Not being a health economist I had not thought much about wellness programs until Penn State instituted one. I thought only our program was ill-conceived. But it turns out that there has been research on wellness programs, and the main conclusion is that they do not save money. This is discussed at the blog Incidental Economist, which is a great health economics blog.
The main point is that the only way these programs can save money is through cost shifting. But the obese and tobacco users do not expend enough on health care to make the savings significant. Especially with laws that bar health-based discrimination at the workplace.
This recent study by Horwitz, Kelly and DiNardo in Health Affairs is indicative. The bottom line:
We reviewed results of randomized controlled trials and identified challenges for workplace wellness programs to function as the act intends. For example, research results raise doubts that employees with health risk factors, such as obesity and tobacco use, spend more on medical care than others. Such groups may not be especially promising targets for financial incentives meant to save costs through health improvement. Although there may be other valid reasons, beyond lowering costs, to institute workplace wellness programs, we found little evidence that such programs can easily save costs through health improvement without being discriminatory. Our evidence suggests that savings to employers may come from cost shifting, with the most vulnerable employees—those from lower socioeconomic strata with the most health risks—probably bearing greater costs that in effect subsidize their healthier colleagues.I wonder why nobody involved with designing our program bothered to speak with a health economist?