser Family Foundation. Something's got to give, and employers hope healthier employees will cost them less. "There's a strong belief that we need to get at the underlying issues and decrease the demand for healthcare, and a major way to do that is to change lifestyle," says Thompson.

In theory, wellness programs that help people quit smoking, lose weight, manage their chronic medical conditions, and the like should help accomplish this goal. Sixty-nine percent of companies surveyed said they offered some sort of program. But for wellness programs to work, getting and staying healthy has to be part of the culture of the company, says Thompson. In other words, it's not enough that a company offer a discounted Weight Watchers program; it needs to make sure there are healthy choices in the snack machines, too. Many companies these days are asking employees to take a health risk questionnaire that identifies potential health problems. But too often there's no subsequent follow-up to address the issues revealed on the form. No wonder people aren't seeing results, either in employee health or healthcare costs.

Employees, who may not be thrilled about their employer playing Big Brother with their health, can take some coaxing to get on board. Less than 30 percent of eligible employees participated in wellness programs overall, according to the survey. But participation improved substantially when employers offered financial incentives—like reduced healthcare premiums, discounts on weight management or smoking cessation programs, or cold, hard cash. For example, without any incentive, 1 in 5 employees filled out a health-risk questionnaire, the study found. When an incentive was offered, the proportion jumped to 48 percent.

Although most employers still try to entice employees with proverbial carrots, a small but growing number are beginning to use sticks to get employees to participate in wellness programs, a trend I examined last fall. Some companies are charging employees more if they smoke or don't meet weight, blood pressure, or cholesterol targets, among other things. The jury is still out on what type of incentives works best.

What would motivate you to participate in a wellness program?