But there was a solution, creative entrepreneurs asserted. As those diseases were partly caused by unhealthy lifestyles, wellness programs that offered weight management, smoking cessation, and fitness programs would reduce health risks, make employees healthier and control cost.
Clever marketing and countless success stories drove the development of a $4 billion industry that is supported by about half of all U.S. employers. Even the normally skeptical academic world joined the bandwagon: A 2009 review by Harvard economist Katherine Baicker stated that wellness programs returned $3 in healthcare savings and $3 in reduced absenteeism cost for every dollar invested.
Our research tells a different story. We recently completed the largest assessment of workplace wellness programs to date and found that wellness programs do in fact reduce health risks, like smoking and obesity.
But resulting cost savings could not be detected, especially when compared to the costs of the programs. The study, which included almost 600,000 employees and dependents at seven employers, found that programs are not likely having immediate effects on the amount employers spend on healthcare coverage for their employees, and it may take a number of years to detect any effect on costs.
Our results suggest that program participation led a quarter of the smokers to kick the habit. Programs also increased numbers of normal weight persons by 50%. However, the average annual savings over five years amounted to $157 per employee, while typical program costs are around $150 per employee each year.