Tuesday, September 17, 2013

Wellness, again

Austin Frakt and Aaron Carrol had a nice column in Bloomberg on Wellness programs and the PSU program in particular. They point out that, 

Whether wellness programs work as intended or not, let’s recognize what they also do: They increase the cost of coverage for some employees. That saves employers money but by shifting costs to workers. Those who bear the brunt of this increase are the less healthy employees, who also tend to be those of lower socioeconomic status. 
Now let’s consider what wellness programs might do: reduce health-care spending and improve health. In general, the evidence is weak that they will. Why? Conceptually, factors within workers’ control make only a small contribution to rising health-care costs, so there’s only so much such a program can do, even if it works perfectly. Empirically, the track record of wellness programs’ efficacy is mixed at best.
They do not point to the irony of our self-financing system directly. But they note the fact that the research shows that they are ineffective. And they answer the question of why they are so popular with employers.
More rigorous studies find that wellness programs in general don’t save money. With few exceptions, they often don’t improve health, either. The additional screenings that such programs encourage can lead to overuse of care, pushing spending higher without improving health. 
Given all of this, why are wellness programs so pervasive? Our hypothesis is that it’s a form of supplier-induced demand: The wellness industry is doing a good job of pushing its product. Understanding research is challenging, and it’s relatively easy for a marketing representative to cite glorious-sounding results.
Clearly the suppliers of these programs benefit, as PSU employees could see when we took our biometric testing and saw how many people the wellness program hired. I think that PSU is just counting on a lot of dropped spousal coverage. As they conclude, 

Penn State’s plan would hardly be the first time Americans bought something that may not work as well as advertised. Companies should reconsider the reasons that they are so eager to have them and whether they’re really worth the investment.

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